Wellington Figures Q2 2023

Key Points: 

‒In Q1 2023, an increase in outgoings across all sectors had a material dampening impact on net rents.

‒Low levels of transactional activity continue to hamper calls on pricing but CBRE’s assessment of market trends resulted in yield increases of 45-97 basis points since the late 2021 market peak across the various sectors.

‒The market witnessed the removal of several office buildings due to strengthening and refurbishment works. These were partly offset by the completion of new built and refurbished buildings.

‒During H2 2022, CBD office vacancy was largely stable at 7.5%.  Premium grade remained very tight with less than 1,000 sqm vacant, but Grade A vacancy has increased due to relocations into new supply creating backfill as well as some occupiers rationalising their space requirements.

‒Industrial vacancy is 2.4% overall, but with material variation between precincts and grades.   There is no Prime vacancy.  Good rates of gross rental growth continued into Q1, although as for other sectors, increasing Opex has resulted in lower net rents.