Wellington Figures Q3 2024

Key Points:

• In Q3 2024, gross effective rents in the Prime CBD office submarket increased due to higher outgoings driven by higher property rates and insurance costs. Also, this rise was not fully counterbalanced by the increase in incentives offered in some buildings.
• The Wellington industrial market continued to benefit from increasing face rents during Q3, driven by low vacancies in good-quality assets. In contrast, the retail market witnessed a decline in rents across all submarkets, due to weaker demand and challenging economic conditions.
• The market is expected to become gradually more active after the Reserve Bank of New Zealand shifted from a monetary tightening to a monetary easing policy, reducing the OCR by 75 basis points over the last two Monetary Policy Committee meetings.
• During H1 2024, office vacancy increased from 10.2% to 13.4%, mainly due to vacancies in Secondary buildings. The rise in Grade B and Grade C office vacancy resulted from a combination of tenants downsizing their office space and backfill vacancies.