Colliers Predicts Lower Vacancies and Higher Rents
Colliers International Research is predicting a 5.4 per cent increases in prime city office rents during the next 12 months with vacancies continuing to drop due to lack of stock and increased demand.
“Forecasts for rent increases not experienced since pre-global financial crisis are likely to change the office sector’s fortunes,” Colliers Research reports. “The PCNZ/IPD index data shows growth in total rent returns has gathered pace over the last 12 months, especially in the capital return component.
“Investors that have the ability to apportion their asset allocation across multiple sectors will be defining their strategy in the next stage of uplift forecast in activity.
“Those already focused on the office sector will become further focused on asset type. While office assets at the top-end will undoubtedly garner more modest value gains, and slight yield firming, investors looking to outperform and achieve a higher rate of return will be pursuing premises with pockets of potential and opportunity to lift income streams.”