JLL releases ‘vertical vacancy review’
The Wynyard Quarter has become a popular office location as well as a dining and entertainment precinct. (Photo/Getty Images)
JLL New Zealand has released a building-by-building, floor-by-floor analysis of office vacancy in the prime buildings in Auckland, Wellington and Christchurch.
“The Vertical Vacancy Review for the fourth quarter of 2016 is JLL’s final piece of research for 2016,” says JLL’s national research manager Tom Barclay.
“It gives a visual representation of what is happening in the prime office market.
“In Auckland, vacancy is tight but there’s capacity coming. In the popular Wynyard Quarter area, things are particularly tight. Both Bayleys House and BDO House have now been fully leased, meaning there is zero space that’s immediately available in the Wynyard area.
“Big name tenants like Kotahi and IBM are moving to the Wynyard/Viaduct part of town. And of course Auckland Transport will be moving into the Vodafone building on Fanshawe St next year,” Barclay says.
“Over the course of 2017 we’ll see several new office developments completed in the Wynyard Quarter. These include the refurbishment of the Mason Brothers building, the new Datacom building in Gaunt St, Innovation 5a and the development by Mansons TCLM at 46 Sale St. Together, these comprise around 36,500sq m of new space.
“The Mason Brothers building at 139 Pakenham St is a character warehouse that has been upgraded and converted to a three-level workplace. It will have retail and a cafe on the ground floor. The first two floors are complete and the first tenants will soon be able to move in.
“The building we refer to as ‘Innovation 5a’ is the new multi-level office building in Wynyard Quarter, being created from the redevelopment of existing properties at 8-14 Madden St,” Barclay says. “Meanwhile in the core CBD, vacancy remains tight, but there is more capacity coming. Much of the reshuffling we’ll see over the next few years will be prompted by Precinct’s Commercial Bay development. The new office tower, due for completion in 2019, has been pre-leased by a number of Precinct’s existing tenants. Some major occupiers are also consolidating, which means we’ll see a healthy amount of backfill space become available in the next few years.”
Meanwhile, vacancy in Wellington is changing by the day, JLL’s Wellington-based research consultant Chris McCashin says.
“The market is shifting and adjusting to post-quake closures. Six of the buildings included in JLL’s Vertical Vacancy Review are closed. Vacant space is in high demand while damaged buildings are out of action.”
In Christchurch, the development of new buildings is in full swing and the vacancy rate remains high, Barclay says. “The PwC Building recently opened with only a small amount of space yet to be leased. The Awly building and the Vodafone building have been delivered since the last edition of the Vertical Vacancy Review was published in the first quarter of 2016.
“In 2017 we will see the final surge of post-quake office developments reach completion in Christchurch. The second stage of the BNZ Centre and Grand Central are near completion and will be open in the first quarter of the new year.
“The King Edward Barracks buildings will be complete in 2017, as will the Justice Precinct and the office component within the main Terrace development. The Westpac building will follow at the southern end of the Terrace,” says Barclay.