Auckland CBD office rents continue to climb despite supply pressures easing slightly over the past year, Colliers International claims.
Colliers International Auckland CBD Office Market Snapshot report revealed the overall CBD office vacancy rates remains low at 5.9%.
Research and Consulting National Director Alan McMahon says the prime vacancy rate is 4.3% up from 2.8% a year earlier, while the secondary vacancy rate is 7% up from 6.7%.
Colliers’ projections show the prime vacancy rate is expected to drop to a low of 3.1% in June 2019, before peaking in December 2020 at 6%.
McMahon said despite supply pressures easing slightly, there is still a lack of options available for tenants in the market.
“This will accelerate rental growth upwards in the short term. Growth will moderate in 2019-20 when more supply arrives, but will still be positive,” McMahon said.
Net prime CBD office rents are at an average of $471 per square metre, up from $444/sq m a year earlier. Secondary rents are at an average of $264/sq m, up from $253/sq m.
McMahon said Auckland’s strong growth continues to attract investment interest from overseas, with further yield compression expected.
“Prime yields are at 6.5% down from 6.8% a year ago, while secondary yields are at 7.6% down 8.1%,” McMahon added.