2 factors affected office vacancy around Auckland in the second half of 2013 – withdrawal of space for conversion to apartments or hotels, and a number of moves around town by tenants shifting between grades or between business areas.
CBRE research director Zoltan Moricz said this week the cbd office vacancy level was still above 10%, but it had slipped below that line outside the cbd.
CBD vacancy climbed above 10% in mid-2009 and peaked at 14% across all grades at the end of 2011. Overall vacancy at the end of 2013 was 10.2% (145,618m²) after a 1.4% (20,862m²) decrease since June.
Mr Moricz said the combined premium & A grade vacancy had been cut from 6% to 4% over the 6 months, though vacancy in the premium segment had risen. The 12,332m² reduction was ascribed to:
- law firm Russell McVeagh quitting 1237m² on level 29 of the Vero Centre
- 391m² on levels 13 & 15 in the PWC Tower being taken up by new tenants
- Almost 40% of the space in 205 Queen St vacated by the ANZ Bank being taken up by a number of tenants, including law firm Brookfields taking 1170m² on levels 8 & 9
- Ricoh leasing the 2100m² former Mainzeal headquarters at 200 Victoria St West
- 2 floors in the HSBC Building at 1 Queen St, 2118m² on levels 6 & 10, being leased
- Kordia taking 1724m² on level 3 of Oracle House at 162 Victoria St West, and another telecommunications tenant taking 1721m² on level 1.
Mr Moricz said vacancy in the secondary grades decreased by an overall 0.9% (8530m²), though Brookfields added to it by moving across the road from its 2544m² on 4 floors of 19 Victoria St West. Other moves included the BNZ vacating 4398m² on lower floors of the former BNZ building, 125 Queen St, expansion by Auckland University into an extra 1990m² of 49-51 Symonds St, 1299m² of former Crystal Harbour restaurant space at 39 Market Place being taken up by Ignite Architects, and the entire 1072m² level 2 of 138 Halsey St being taken up by Sunday Punch.
Overall net absorption in the second half of 2013 was 11,102m², mostly due to 13,177m² of A grade space being taken up.
Withdrawals of office space from the market during the 6 months included 21 Federal St, 90 Symonds St & 60 Cook St for residential & hotel conversions, refurbishment at 85 Fort St and demolition of the building at 109 Fanshawe St to make way for the new Fonterra headquarters.
The non-cbd vacancy rate peaked at 13% (203,584m²) in December 2010, but was down to 9.5% (153,000m²) at the end of 2013.
Attribution: Agency report & interview.