Zero vacancy in Auckland’s Wynyard Quarter
Auckland’s Wynyard Quarter, in the lower foreground, is fully occupied. Photo / Supplied
JLL’s Vertical Vacancy Review for the Third Quarter has shown that, for the first time, Auckland’s Wynyard Quarter is fully occupied.
The report — which monitors the vacancy across prime buildings in Auckland, Wellington and Christchurch — took a close look at the Wynyard Quarter, which is home to numerous new buildings, many with large floorplates and an area tipped to be “party central” during 2012 America’s Cup Regatta.
JLL research consultant Chris McCashin points out Wynyard is popular with big corporations such as Datacom and Fonterra, having superb accessibility to bars and restaurants, public transport and the CBD.
“And many of its buildings are high-spec with agile workspace environments,” he adds.
Vacancy in the Wynyard Quarter/Viaduct area in the Second Quarter of this year stood at 3.9 per cent — due to 5000sq m of space remaining in the Spark building and 1700sq m in the new AA Insurance House.
But both of these have been fully leased, closing off the last available prime space in the precinct, says McCashin. Wynyard isn’t the only area where vacancy levels are dropping. Reduced vacancy is also a factor for buildings being monitored right across the Auckland CBD, with the present level at 4.4 per cent, down from 6.2 per cent in Quarter 2.
“Continued tight vacancy will drive Auckland CBD rents up in the short term, however, as new stock comes online in the second half of 2019 this may incentivise provision of more secondary stock.
“Three properties are to be completed in 2019-2020: Commercial Bay, with 37,000sq m; 10 Madden St (Innovation 5B) in the Viaduct Harbour area. with 8180sq m and One55 Fanshawe, with 17,170sq m.”
McCashin adds that unlike Auckland, the Wellington sky-line has experienced a slight rise in vacancy this year, with levels moving from 0.3 per cent in Q2 to 0.8 per cent in Q3.
“Wellington’s prime vacancy is also at very low levels. The reason for this slight increase is due to one-and-a-half floors becoming available in the Aon Centre. Although we expect these will quickly be taken up given pent-up demand. Even with the two new developments at PwC Centre and 20 Customhouse Quay with about 25,000sq m of space entering the market, levels remain extremely low as these two new buildings are fully occupied. Due to the shortage of space we envisage more development to take place.
“Precinct Properties recently announced a further 20,000sq m is to be developed at Bowen Campus to assist with the supply demand imbalance,” says McCashin.
In the South Island, Christchurch vacancy has also decreased from 6.8 per cent to 5.7 per cent. “A new development for Spark, which adjoins Cathedral Square, is being completed. This aside, there are no other major developments forecast in the short term, which could lead to a further reduction in vacancy for the city.”