Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Seeking shelter from the storm

Seeking shelter from the storm

Jones Lang LaSalle has seen a distinct rise in the number of large corporates looking to secure long-term tenancies.

Mark Grant, National Director of Markets for Jones Lang LaSalle says, “We can see the signs of gridlocked office accommodation, particularly in Auckland, with the lack of new and available stock increasing the upward pressure on rental values. The recent work we have undertaken with clients such as BP, Aurecon, SunGard and IBM, who have all had requirements in excess of 2,000sqm, has demonstrated a well-defined trend for office occupiers acting now to secure long-term office space”.

Mark continues, “Commercial tenants are taking out long-leases as a way of protecting themselves from an inevitable increase in rents and effectually, seeking shelter from the storm.”

These companies are looking to insulate their occupancy costs, with minimal variable exposure on their property footprint. This also works well for landlords, with the long-term security of a blue chip tenant in their portfolio.

Low vacancy rates are putting pressure on tenants to kick into gear and start their search now for accommodation solutions. This is especially the case for tenants with large commitments as they need the longest lead times and are the least nimble in their property choices.

With occupier demand increasing, office supply static and vacancy tightening, we are seeing rents beginning to increase especially in the CBD. Jones Lang LaSalle’s forecasts suggest that these conditions likely to trigger an anticipated round of rental increases; which will push into prime stock in the first instance with secondary stock following suit through 2015.

Most recently, BP, who leased space for its new head office in the newly constructed five green-star rated building at 73 Remuera Rd in Newmarket. Matt Lamb, Associate Director of Office Leasing for Jones Lang LaSalle who facilitated this lease says “Requirements for quality, large scale office space are becoming harder to place, with occupiers who are prepared to act fast being best placed to take advantage of what is available and secure their long-term position, and thereby protect themselves from the upward pressure that is coming over the next period of time”.

Jones Lang LaSalle have recently found in excess of 10,000 sqm of space for a number of large corporate occupiers who are acting fast and bunkering down before the changing market conditions.

As economic conditions have stabilised and given impetus to improving confidence this is now resulting in a new round of leasing activity, with tenants looking to secure better quality premises. In addition, offering incentives to sign for a longer lease are now clearly improving the overall lease profile of prime buildings, fundamentally securing the value in the medium to long term.

Matt Lamb continues, “With the footprint of corporate occupiers growing as well as rents on the rise, a number of landlords are taking the reins and securing long leases. This strategy allows them to maximise their tenure until the investment value rises and allows them to secure their business for a period of low vacancy and rental increases.”

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>


Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news