Competition for prime CBD office space heating up
Competition for prime CBD office space heating up in Christchurch
JLL’s Third Quarter Vertical Vacancy Review indicates clear shift back to the CBD from the suburbs; expected to push rents upwards from 2020.
Christchurch, 31 October 2019 – Vacancy across Christchurch’s ‘A’ Grade CBD office buildings has fallen to 6.3%, according to JLL’s latest Vertical Vacancy Review, as tenants continue to be attracted back to the city centre by quality fit outs and accessible rental rates.
Highlighting the appeal, the Spark Building, which will be the last of the major new supply of CBD office space when it comes to market before the end of the year, is fully pre-leased.
JLL Commercial Property Broker, Colin Barratt, says it’s not just the ‘big players’ who are coming back to the city.
“Absorption continues across the CBD, with smaller occupiers filtering in to help fill pockets of available space. This is shoring up the overall market and putting the brakes on softening rates.”
Barratt expects the current CBD rental rates, which have stabilised to an average of $330 per sqm in 2019, to move upwards in 2020, driven by a lack of new supply, high level of re-commitments, and healthy economic conditions. This in turn will put the squeeze on secondary stock.
“With tenants returning to the CBD, or electing to move up the grade spectrum now that better value deals are available, landlords of inferior quality office space will need to recognise that they will have to meet the market to attract new occupiers,” says Barratt.
JLL’s Third Quarter Vertical Vacancy Review, which covers Auckland, Wellington and Christchurch can be viewed here
JLL (NYSE: JLL) is a leading professional services firm that specialises in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of over 91,000 as of March 31, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.