There is a shortage of prime office space in Wellington's CBD and vacancy rates in secondary quality buildings are falling, according to a report on Wellington's commercial property market by Colliers International.
The report said there was only 6,700 square metres of vacant office space available in prime quality building in the capital's CBD, putting its vacancy rate at 5%.
That meant tenants looking for top quality space had few options and existing tenants in prime quality buildings in the CBD could also be faced with higher rents.
"This has serious consequences for tenants looking for prime space and those about to enter rent review negotiations, as rents will rise," the report said.
Vacancy rates in the secondary quality market, which was much larger, were also starting to fall and were currently around 12-13% range, Colliers said.
However the vacancy rate for C-grade buildings on the CBD fringe were around 15-20% and the market for these properties was still difficult, especially if buildings had seismic strength issues, the report said.
In the Wellington industrial market some good leasing activity and reducing vacancy levels had pushed investor confidence in the sector to new high.
"The demand for good quality stock exceeds supply. For those considering selling it is a very good time to do so," the report said.
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