Watch on our video page here. Watch on YouTube here. Bernard Hickey delivers an Economic Weather Report in association with BNZ on the outlook for rents in CBD offices in Auckland and Wellington. Forecaster Darroch says a combination of extra supply from new buildings at the Viaduct and around Britomart in Auckland along with a softening of demand in the wake of the recession was likely to see vacancy rates rise to 16-18% by March 2012 and rents fall 15-20% over the same period. Darroch Consulting and Research Director Ian Mitchell said increased supply was also likely to hit the Wellington CDB office space market over the next 18 months, including the new BNZ building, a new Customs building and a new IRD building. Along with a softening of demand from belt-tightening government departments, vacancy rates were also expected to rise to 16-18% by March 2012. This would also pressure rents around 15-20% lower over the next two years. These forecasts will help reassure the Reserve Bank that inflation in many parts of the economy remain under control, leaving it room to leave the Official Cash Rate on hold until mid 2010, as suggested late last year.
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