New Zealand's commercial property market remains subdued, according to the Royal Institute of Chartered Surveyors (RICS) first quarter Commercial Property Monitor.
Demand for space from tenants was weakening for most types of commercial property, with industrial property the only bright spot with positive demand sentiment, the survey found.
The retail property sector has been particularly hard hit, with low levels of demand from tenants.
Comparing that to growing demand for industrial space, suggests a continuing change in shopping habits and an ongoing move to online trading.
Demand for office space was also negative, and the above trends were being reflected in vacancy rates and the incentives landlords were offering tenants to office and retail space.
The report also found that investment enquiries were in negative territory, weighed down by borrowing costs and central bank policy, and this was evident in the level of enquiries from both NZ and overseas investors.
Industry feedback suggested that flexible working arrangements such as more days working from home were still having an impact on the market and would likely continue to affect landlords as leases expired and tenants reviewed their space requirements.
The comment stream on this story is now closed.
- You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.
4 Comments
Hard to see WFH disappearing totally. I read in the FT that downtown San Francisco office rental vacancies are approaching 30%. Mind you, with leasing prices so high (even compared within America) & the inner city streets often a mix of blood, vomit & urine, SF has lost its shine as the city to be in.
Central Awkalnd has similar issues. There are the usual street dwellers and mess, no students though they look the returning, and the rail loop project still causing extended chaos. Traffic is still mad especially with the rail line to the south knocked out, WFH is well engrained, and many tech companies (One, Spark, Vocus etc) have all down sized their building footprint to be far below their staffing levels. You need to book a seat weeks in advance to get one for the day.
WFH isn't going anywhere because it's too good a deal. A huge win for the worker who effectively gets a simultaneous pay rise and cut in hours, a win for the business (and their customers) due to falling rent expenses, and a win to everyone from reduced traffic congestion and emissions.
I generally agree. However it can disrupt team unity, and some people abuse the privilege. You also miss the random but often valuable spontaneous discussions.
I think 2-3 days in the office is important.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.