There has been a sharp drop in the amount of vacant office space in Wellington as companies relocate out of buildings that were damaged in the November earthquake that was centred near Kaikoura.
A survey of office space in the Capital by Colliers International has found that only 7.8% of office space in Wellington's CBD was vacant last month, down from 10.5% shortly before the earthquake and 11.9% in June last year.
There was 108,300 square metres of vacant office space in Wellington last month, down from 154,536 just before the quake..
Since the quake 97,125 square metres of space had been removed from the market, with seismic damage being the largest factor.
Colliers said it is the first time the vacancy rate had slipped below 10% since December 2010 when it was 9.9%.
"Immediately after the quake a number of large organisations suddenly lost a vast amount of office space," Colliers Wellington office leasing specialist Steve Maitland said.
"BNZ and Statistics NZ alone lost almost 28,000 square metres, enough for more than 2000 staff.
"It was absolute bedlam. In over 20 years in the business I've never experienced a period like that November through to Christmas. The phone never stopped ringing," he said.
Maitland said there was now a second wave of demand after Wellington City Council ordered additional seismic tests on 80 buildings.
"The market has gone into overdrive again, as tenants consider whether to move premises and start weighing up the alternatives.
"There's a real lack of large floors and contiguous spaces," he said.
That meant there was a particularly acute shortage of space for larger organisations with 70 or more employees that required 1000 square metres or more of floor space.
However demand would ease as new buildings became available over the next 12 months, Maitland said.
| Wellington CBD Office Vacancy Survey Results | |||
| Date | Office Stock (m2) |
Vacant Space (m2) |
Vacancy rate |
| Dec-1991 | 1,167,669 | 260,242 | 22.3% |
| Dec-1995 | 1,188,002 | 166,923 | 14.1% |
| Dec-2000 | 1,140,430 | 111,478 | 9.8% |
| Dec-2005 | 1,160,530 | 96,942 | 8.4% |
| Dec-2010 | 1,269,705 | 126,275 | 9.9% |
| Dec-2015 | 1,480,911 | 173,436 | 11.7% |
| Jun-2016 | 1,473,754 | 175,472 | 11.9% |
| Dec-2016 (Pre earthquake) |
1,466,239 | 154,536 | 10.5% |
| Jan-2017 (Post earthquake) |
1,387,414 | 108,300 | 7.8% |
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