A-grade office space hard to find in CBD

Demand for top-quality new office space in the CBD is outstripping supply. Photo / John Borren

Confidence has lifted in the Tauranga CBD with demand for top-quality office space exceeding supply, a business leader says.

Priority One projects manager Annie Hill said there had been an increase in private sector investment in the area.

"Demand for A-grade office space is outstripping supply so landlords who upgrade their buildings are easily able to find tenants willing to pay premium rents for good quality space," she told the Bay of Plenty Times.

Businesses could see the value of being highly visible and having access to the services and facilities that the city centre offered, she said.

"In addition these type of businesses will have significant impact of increasing the retail spend in the CBD."

When Trustpower's head office opens, there would be an additional 400 people in the city centre every day spending their money.

A number of co-working spaces had also started up in the city centre.

Priority One's Ignition opened in 2012 and expanded last year due to demand. It now houses more than 40 people who used to work from home in the suburbs.

There were three other co-working spaces in the city centre including Basestation which opened this month.

Griffiths Merchants Trust, which owns the building on the corner of Wharf and Willow Sts, pulled it down due to earthquake-strengthening issues.

Property manager Diane Rice said: "The original building was very old and would have been costly to repair to reach a satisfactory earthquake standard."

At this stage it did not know how many tenants it would have as it had not started marketing and there was no firm completion date, she said.

Insight Architecture director Matt Hodson said the new building was about 380sq m and covered two floors. "The proposed building is an extension of the existing building that is adjacent and has been designed to be complementary," Mr Hodson said.