Auckland is in the grip of a drought, a dearth of office space in the CBD - though experts see an abundance of prime office space on the horizon.
Things may be tight at present but, over the next 18 months, more new developments will come on stream, says Barfoot & Thompson commercial office leasing specialist Lorne Somerville. This will culminate in the completion of Commercial Bay tower - the 39-level building being built on the site on the former site of Downtown Shopping Centre, expected to be finished in early 2019.
In the CBD there has been a flight toward quality office space, a pull to move toward the waterfront and increasing reluctance to stay in older, inefficient space that does not attract and retain staff.
But, as building projects come on stream, a spike in supply is predicted. The Commercial Bay development alone will add 39,000 sq m of prime office space to the market.
Precinct Properties is building the $850 million Commercial Bay tower and shopping centre at 11-19 Customs St West. It will rise from an 18,000sq m three-level retail precinct - unlike anything Auckland has seen, plus a station on the Auckland City Rail Link.
"The impressive development is already prompting a reshuffle of occupiers in the premium buildings and we expect to see an excess of lower grade office space become available once the dust has settled," says Somerville.
"With this prime office space arriving, plus other A-grade buildings now being finished, there'll be a decided ripple effect.
"The secondary buildings around town are likely to become vacant. So the company whose lease is due to expire in 2019 will hit the market with lots of options and attractive deals.
"For the first time since the Global Financial Crisis, we're expecting a scenario where supply will exceed demand. Those who can wait to negotiate a new lease in this era of over-supply could potentially do very well."
However nobody expects the surplus to last indefinitely, Somerville warns: "With all the drivers for expanded growth in Auckland it [available office space] will be taken up within a year or so."
He says Commercial Bay will become the place to be: "This and the other new buildings coming on stream have superior amenities, green technology and prime locations closer to public transport."
Over the last five years, the supply of new office buildings has only just matched the removal of older buildings from total space available; older Auckland City buildings have been converted to apartments, likeFonterra's old building in Princes St and Telecom's in Hopetoun St.
"But that seems unlikely to continue because the numbers [to justify conversions] are getting harder to stack up. The cost of consenting and construction [to turn old offices into apartments] is getting so high," says Somerville. "Now the market is turning and supply is increasing."
One of the main reasons for the strong move to quality is modern buildings offering better efficiencies - like bringing a company into one level and stopping fragmentation of departments and teams.
"For example, IAG has recently combined seven Auckland work sites into four. Auckland Transport has gone from premises scattered all over Auckland into one site in the former Vodafone building and BUPA have just consolidated from three floors to single floor plate," says Somerville.
"Moving to more productive spaces in a better location is not only seen as a means to boost efficiency and company image, it is also a vital component in attracting the best talent."
He points out, that over the years, the most desired CBD office space has migrated from north and south, or up-and-down Queen St, to east and west - along the waterfront. Britomart brought the CBD down to the waterfront and the ASB pioneered the move to the Wynyard Quarter, attracting such companies as Bayleys, IBM and Datacom.
"Years ago, for legal firms, the ideal was to cluster near the High Court at the Waterloo Quadrant, but things have changed. Firms such as BDO and Meredith Connell, which have moved to the NZME building in Graham St, have moved away from the traditional hub.
"They can easily Uber over to the court, rather than walking or being next to it."
Somerville expects the coming surfeit of office space will work itself through, primarily due to the fact Auckland remains a desired city internationally, standing among the likes of Vancouver, Seattle and Sydney.
The Americas Cup and APEC leaders' summit (hosted by Auckland in 2021) will also see the city to the fore.
"It's a great city to live and work in, the transport woes are not unlike those the rest of the world has to deal with, and arguably we haven't realised yet how fast it is likely to grow, " says Somerville.
For example, he says Google has 100,000 sq m of office space in Sydney but only about 500 sq ms in Auckland.
"It wouldn't be a quantum leap for Google, and others as well, to say let's have 10,000 sq m in Auckland - and that would be a new building."