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Auckland offices are enjoying occupation levels not seen for 20 years.
Property consultants DTZ yesterday released studies of the Auckland and Wellington commercial office sectors and found big growth in demand and sinking vacancy levels.
Auckland's CBD office vacancy rates fell from 8.9 per cent last June to 6.8 per cent in September and now stand at a record low of just 5.3 per cent.
"This is the lowest vacancy rates recorded since the mid-1980s," DTZ found.
And while economic drivers are keeping Auckland offices scarce, the huge expansion of Government has fuelled Wellington occupation levels.
Vacancy rates in the capital, which stood at 7.1 per cent last June, fell to 6.8 per cent by December and space in that city's blocks remains popular.
DTZ said Auckland's office sector was incredibly strong.
"A buoyant economy over the past five years has been the major factor contributing to the strong overall demand.
"Although the slowdown in the economy is starting to be felt across some sectors, it has had little if any negative impact to date on the office market."
Many new buildings had risen in Auckland lately, sparked by increasing demand for high-quality office space and limited supply of existing stock.
DTZ cited developments by Mansons TCLM in Quay Park for BNZ and GE Finance and a Fanshawe St office block as recent examples.
The BNZ/Deloitte block on Queen St will bring a further 23,000sq m of prime office space and AMP NZ Office Trust's refurbishment at 21 Queen St is due to be finished next year.
Newcrest has the former Seamart site on the Fanshawe St/Market Place corner and has started a 9000sq m office project there and much of that has been leased to IAG.
DTZ said Cooper And Company's Britomart project would bring more prime office space in that area.
New projects being discussed included the Valad/Buckingham project on the West Plaza block, Westfield's Downtown Shopping Centre redevelopment, Pelago's Cook St depot site proposal and more new blocks from Mansons, DTZ noted.
The Chancery podium site could also be developed.
A number of developments are proposed and being marketed and DTZ said it expected the Auckland office market to continue growing, experiencing moderate rental growth in the short to medium term.
The majority of office vacancies in Auckland were in the B-grade and C-grade stock.
