Demand for top grade offices on rise

Chris Dibble, associate research director of Jones Lang LaSalle. Photo / Supplied

Tenant demand for top-grade Auckland offices has improved and empty floors are filling up with workers.

Chris Dibble, associate research director of Jones Lang LaSalle, said the CBD office market showed a solid turnaround in demand, with a reduction in vacant space over the second half of last year by just under 16,000sq m.

"Auckland's overall CBD vacancy rate decreased from 14.2 per cent in the first half-year to 12.8 per cent in the second," he said.

Prime office vacancies fell from 12 per cent to 9.8 per cent, but secondary vacancy levels remained static around 16 per cent.

"Occupier demand is building, especially for prime office accommodation with limited contiguous space available.

"Anecdotal evidence suggests an active market in 2012 as competition for limited prime vacant space intensifies," he said. He calculated that about 25,000sq m of major office space would be completed in the CBD during the next 24 months.

The city's single largest office block now rising is ASB's new headquarters on the waterfront, being developed and to be owned by NZX-listed Kiwi Income Property Trust.

Dibble predicted occupier options would diminish in the next 24 months.