Industrial property is expected to be the most consistent performer, he says. "Auckland and Wellington industrial vacancy rates did increase marginally post-2007 but Auckland's overall rate is now back under six per cent while Wellington's vacancy is holding at between seven per cent and 7.5 per cent. Christchurch's industrial sector, particularly in the favoured western part of the city, will continue to benefit from the recovery in the regional economy and the rebuild as it gains momentum."
Rundle says Auckland's CBD office market is recovering well with the vacancy rate down from a peak of 14.05 per cent at the start of 2010 to 12 per cent. The total amount of office space occupied in the CBD has increased 15 per cent since 2010.
"Firms are continuing to take a hard look at their operational costs, including real estate expenses and where possible exploring new workplace design concepts that enable them to shrink the occupancy footprint."
Rundle says domestic and international funds are seeking opportunities to secure New Zealand property assets as the markets continue to recover. "With the traditional European and American property markets not offering the level of returns they have in the past, offshore investors will look more and more at diversifying their funds into the Asia Pacific region to access the higher returns on offer."
He says the market recovery is also reflected in investment performance indices generally showing total income and capital returns on the increase.
Earthquake rebuilding in Christchurch is identified as a key factor in growth forecasts for New Zealand. While it has taken time to gather momentum, the rebuilding in 2013 is anticipated to be significant.
"Auckland also looks to be generating its own momentum. It is getting an extra boost from a strong residential market driven by a physical shortage of housing stock.
"The benefits of a generally improving national economy, combined with the activity in the Canterbury and Auckland regional economies, will feed through to other centres but this will take time. Until it does, the contrast between Canterbury and Auckland and the rest of New Zealand will continue to be reflected in commercial and industrial property markets in 2013."
In contrast to Auckland, Wellington's office market, which is dominated by the Government sector, is in a holding pattern, says Rundle. "The move to quality, combined with a shrinking government sector and limited non-government tenant growth, will mean the core tenant base will continue to consolidate in 2013. However, owners of well located buildings with high seismic specifications will do well."
He says Christchurch is a new situation. Its office buildings are overflowing following the exodus of businesses from the CBD to evolving fringe office parks.
The outlook
Subject: Commercial property market research
Undertaken by: Bayleys Research
Findings: Vacancy decreases continuing
Predictions: Recovery to gather speed this year, Industrial will be most consistent performer
