Queenstown was top of the list for rent and value expectations for all sectors. Photo / Supplied
Queenstown was top of the list for rent and value expectations for all sectors. Photo / Supplied
By Chris Dibble, Bayleys content manager
In the commercial and industrial property sector, a small majority of tenants and owners expect rents and values to keep rising across the country over the next 12 months - but the upcoming general election has created uncertainty.
Those are among the findings of a new 'sentiment survey' of tenants and owners, conducted by Bayleys Real Estate.
Bayleys content manager Chris Dibble says the survey - constructed from more than 5000 responses - showed the most commonly mentioned topic was the September 23 election.
"The results highlight that some tenants are adopting a 'wait-and-see approach' until the election, ahead of embarking on new expansion plans or committing to new long-term leases."
Dibble says certainty in business conditions was noted as a necessity; the looming election had caused some hesitancy among respondents.
"Despite this, the survey shows tenants are prepping for rent rises over the next 12 months, highlighting that in totality, positive business and economic conditions are being predicted over the long-term," Dibble points out.
Owners had a similar outlook, typically moving more cautiously, but are confident in their expectations of rising values in the year ahead.
"Just over half of the respondents to the tenant survey nationally expected rents to increase over the next 12 months, while only 6 per cent expected a decline.
"A similar result was recorded in the owners' survey, with 51 per cent expecting a rise in value, but only 9 per cent of respondents predicting a decline.
"Despite this positivity, 41 per cent of respondents to the tenant survey and 40 per cent of the respondents to the owners' survey expect rents and values to stay the same over the next 12 months," says Dibble.
Breaking down the results by location, Queenstown was top of the list for rent and value expectations for all sectors and in both the tenant and owners' surveys.
"More than 70 per cent of respondents in the tenant and owners' survey expected values to rise in Queenstown over the next 12 months, the highest of all locations.
"A popular destination amongst locals, as well as domestic and international tourists, the area has experienced a significant and positive period of commercial development over the past few years".
Christchurch and Wellington's office sector results showed how the earthquakes were impacting their markets, but in opposite directions.
"In Christchurch the rebuild has created an office over-supply in some areas. This is highlighted in the sentiment survey results where 16 per cent of tenants expected a rent decline, the highest percentage of all sectors and locations. However, 56 per cent of respondents predicted office rents to increase in Christchurch over the next year.
"In contrast, the Kaikoura earthquake led to a significant decrease in office supply in Wellington, which has seen demand outweigh supply. This has caused rents to increase, which survey respondents were very cognisant of," says Dibble
Other survey highlights showed that nationally, the industrial sector was seen as an industry in growth mode. No other sector had such high results across the country.
