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Bayleys Research
ANNUAL 2007 NORTH SHORE PROPERTY FOCUSSOLID GROWTH SHOWN IN OFFICE MARKETCommercial office development in Auckland’s North Shore has continued over the last 12 months with a further 27,000m2 being added to the region’s inventory to reach just over 300,000m2 of total net lettable area, according to the latest survey results from Bayleys Research. Looking to the next 12 months, the development momentum looks set to continue with a number of new office buildings on the North Shore currently in construction or in the pipeline. The latest figures show the North Shore to be outpacing the other main office precincts in Auckland. By comparison the Southern Corridor’s net lettable area is stable around 158,000m2, the City Fringe increasing by just under 10,000m2 and the Central Business District (CBD) decreasing by just under 9,000m2 due to a number of refurbishments and redevelopments taking place.
The North Shore office market has experienced impressive growth over the last six years with over 85,000m2 of dedicated office space added to the survey, firmly establishing itself as an important office market in the Auckland metropolitan area. While the growth in floor space has threatened to lift the vacancy rate, leasing and owner occupier activity has been strong enough to minimise the impact with the current vacancy rate of 9% well below the high of 11% recorded in 2003. Closer analysis reveals that in 2003 a number of office developments were undertaken with little or no tenant pre-commitment with over half of the new office space added to the survey being vacant space. This ultimately pushed the overall vacancy rate up five percentage points from 6% recorded in 2002 to 11% just 12 months later. While there has been a similar increase in floor area this time around, the amount of new space introduced to the market has had stronger tenant pre-commitment, with less than a third of the new space added being vacant. This has enabled the vacancy rate to remain at sub-10% levels. |
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