Culum Manson of Mansons TCLM took the Herald on the first tour of Auckland’s 32,448sq m FNZ Centre, 50 Albert St. Video / Carson Bluck
Large Auckland CBD businesses are moving, shifting around 7000 staff late last year, with the effects quantified by a new study out today.
Zoltan Moricz, CBRE New Zealand executive director and research head, today released the latest Auckland CBD Office Spark Market Trends report.
That showed that at the endof 2024’s second half, around 233,000sq m of all grades of Auckland central-city office space was vacant, comprising about 15.9%, up 1.4% on the first half of last year.
“According to our records, there were office tenant moves covering 81,000sq m in the CBD in H2 2024. I estimate that this would have involved about 7000 employees,” he said.
Zoltan Moricz of CBRE released the survey of 20 financers, telling how they view the property sector.
Asked about that rising vacancy, Moricz said “It didn’t come out of the blue. But it shows demands by occupiers for new buildings. The overall market demand has been resilient. But the size of the demand has not been large enough to offset those vacancies.”
Bank of China had gone from around 1700sq m to 2000sq m, he said.
Global wealth management business FNZ expanded from around 900sq m in PwC to more than 4000sq m at Fifty Albert, Moricz noted.
Milford Asset Management had also increased its footprint at Fifty Albert, Moricz noted, but Spark had reduced space requirements substantially.
The Vero Centre's owner Kiwi Property announced that an unnamed Hong Kong-Chinese buyer was on the hook, subject to Overseas Investment Office approval. Photo / Michael Craig
The CBRE research said: “The flight to quality remained a prevailing trend underpinning the office occupier market in H2 2024 but occupancy changes often also represent more of a sideways move from one prime to another prime building. This has pushed Grade A vacancies into new highs during the second half of 2024.”
A prominent trend was the large number of substantial changes at the end of the year, much of it triggered by Fifty Albert’s completion.
“Ripples of backfill vacancies cascade across the city, both in late last year and into this year, as former premises re-enter the market, with or without refurbishment,” CBRE noted.
Consequently, H2 net absorption and vacancy has benefited from double counting of occupancies where tenants who have committed to new premises were yet to vacate their current occupancy at the close of last year.
The biggest examples of this were relocations by NZ Customs, Kotahi and Baker Tilly Staples Rodway, CBRE said.
That would leave around 9000sq m of space that was vacated by those occupiers.
Overall, the end of 2024 CBD office vacancy rate of 15.9% was more favourable than CBRE had forecast, the study said.
Moricz said hybrid working continued to have an impact, cutting office footprints.
“The influence of this trend on overall market dynamics is fading. Right-sizing business premises is no longer a one-way street of reducing the size of an office occupancy. Many companies that are in a growth phase are expanding their office footprint. There were several of these during 2024’s H2,” he said referring to the new research.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
