KEY POINTS:
A preference for higher grade office space is reflected in the results of the latest Whangarei office market survey conducted by Bayleys.
B-grade office space, the highest grade in Whangarei, is in tight supply, says Bayleys Research in its latest overview of the Northland commercial and industrial market.
The total net lettable area for this space is just under 40,000sq m throughout Whangarei and the rate of vacancy is lowest among all grades at 3.7 per cent.
"This low vacancy rate is consistent with prime office space in Auckland," says Bayleys Research analyst Sarah Davidson.
C-grade office accommodation comprises almost half of the total net lettable area in the Whangarei commercial market at 57,540 sq m of space and the historically low vacancy rate for this space has edged up just slightly between 2006 and 2007 to 8.7 per cent, an increase of 0.7 percentage points.
D-grade office space vacancy has decreased markedly over the past 12 months.
The present vacancy rate is 15.6 per cent, equivalent to 3738 sq m, 6.4 percentage points less than in 2006. Davidson says the drop is due to the removal from the survey of just under 3000 sq m of D-grade office stock in two sub-standard buildings, since removed to make way for new development.
The shortage of high-grade office space is set to be alleviated by a number of commercial developments on the horizon, says Bayleys Northland director Lloyd Budd. A three-storey office building in Tarewa Rd, on the CBD fringe, is on the drawing board. The project was initiated by the Whangarei-based Ryan Family Trust, which was looking for commercial space itself but, not finding what it wanted, decided to build. Consents for the building are now being applied for.
The Nell Place Business Park, with exposure to State Highway 1, has been completed and will provide a much-needed commercial facility for Whangarei, says Budd.
The business park comprises 15 units, ranging in size from 260 to 270 sq m.
The area is zoned Business 2 under the Whangarei District Plan, allowing for a range of business and light industrial uses of less than 300 sq m, including retail and office accommodation.
Further north, the Bay of Islands town of Kerikeri has experienced a significant level of growth over recent years, prompting a number of new developments. The John Butler Centre, now under construction, with an estimated completion date of January 2008, will add around 18 per cent more space to the high-end office market. It will comprise 3000 sq m of prime office and retail space. The office suites range in size from 148 to 253 sq m.
High uptake has been experienced in the retail section of the development because it is located in central Kerikeri, where vacancy rates are low.
Budd says half of the office accommodation has been either leased or sold, with some of the suites being offered as serviced offices of between 16 and 37 sq m and geared particularly to professional firms opening a branch in Kerikeri, something that is becoming more frequent as the town becomes economically stronger.