Market bifurcation deepens

• Office vacancy in Wellington increased to 15.9% in H1 2026 from 15.8% for H2 2025, largely reflecting continued space rationalisation across both government and private sector occupiers.
• In H1 2026, prime office vacancy in Wellington tightened by 110 bps to 7.4%, reflecting sustained occupier preference for high-quality, well-located buildings. In contrast, secondary vacancy softened, increasing by 100 bps to 20.8%.

Repositioned stock expected to dominate pipeline

• Precinct Properties has recently delivered a new 11-level office development at 55–61 Molesworth Street within Wellington’s parliamentary precinct. The building will be primarily occupied by the Ministry of Foreign Affairs and Trade (MFAT) and Beca.
• With no additional prime developments currently underway, the market’s future supply pipeline over the next three years is expected to be dominated by approximately 103,066 sqm of refurbished and repositioned office space.

Rental conditions remain stable

• Prime average gross rents stayed flat this quarter at NZD 756 per sqm p.a., while secondary average gross rents declined by 2.2% to NZD 440 per sqm p.a.
• Prime gross rents are projected to rise to NZD 759 per sqm p.a. by year-end, an increase of around 0.4%, mainly due to higher operating expenses.

Outlook: Yields soften amid cautious sentiment

• Wellington’s commercial property market continues to evolve in response to shifting occupier requirements, government sector changes and broader private sector adjustments.
• Looking ahead, occupiers and investors will need to balance the advantages presented by current tenant-favourable market conditions with ongoing geopolitical uncertainty, government policy changes and broader economic uncertainty.