Sustained flight to quality amidst rising vacancy

• The overall Auckland CBD vacancy rate continued its upward trend, reaching 16.5% at end-Q2 2025, representing approximately 225,000 sqm of vacant space across all grades.
• This increase from 15.2% at end-Q4 2024 reflects a combination of new supply additions and ongoing tenant recalibration of space requirements.

Enhanced choices for occupiers

• The active supply pipeline for 2025 remains busy, with a major development completion expected at 30 Daldy Street by Mansons TCLM.
• The short-term development pipeline is expected to be slightly below average, but there are a number of projects in the planning phase, notably Precinct Properties’ +60,000 sqm development with 50% under lease negotiations.

Quality commands premium rents; incentives remain elevated

• The CBD prime average net rents increased marginally in the quarter, by 0.2%, to now stand at NZD 614 per sqm, p.a.
• The marginal increase came from an increase in the lower end of Grade A rents, which now stands at NZD 395 per sqm, p.a. (+NZD 5 per sqm, p.a.).

Outlook: Resurgent confidence

• A more accommodating financial landscape is spurring increased investment activity across various investor groups, including local private investors and institutional capital, with a growing focus on properties offering higher yields and sustainable features.
• The Auckland CBD office market is navigating a complex period characterised by both cyclical and structural changes. The improving economic backdrop has energised various sub-sectors, prompting investors and tenants to take proactive steps.