Occupier options increase as more supply becomes available

• The overall vacancy rate increased to 8.0% from 7.7% (+30 bps). This comprises a Prime vacancy rate at 5.0% (+10 bps compared to Q2 2024), and a Secondary vacancy rate at 9.5% (+30 bps compared to Q2 2024).
• The Wellington Office market experienced approximately 8,000 sqm of additional sublease space being introduced in the quarter, primarily from government tenants.

Steady increase in supply expected over the next two years

• Approximately 150,000 sqm of office space is under construction, refurbishment, seismic strengthening or in planning stages in the capital’s CBD.
• A number of Prime and Secondary buildings are under refurbishment/seismic strengthening, which are expected to complete by 2027. These include 80 The Terrace, 96 The Terrace, 33 Customhouse Quay, 50 Victoria Street, 68 Jervois Quay and 13-27 Manners Street.

Stability in rents as occupier options rise

• Rents across all grades and precincts remained unchanged in the quarter. CBD Prime and Secondary average gross rents stand at NZD 746 per sqm p.a. and NZD 455 per sqm p.a., respectively.
• Based on slower leasing activity in 2024 and expected upcoming vacancies during 2025, rents are forecast to remain relatively steady during 2025.

Outlook: Change will bring opportunities for key stakeholders

• Wellington continues to navigate fiscal adjustments under the coalition government’s conservative expenditure strategy, which is impacting office space leasing dynamics, particularly in the CBD.
• Key investors are cautiously confident in Wellington’s real estate outlook, reflecting opportunities from short-term constraints and longer-term strategic positioning.