Auckland: a tenant-driven marketJune 30, 2017 / By
The popularity of New Zealand’s largest city is increasing, with our tenant representatives seeing high activity in the Auckland office market. This is backed up by data from Statistics New Zealand who project that the Auckland region is likely to account for more than half of New Zealand’s population growth between 2013 and 2043, with the population set to reach 2.2 million by 2043.
This growth is welcomed by many businesses who hope to draw on a wider skillset of employees to improve their output and drive their business. However, to make the city attractive to employees and tenants, Auckland must continue to keep up with international standards or be ahead of the game on all counts.
The release of the RICS Global Commercial Property Monitor suggests that Auckland is a positive hub for tenants. The report says the Occupier Sentiment Index (OSI) readings, which measures market momentum and includes variables such as supply, demand and expectations, were considered to be strong for Auckland.
Auckland and Sydney both recorded strong OSI readings – the only two cities in the Asia Pacific region. The more positive outlook reflects the livability of Auckland and the opportunities that exist for businesses in the city.
The Auckland Chamber of Commerce Business Confidence Survey shows that in February 2017, 60 per cent of Auckland businesses think that their business situation in New Zealand will improve over the next six months, compared to 53 per cent from the previous survey conducted in November 2016.
I spoke to Steffi McKeown, commercial property consultant for JLL, who explained the pull of Auckland for businesses looking to set up offices: “The city is constantly looking for ways in which to improve and in doing so, Auckland Council is making the city more attractive for businesses and in turn, the tenant mix is growing along with the requirements. Due to the attractiveness of the city and the volume of people moving here, businesses are growing and from this, we are seeing a lot of movement as they search for more or bigger space to lease.”
Coworking and sharing space the latest trend in Auckland
Firms in the CBD are now open to the concept of co-working and sharing space. Satellite offices on the periphery of the CBD are not only convenient for those who live and work in the area, but also provide the brand a better connection to staff and clients.
When it comes to attracting skilled staff, the Auckland Chamber of Commerce Business Confidence Survey indicated that 43 per cent of businesses felt it was becoming more difficult, compared to 46 per cent in the November 2016 survey and 48 per cent in the August 2016 survey.
Location is a major factor that influences the talent pool that businesses are able to attract. The steps some businesses have made over the past twelve months has started to show as an improvement, although there is still a long way to go.
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