Wellington Office Research 2016
Sentiment towards Wellingtons office market is improving and fast.
Following a protracted period of uncertainty surrounding the consolidation of the governments space requirements in the city, the recent announcement with Precinct Properties looks to be a turning point. Under the “Wellington Accommodation Project” the government has committed to long term leases on 68,000m2 of space in five Precinct buildings. The deal removes a huge cloud over the Wellington office market.
In the private sector demand for better quality office space has shown a marked improvement over the year and is likely to remain strong heading into 2017. Tightening vacancies at the prime end has spurred construction activity with more than 55,000m2 of new and refurbished space to be added to office stock over 2017/2018. Increased tenant movements, however, will create some challenges with back-fill space where vacancies are expected to rise. Investment activity is also on the rise with both local and out-of-town investors chasing the higher yields on offer in Wellington.
A recent Nielsen “open for business’ survey released in September 2016 and commissioned by Wellington City Council confirmed the upswing in business sentiment with 56% of businesses surveyed being more optimistic about their own prospects and a further 48% expecting the market to improve over the next 12 months. This is matched by other recent surveys including the Westpac-McDermott Miller Business confidence survey (Oct 2016) which showed confidence in the region’s economic prospects surging and ANZ’s Business Micro Scope survey (June 2016) also showing Wellington topped business confidence amongst small businesses.
Add to this growing visitor numbers, plans for a new convention centre and movie museum, the recent addition of David Jones on the retail scene, a possible lengthening of the airport runway and plans to double the international student intake amongst Wellingtons tertiary and private colleges by 2023 and there is a real air of confidence surrounding the city.
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