AUCKLAND METROPOLITAN OFFICECOLLIERS ESSENTIALS | 2H 2018Market Snapshot - 12 Month Comparison

Source: Colliers International Research

Auckland City Fringe Office Rentals

Whilst all care has been taken to provide reasonably accurate information within this report, Colliers International cannot guarantee the validity of all data and information utilised in preparing this research. Accordingly Colliers International New Zealand limited, do not make any representation of warranty, expressed or implied, as to the accuracy or completeness of the content contained herein and no legal liability is to be assumed or implied with respect thereto.

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Overall metropolitan office vacancy increased to 6.7% in September 2018, compared to 5.1% a year ago. The main driver of the increase was the pockets of vacancies in recently completed office buildings.

Many metropolitan office landlords, especially in the City Fringe, are upgrading their buildings. These newly refurbished buildings are receiving rental premiums and longer lease terms.

In July, 109 Carlton Gore Road in Newmarket sold for $28 million and Oyster Property Group and its joint venture partner, KKR settled the $209 million purchase of Central Park Corporate Centre.

SUPPLYUnder Construction49,070m2

Proposed (to 2023)37,050m2

VACANCYPrime5.4%

Secondary7.1%

AVERAGE NET FACE RENTS ($/m2)

$288 $188$354 $227

Prime*

Prime*

Prime*

Secondary

Secondary

Secondary

AVERAGE YIELDS

6.5% 7.5%7.1% 8.0%

AVERAGE NET CAPITAL VALUES** ($/m2)

$4,045 $2,350$5,465 $3,035

Auckland Metropolitan Vacancy

L H

L H

L H

L H

L H

L H

0%

5%

10%

15%

20%

Over

all

City

Frin

ge

Sout

hern

Corr

idor

Nor

th S

hore

Man

ukau

CBD

East

Auc

klan

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Mt W

ellin

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-Pe

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e

Airp

ort

Corr

idor

Wes

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and

Sep-17 Sep-18

$150

$200

$250

$300

$350

$400

Sep-

13

Sep-

14

Sep-

15

Sep-

16

Sep-

17

Sep-

18

Sep-

19

Sep-

20

Sep-

21

Sep-

22

Sep-

23

Net F

ace

Rent

s ($

/m²)

Prime SecondaryForecast

Average prime metropolitan office net face rents have risen by 3.1% in the last year and average prime capital values rose by 8.7%.

Over

all V

acan

cy R

ate

by P

reci

nct

Since the beginning of the year, there has been over 38,660 sqm of office space completed across the metropolitan market, including 22 Pollen Street, St George Corporate Centre, Kiwi Property’s No.1 Sylvia Park and Goodman Property’s The Crossing, Building 6.

Data based on September 2018. Face rents, yields and capital values are based on averages across all precincts and does not represent the minimum or maximum rates being achieved. Financial indicators exclude buildings in the development pipeline. *Prime is an average of New-Build by precinct and A-Grade by sub-precincts. **Based on net face rents.

16

18

20

NO

RTHERN MW

Y

UPPER HARBOUR M

WY

SOUTH WESTERN MWY

NO

RTH WESTERN MWY

17Albany

$295 6.5% 1.7%

$263 7.1% 1.6%

Ponsonby/Freemans Bay$378 6.3% 3.9%

$208 7.5% 13.9%

Newton$305 6.9% 5.2%

$228 7.9% 5.6%

Karangahape Rd$320 6.6% 10.2%

$180 8.0% 16.6%

North Harbour$268 6.8% 0.0%

$249 7.4% 5.6%

Mairangi Bay$300 6.4% 0.0%

$259 7.2% 3.3%

Takapuna$320 6.3% 3.7%

$264 7.0% 7.0%

Parnell$335 6.4% 3.9%

$231 7.7% 3.8%

West Auckland$240 7.4% 14.4%

$158 8.3% 2.8%

Southern Corridor$320 7.1% 6.5%

$210 7.9% 8.5%

Grafton$320 6.5% 7.2%

$214 7.6% 10.4%

Newmarket$358 6.3% 0.5%

$231 7.4% 9.5%

Mt Wellington/Penrose$270 7.3% 5.9%

$165 8.2% 5.5%

East Tamaki/Highbrook$278 7.3% 12.8%

$176 7.9% 5.1%

Botany/Howick$173 8.2% 7.9%

Manukau$281 7.3% 0.0%

$165 8.1% 5.6%

Airport Corridor$278 7.3% 22.8%

$160 7.9% 10.4%

KEY

Avg O�ce Net Face Rent ($/m2)

Avg Market Yield (%)

Overall Vacancy Rate (%)

Annual Change

A-Grade* B-Grade& Lower

22 POLLEN STREET, PONSONBY | COMPLETED TRIUMPH CAPITAL

33 BROADWAY, NEWMARKET | UNDER CONSTRUCTION MANSONS TCLM

FOR MORE INFORMATION:

Chris DibbleDirector Research & Communications

Matt Lamb DirectorCommercial Leasing

Gareth Fraser Auckland DirectorInvestment Sales

Elena Christodoulou Research Analyst

Emily Duncan Research Analyst

Josh LeeResearch Analyst

Colliers InternationalLevel 27, SAP Tower

151 Queen St, Auckland +64 9 358 1888

DEVE

LOPM

ENT

ACTI

VITY

IMANSONS TCLM

Source: Colliers International Research*Excludes New-Build rents and yields

Market Indicators by Sub-Precinct

NO. 1 SYLVIA PARK, MT WELLINGTON | COMPLETED KIWI PROPERTY

ST GEORGE CORPORATE CENTRE, PARNELL | COMPLETED