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New-build office space commands premium

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light-to-quality continues in the office market around the country as developers deliver world-class space for discerning occupiers.

Energy efficiency ratings, the ability to scale office footprints with flexi-space, the desire for natural light, well-being initiatives and access to green space – all comes at a price and with developers facing escalating costs, prime rents are on the rise.

Within Auckland CBD, some tenants in prime buildings are subleasing some of their space to counter this.

James Thorburn, Bayleys director office leasing said demand for new-build or completely refurbished space remains steady and is likely to continue this year and into 2024.

“There is a strong push to get more people back into the office, rebuild culture and increase productivity and organisations are increasingly looking to the office as a tool to achieve this.

“Many occupiers are looking for some flex space and event/conference facilities – often through an operator within a building and there’s a real focus on the ‘experience’ for employees and clients.”

Corporate occupiers in particular are demanding improved building resilience and better sustainability credentials, like NABERSNZ and Green Star ratings.

“Wellbeing is also being prioritised both physically within the building, targeting water quality, fresh air, proximity to natural light, and outdoor green spaces – along with landlord people-driven initiatives like fitness activities and events.”

Bayleys is leasing 4,654sqm of space across three floors in buildings designed to support modern, more agile ways of working and collaboration in the final stage of the Wynyard Quarter Innovation Precinct.

Completion of dynamic new office space at 124 Halsey Street and 117 Pakenham Street, which will also be home to occupiers Beca and Generator, is expected in Q1 2025, with developer Precinct Properties targeting a 6-Green Star design and built accreditation, along with a market- leading NABERSNZ rating.

Business confidence in Wellington is holding up and while businesses may not necessarily be growing, occupiers are moving around as leases expire, according to Bayleys Wellington office leasing specialist Luke Frecklington.

Some of the planned moves being seen currently are the result of seismic issues in existing buildings, which has led to teams being relocated and often fragmented across less-than optimal space.

“Large corporate occupiers and government agencies are now looking to consolidate teams in buildings with efficient floor plates that allow for flexibility and new ways of working.

“Purpose-built new-builds are underway for BNZ and Ministry of Foreign Affairs and Trade (MFAT), with these high-profile, fit-for-purpose buildings leading the way with seismic resilience and sustainability features being prioritised.”

Frecklington said there’s also movement of corporate occupiers – like EY and Fujitsu – towards the government precinct at the Railway Station end of the city, where transport efficiencies and a high level of amenity are drawcards.

With much of Wellington’s office stock aging, building owners are carrying out substantial strengthening and refurbishment work as occupiers exit, to create modern, high specification office space.

“This includes 80 The Terrace which is being completely transformed by McKee Fehl, and iconic Massey House at 126 Lambton Quay which is being reimagined by The Wellington Company,” said Frecklington.

William Wallace, Bayleys general manager South Island commercial and industrial said larger floor plates and sustainability are two key definers of the new-build Christchurch office market.

“Occupiers are very discerning about the quality of space they want to occupy, the location and the level of amenity within the immediate area.

“There’s a lifestyle element associated with modern ways of working and office space needs to reflect this.”

Wallace references an A-grade central city office development at 272-276 Antigua Street in the health precinct, where Bayleys has a 1,465sqm space plus balcony for lease on the sixth floor.

“With a highly constrained CBD office market for larger floor plates, this is a blank canvas opportunity for an astute occupier given the open plan layout and ability for a bespoke fitout.”

Bayleys is also leasing high-end new office space across multiple floors at 12 Oxford Terrace, with a range of floor plate configurations available, and underpinned by convenient location and river views.

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