Auckland waterfront office space grows

Good office space in central Auckland is getting harder to find and developers are moving to meet the need, favouring areas around the waterfront, property agency Bayleys says.

In the agency's latest Office Leasing Focus publication, Bayleys' commercial and industrial general manager, John Church, said several developments were on the way that could create more than 100,000 square metres of high-quality office space.

They included Fletcher and Goodman Group's new head office for Fonterra in Fanshaw St, Manson TCLM's speculative 18,600sqm building in Victoria St and Precinct Properties' revamp of the Downtown Shopping Centre.

He also noted Precinct's proposal to build five office buildings in the Wynyard Quarter, Goodman's One Central Park building in the southern corridor and DNZ Property's office development in Corinthian Drive, Albany.

"However, because of the long construction lead times involved in constructing large office buildings, the reality is that the options for businesses looking to relocate before the end of 2015 will be limited - and increasingly so as demand continues to outstrip supply," he said.

Bayleys research analyst Sarah Davidson wrote that more than 80 per cent of prime office space in the central business district was now in the waterfront's northern precincts.

Better use of waterfront space was a global trend, and in Auckland this had begun with the Viaduct Basin and then the Wynyard Quarter, she said.

Before the global financial crisis, the vacancy rate in the northern CBD had been about 8 per cent, but an improving economy meant demand for high-quality premises had picked up again.

Vacancy rates in the northern part of the central city had dropped to single digits, while the southern precincts had moved to above 12 per cent on average.

Examples in the north included the Britomart office precinct, which had the CBD's lowest vacancy rate at 1.1 per cent.

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Auckland waterfront office space grows