Positive CBD property outlook

Wellington's commercial property market has improved during the last six months as the city begins to feel the positive effects of a growing economy, reports CBRE.

Prime CBD office space remains in strong demand and this has been reflected by increasing rents in the past six months.

The limited pool of prime office stock has also seen tenant and investor interest in seismically acceptable secondary CBD office space.

Despite an increase in CBD shop vacancies, demand for quality well-located retail space remains high.

But secondary CBD retail property faces a difficult year as a number of leases are about to expire, with a reduction in the number of potential tenants.

Prime industrial stock saw a slight increase in rents as the sector continues to rebound from weak conditions in late 2012 and early 2013.

The agency's latest Marketview report says 2014 is likely to see an increase in investment activity.

A number of CBD office buildings are already on the market and several more potential listings are understood to be in the pipeline.

"Growing confidence in the Wellington economy, coupled with the ongoing appeal of New Zealand commercial property yields to overseas investors, means that investment conditions in the city remain favourable."

Low interest rates and continued strong growth in New Zealand's construction sector had been key drivers in the country's economic recovery.

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Positive CBD property outlook