Bayleys has released its commercial property vacancies for Auckland and some of the other centres around New Zealand, with the rest, including Whangarei to be released over the next few months.
Increased business confidence, changes in the most popular zones and building types for new commercial activity and the effects of the new seismic strengthening requirements are among the main contributing factors emerging. 
It is interesting to see how other centres are trending, and gain an overall picture of the commercial sector as a whole. Business Property Management presents an overview of how commercial property activity is shaping up in New Zealand so far.
Business confidence is sitting at its highest level since 1999 according to the latest ANZ survey, while the manufacturing sector registered the highest confidence in 15 years. A strong economic backdrop has seen business confidence surging over recent months. New Zealand’s GDP grew by 2.6% in the year to September 2013
The Auckland region is slightly above the national average, registering 2.8% growth over the same period according to Statistics New Zealand and Auckland Council.
A positive outlook for the year ahead among the local business communities has become apparent in many centres throughout New Zealand. Seismic strengthening issues are causing uncertainty in some regions for commercial tenants when selecting a site, with the two main areas of concern centred on worker safety and potential business disruption should building works be required.
Auckland Industrial
The survey, which covers the Airport Corridor, Wiri, Penrose, Mount Wellington, Rosebank Road and East Tamaki, showed vacancies within Auckland’s leading industrial precincts fell from 5.5% to 3.8% compared to last year. Industrial vacancy percentages fell in all precincts with the exception of Wiri, where the figure remained practically unchanged.
The results reflect a strong year in the industrial leasing markets. Tenants have competed with owner occupiers to secure premises as businesses have moved into expansion mode at a time when the next development phase, hindered by a shortage of land, has yet to gather full momentum
The limited supply of vacant space reflected by the latest survey results illustrate why rental levels have risen over the last year. Landlords have also been able to secure longer leasing terms as firms look to secure their position in the increasingly competitive environment.
Read Bayleys’ full report on Auckland Industrial property here
Auckland CBD Office
Auckland has long been regarded as New Zealand’s commercial capital, and as businesses continue to migrate north from the rest of New Zealand, this is expected to continue to strengthen. A growing economy and an increasing base of tenants has already manifested in an improving vacancy rate in Auckland’s central office precincts.
According to the latest Bayleys Research Auckland office survey, the overall vacancy rate for CBD offices dropped from 13% at the mid-year 2013 survey to 11% for January 2014. Commercial tenants are still migrating north, however,with a decline in waterfront vacancies offset by an increase in vacancies among the southern city precincts including Queen Street, Upper Queen Street and peripherals, and the Symonds Street Ridge precinct.
Read more about the Auckland CBD office vacancy trends
Rotorua Commercial and Industrial
There is an increase in confidence over Rotorua’s general trading conditions, with the majority of the local business community anticipating an improvement in conditions in the 12 months following December 2013.The industrial sector in Rotorua has shown the greatest level of activity, with overall vacancies improving in the last 12 months, mainly due to an increased uptake of workshops. Industrial vacancies overall remain below 8%.
A polarised retail sector is apparent, with good interest from both tenants and investors for prime property offset by diminishing interest in property with secondary locations or building quality. There is also a two-tiered market of prime and secondary space in the office sector. This is being further complicated by a market still affected by seismic strengthening concerns.
Read more about Rotorua’s commercial and industrial report from Bayleys Research
New Plymouth Residential and Economy
The Taranaki Region has been a solid performer over recent years supported by the dairy and energy sectors, both of which are set to pump significantly increased income into the local economy, and this is having a positive effect on the New Plymouth residential property market. An increased requirement for skilled labour is bringing overseas professionals to the region to meet demand.
Consumer confidence is sitting at a 9 year high, whilst business sentiment rose to a 20 year high in 2013.
Read more about the effects of New Plymouth’s strong economic position
Taupo Commercial and Industrial
The retail sector is leading the commercial and industrial market in Taupo, primarily within the tightly held CBD of Taupo. Taupo is also attracting a number of international retailers. Moves by Taupo District Council to limit new developments from spreading further eastwards has been welcomed by both tenants and property holders in the CBD. This is expected to have the greatest effect on the office market as it was in part designed to hinder any further commercial sprawl of office developments into residential zones.
Read more about Taupo’s commercial and industrial sectors
Tauranga Commercial and Industrial
The economic outlook for Tauranga is very positive, with a strong outlook for the industrial sector that is largely centred on port based activities, a budding housing sector and flourishing kiwifruit industry. The positive outlook for these economic sectors is supporting an industrial sector that is leading the market recovery, followed by the office and retail property sectors.
The last 12 months of activity in Tauranga’s industrial sector has turned around the excessive supply of vacant space, particularly for smaller units of less than 100m2, to where vacancies are now low. Larger warehouse space is also showing a significant decrease in vacant sites, although elements such as building age, stud height and location are determining where tenants are signing.
More details about Tauranga’s commercial and industrial sectors
Data courtesy of Bayleys Real Estate Ltd, Licensed under the REA Act 2008
