The commercial office, retail and industrial markets have not shared as much limelight as the residential sector over the past few months, but there has been a flurry of activity as interest rates continue to keep existing investors active and attract new investors into the sector.

Some recent examples in the lead-up to Christmas included two floors of 560 sqm in 61 Constellation Drive, Rosedale to Primepac Ltd, 1060 sqm  to Accident Compensation Corporation (ACC) at 55 Corinthian Drive, Albany, plus a further two 125 sqm office units at 40-42 Constellation Drive, Rosedale.
It would seem that a fast start to 2021 is also in order with a number of leases, including Unit 10/33 Apollo Drive, Rosedale, and both 100K and 222 Bush Road being leased. What Colliers agents have been particularly inundated with are queries from investors scouring the market for quality investments. Yields in the office market are expected to drop to 5% - 5.5% due to demand. However we highly recommend that should purchasers require finance that they seek pre-approval from their bank or discuss with their mortgage broker/bank the timeframe they are likely to require for finance.   
While investor conditions seem solid, buoyed by a continuation of low interest rate forecasts, occupier fundamentals remain a key factor that is likely to provide some variation in 2021. While all sectors have had a level of Covid-19 influence, naturally, it is remote working and working from home that are high on the agenda for occupiers and investors alike.
Our most recent office vacancy rate survey for the Auckland CBD undertaken over December, which is reminiscent of the North Shore office survey results we reported in September, shows us that there will be a greater number of options for tenants to choose from overall.  
But rather than watching the headlines of rising office vacancy rates, instead focussing on ‘flexibility’ may prove to be of more assistance.
For staff, flexibility includes remote working and WFH as well as having access to a quality office space. For businesses, it will be securing flexibility in office configurations, lease terms and financial contributions where available. For owners, it’s being flexible to retain and secure quality occupiers to stabilise income streams while benefitting from low interest rates.
With this positive start to the year, we foresee a very busy 2021.

Phone: 021 684 775

Email: janet.marshall@colliers.com