Office vacancies climb across NZ’s major city centres

Monday, 1 September 2025

Auckland’s CBD office sector had an overall vacancy rate of 16.5% in 2024.

Office vacancy rates in Auckland’s CBD are now second only to Melbourne’s in a sample of major Australasian cities, but it reflects a rebalancing of the market, a commercial real estate firm says.

JLL has released its first office property trends report, and it showed vacancy rates had climbed in the country’s three main CBDs.

Auckland’s CBD had an overall vacancy rate of 16.5% in 2024, up from 13.7% in late 2023 and 10.8% in late 2022.

That rate was lower than Melbourne’s (16.9%), but higher than Sydney, Perth and Brisbane, as well as Wellington and Christchurch.

In Wellington the overall vacancy rate was 13.8%, up from 6.4% in 2023, while in Christchurch it was 13.3%, up from 4.3%.

The flight to quality trend in office space has accelerated, JLL’s Chris Dibble says.

JLL’s New Zealand head of research Chris Dibble said while headline numbers had lifted across the main centres, the metrics looked at the past, and did not tell the full story.

That story was one of rebalancing markets as the flight to quality accelerated, and the gap between premium sustainable stock and older secondary buildings grew, he said.

“In Auckland, for example, about 70% of CBD office vacancies are in about 30% of the office buildings.

“In contrast, there is high demand for premium buildings in sought-after locations, such as the waterfront district, and sustainably rated buildings record significantly lower vacancy and rental premiums of up to 6% to 7%.”

A new wave of office supply was reshaping Auckland’s CBD landscape and redefining premium stock, he said.

Recently completed examples were the Deloitte Centre, Fifty Albert, The Formery, and Beca House. But there was more to come, with more than 168,000sqm of space under construction and refurbishment in the CBD, and due to come online over the next five years.

Dibble said the market rebalancing was not just about the flight to quality, it was about the impact of hybrid work and how companies used office space.

Christchurch is well-supplied with high quality office stock.

There were also different dynamics at play in the different city centres, he said.

Auckland had a lot of new supply on the market and in the pipeline, and would see demand increase after the completion of the CRL.

Christchurch’s rebuild had left it well-supplied with high quality stock, but it was challenging to build new supply which meant the lift in vacancy rates was likely to be short-term.

Wellington’s market was complex as about 30% of CBD office space was occupied by Government, and seismic considerations and high operating expenses affected it.

But improving economic conditions meant the outlook for office property was supportive, and the fact that office-related sectors accounted for about 30% of GDP underpinned long-term demand, he said.

“It’s important to note that international investment - through capital ownership and joint ventures - is increasing, and that suggests overseas investors see New Zealand attractive as a long-term proposition.”

While office blocks tend to be identified with the bigger centres, Dibble said an increase in mixed use commercial developments was leading to more office buildings in some regional centres too.

An artist's impression of the office development planned for the Five Mile retail centre in Queenstown.

A newly announced office development in Queenstown is an example. Queenstown Gateway Five Mile has lodged plans to build two new buildings at the File Mile Retail Centre in Frankton.

One of the buildings would be a 7200sqm six-storey block called Murchison Tower, made up of five floors of premium office space, and shops on the ground floor. The second building would be a three-storey car parking building, with pedestrian links to Murchison Tower.

The combined completion value of the buildings would be about $80 million, and construction was due to start in the second quarter of 2026.

Colliers Queenstown commercial director Mark Simpson said there was strong market-led demand for A-grade office space that supported growth in Frankton.

Murchison Tower would be the second office block built in the area, after the Craigs Investment Partners Office, and signalled long-term confidence in the region’s continued growth, he said.

“We expect strong levels of interest for what will be the best office address in Queenstown while remaining complementary to the existing downtown Queenstown CBD.”

Frankton was no longer viewed as just a support area for Queenstown, but as a support precinct for the wider region and a strong location for commerce, he added.