Capital Crossroads: Wellington beyond the public service
Saturday, 11 April 2026
Capital Crossroads is a four-part series examining the pressures facing Wellington – and what it will take for the capital to thrive again.
Last week lines of shoppers stretched along Lambton Quay and into Brandon St as people excitedly waited for the new Hikoco shop to open.
The K-beauty brand opened a Wellington store to the delight of shoppers. The store is in the old Kirkcaldies store where huge sales used to see similar queues twice a year.
It’s an unusual sight in Wellington now.
The Post reported early in the week that between November 2023 and February this year, a net 1578 companies vanished from the capital region.
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Every other region tracked by Stats NZ showed a net increase in active companies, with more than one new company registered for every company that was shut down.
Why is Wellington losing out?
It’s not one thing. There is nothing to point a finger at and say if we sorted this out everything would be good.
It’s cost of living increases that see people reconsider their spending, it’s a fundamental change in how we work and how often we come into town, it’s roadworks and disruptions that mean we make the decision to not to use that road where that business is, it’s a pandemic and a fuel crisis and election reshuffling, job losses and infrastructure failure and a city leadership that struggled.
Late last year the Wellington Chamber of Commerce’s pre-election report said the city’s future success meant moving away from its ‘government town’ label.
Wellington has long been defined by the public service. Wellington Chamber of Commerce’s chief executive Hayley Horan says it comes in at 28% of the local work force.
But as government jobs change and the capital’s workforce shifts, a bigger question is emerging: what is Wellington without it?
Are we coffee and restaurants? Movies and special effects? Windy weather?
In fact, Horan says Wellington’s business community is much more rich and diverse than people first think.
The last quarter of 2025 carried a hint of hope for Wellington - business confidence had nearly tripled.
It was a bit of welcome news for a business community who had been holding on to the mantra ‘Survive to ‘25’ that had extended into 2026.
So it’s with a bit of a rueful laugh that Horan knows the chamber’s more optimistic business confidence survey was put out just before the fuel crisis.
The survey showed confidence had risen from 15% in the third quarter to 43.9% for the last three months of the year, with the most striking change was in how businesses view their own performance, Horan said.
Half of respondents expect their financial position to improve over the next 12 months, while just over 6% anticipate a decline.
Around a third of business leaders also believed the Wellington economy will improve over the coming year, compared with fewer than one in five who expect it to decline.
Horan said what they were hearing from Wellington businesses was realistic optimism.
“We can’t be reliant on an old narrative of what Wellington is,” she says.
In reality there is more - science-based businesses are about 27%, financial services 17% and the IT and tech sector is growing.
Locally founded businesses like Xero and Hnry are good examples but there are others like Storypark, Good Nature, game developer Pik Pok, Floating Rock Studio, Dinosaur Polo Club, RiffRaff Games and A44 Games, fusion energy startup OpenStar or lighting specialist Grouse Lighting.
Wellington has an above average concentration of knowledge-intensive jobs - 47.6% of the total workforce compared with the national average of 33%.
In the list of businesses that employ hundreds, if not thousands, are AMP Financial Services, the banks, Health NZ, Interislander and Victoria and Massey Universities.
“We have this narrative that a large percentage of our workforce has been disestablished, when there are many pockets of growth,” Horan said.
Game development jobs grew 12.8% last year to September 2025 with 34% of the country’s game development workforce (eligible for the Game Development Sector Rebate) based in Wellington and 11 of the 40 studios awarded the rebate were also Wellington-based.
In the creative sector, the biggest would be Wētā Workshop which does props and effects for films like Lord of the Rings and Avatar and Wētā FX which specialises in computer-generated imagery, animation and digital visual effects. They are a post-production company known for their work on films such as Avatar.
They bring in business that Screen Wellington last year conservatively estimated at contributing $25 million to the local economy and employing over 400 crew members.
A big part of their legacy is the many graduates who have gone on to start companies rooted in technology and IT with offices in Wellington.
New business registrations in Wellington until September last year showed there were 40 in financial and insurance services or scientific fields, 31 professional, scientific and technical services, 14 retail and trade, 12 accommodation and food services and seven for arts and recreation.
So what’s holding us back?
Even if all the other problems were solved, Wellington is a city with limited land and limited space.
Wellington’s commercial rents are the highest in the country – about $750 per square metre for prime space – even as vacancy rates climb, highlighting a mismatch between the cost of space and the level of demand.
Auckland comes in at $615 and Christchurch’s $415.
In February commercial real estate firm JLL said commercial vacancy rates were just over 17% - and they predicted it could go to 20% in 2028.
“Approximately 147,100 sqm of office space is under construction, refurbishment, seismic strengthening or in planning stages in the capital’s CBD, with only 18,700 sqm of this space known to be pre-committed at this stage.”
Commercial rates is also something Horan thinks needs to be addressed. It’s one of the main points from the Wellington Chamber of Commerce’s Green Light Economy report from last year.
In a report last year Infometrics principal economist Nick Brunsdon said Wellington’s commercial rates were the highest in the sample of cities - analysed at 2.4%. The capital’s commercial rates were also the highest as a percentage of capital values for commercial offices, CBD retail and accommodation rating units.
The Infometrics report said commercial rates amounted to 2.4% of capital values in Wellington, well ahead the second highest, Porirua at 1.8%, and well ahead of the lowest, Christchurch and Auckland, both on 0.9%.
“Wellington has the least affordable rates for offices, CBD retail, and accommodation rating units out of the ten cities analysed. For suburban retail and industrial rating units, Wellington is tied with Porirua for the least affordable rates.”
Our insurance is also high. Wellington pays more for its high seismic zone, between 30% to 60% more.
Is there an answer?
Horan says what Wellington needs is a more cohesive approach to business, to supporting and attracting businesses to come here.
It’s one of the reasons the Chamber is championing a business advisory council - under way with the Wellington City Council - to look at development and strategy.
Along with that is making it easier to navigate all the regulatory framework for businesses, start-ups and small to medium-sized businesses.
It would also like to see a portion of commercial rates used for start-up initiatives.
“We can weather the storms,” Horan said.
She said they were hearing from businesses that they needed practical things done.
One is to revitialise the city centre. They are not talking about the big Golden Mile project, but rather a clean up - making the city attractive.
First Retail’s Chris Wilkinson said Wellington City had unique features and was now very much two sectors - the Lambton Quay corporate end and the Courtenay Place/Cuba St area with its hospitality and younger/funkier crowd, bridged by Willis St.
It’s heart now was the new library and Civic Square which heaving with people lately, he said.
“Wellington is finding its feet again. It’s been challenging since 2016 since the big earthquake that had a chilling effect on the city,” Wilkinson said.
A city needed to be inclusive and there was also a need for more green spaces, he said.
When international planning expert Alain Bertaud visited Wellington last month he pointed out that what brought people into the city was that there was something there they wanted.
Perhaps that’s why Hikoco attracted so much attention.
In the next part of Capital Crossroads we dare to dream. What could Wellington be and how do we get there?