Office vacancy has hit a record low in central Christchurch as businesses leave behind the suburbs, with more buildings needed to cater for the demand.
Christchurch central. Photo: RNZ / Nate McKinnon
Commercial real estate firm Colliers said office vacancy in the city was at 9.7 percent, the lowest since the company began surveying the market in 1993.
It said demand from businesses wanting to move back into the central city - which was severely damaged in the earthquakes more than a decade ago - was fuelling the shortage.
Colliers Valuations and Advisory Services director Gary Sellars said businesses had continually moved back to the city centre over the past few years.
"The suburban office market has suffered in the last five years, losing tenants to the city and vacancies increasing.
"Out in the suburbs we've got vacancies up to 16.4 percent at the moment and rents in the suburban areas have drifted backwards and stagnated, whereas in the [central business district] we are finally getting some rental growth because there's competition for space," he said.
Sellars said there is currently no corporate office space larger than 350 square metres in the central city's inner core, the area that covered the retail precinct through to Cathedral Square.
He did not believe a commercial building boom was on the horizon, but felt more builds were needed.
"It's more likely to be a considered redevelopment process and I'd be surprised if we see any more than three or four, or maybe five at the maximum office buildings built in the next five to six years."
It wasn't just the office vacancies diminishing, retail vacancies also reduced year-on-year according to Colliers data.
In 2018, nearly a quarter of retail space in the central city was vacant, and it was now at 6.1 percent, Sellars said.
