Empty offices hit Auckland market

Enough empty office space for more than 6000 people is available in Auckland, a new update on the city's commercial property market shows.

Zoltan Moricz, research director at consultants CB Richard Ellis in the PWC Tower on Quay St, said landlords were having to offer sweeteners to office tenants, The New Zealand Herald reported today.

The city's empty office space was enough to accommodate about 6600 workers, Mr Moricz said.

Also, a 50 percent fall in value of developers' land banks was based on evidence from the few transactions completed in the sector lately and could get worse.

Mr Moricz found that in Auckland the core CBD area had 103,000sq m of vacant space. Property experts usually allocate an average 15sq m per office worker.

Mr Moricz found 14,000sq m of prime CBD Auckland office space and 89,000sq m of secondary office space empty.

After 10 years of steady rent growth the prices tenants are paying are also dropping.

Prime office rents had fallen 8.7 percent in the past year and secondary rents were down 14 percent, Mr Moricz found.

"The leasing market has become less active in the last few months. The continuing fall in net effective rents in our assessment has been largely due to increasing incentives reflecting low demand, increasing vacancies and adverse market sentiment."

Industrial property was in better shape than office property, Mr Moricz said.