The overall vacancy rate increased to 12.2% in 1H25 from 5.4% (+670bps) for 2H24. This comprises a CBD vacancy rate at 13.3% (+880bps as compared with 4Q24), and a Suburban vacancy rate at 9.3% (+180bps as compared with 4Q24).

After a 4.5% increase during the first half of 2024, CBD prime average net rents have remained steady, currently at NZD 420 per sqm p.a. This is primarily a result of the completion of an approximately 14,000sqm uncommitted recently refurbished office building, for which leasing efforts are currently underway.

With this backdrop, CBD prime average net rents are expected to remain unchanged at least until the second half of 2026, with the upper and lower ends at NZD 450 per sqm p.a. and NZD 390 per sqm p.a.

In addition, supply is expected to increase further during the next two years as a few mixed-use developments reach practical completion, such as those on Worcester Street and Cambridge Terrace. Although there is interest in high-quality properties at good locations, leasing deals are taking longer to finalise compared with the last two years.

In 4Q24, yields tightened by 15-20bps, bringing prime and secondary CBD average net yields to 6.40% and 7.13% respectively. These levels have held steady through 3Q25, and are projected to tighten by approximately 9bps by the end of 2025.