The overall vacancy rate increased to 8.1% for 1H25 from 5.5% (+260bps) for 2H25. This comprises a CBD vacancy rate of 5.8% (+110bps as compared with 2H24), and a Suburban vacancy rate of 3.0% (+190bps as compared with 2H24).

Named Downtown and being developed by Brooksfield, a 20-building complex by Peebles Group will reportedly be the first large-scale mixed-use development for Christchurch. Its collection of three to five storey buildings will comprise commercial and residential spaces.

Following consecutive quarterly increases since 3Q23, CBD prime average net rents have stabilised at NZD 925 per sqm p.a. since 3Q24. This rate spans from NZD 1,200 per sqm p.a. at the premium end to NZD 650 per sqm p.a. at the entry level. Although they showed no growth this quarter, rents have demonstrated significant recovery since 2022, with present rates representing a 19% increase from their prior lows. This performance contrasts sharply with CBD retail markets in other major CBDs across the country, where rental rates have either declined or plateaued.

The upper end of CBD prime rents is expected to reach NZD 1,225 per sqm p.a. by 4Q26, mainly due to continuing demand from international and luxury retailers. Several of these retailers have opened their first South Island stores during the last year. Due to the same reason, incentives have remained at 8.3%, after decreasing from 12.5% to this level in 2Q24.