Wellington Office Market Dynamics Q1 2026

The overall vacancy rate rose to 17.2% in 2H25, up from 15.0% in 1H25, an increase of 220bps. Prime vacancy reached 8.5%, rising 130bps from 1H25, while secondary vacancy climbed 270bps to 19.8% over the same period.​

Reduced demand for government office space, coupled with the completion of several refurbishment projects, is expected to push vacancy rates higher across all grades, with an overall vacancy rate forecast to reach around 20.0% by 2028.​

Precinct Properties recently completed an 11-storey office building at 55-61 Molesworth Street in Wellington’s parliamentary district. The New Zealand Ministry of Foreign Affairs (MFAT) and Trade is set to be the anchor tenant, with MetService also being an occupier here.​

Prime average gross rents remained unchanged this quarter at NZD 756 per sqm p.a., while secondary average gross rents also held steady at NZD 450 per sqm p.a. this quarter. Prime average gross rents are expected to increase to NZD 759 per sqm p.a. by year-end, representing an increase of approximately 0.4%, predominantly driven by operating expense increases.

Yields have not moved since December 2023, with prime yields stable at 6.35%, and secondary yields at 8.69%, with no major change expected during 2026. A sale of note was a portfolio of two properties located on Hania Street in Mount Victoria, for NZD 12.55 million.​

Wellington's commercial real estate market continues navigating a complex period of adjustment we approach mid-2026. The dual pressures of public sector austerity and a softer economic backdrop persist and are now compounded by the geopolitical uncertainty arising from the Middle East conflict and its potential flow-on effects to inflation, interest rates, and GDP growth. For a market heavily anchored by government occupier demand, this additional layer of fiscal and economic uncertainty adds to an already cautious decision-making environment.​