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PHOTO: lil artsy

Global commercial real estate firm Jones Lang LaSalle (JLL) has announced the closure of its Wellington and Christchurch offices, consolidating its New Zealand operations in Auckland. This strategic move underscores JLL’s commitment to centralizing its services within the nation’s primary international business hub.

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Market Implications of JLL’s Consolidation

The decision to centralize operations comes amidst a dynamic period for New Zealand’s commercial real estate sector. Recent reports indicate a pronounced “flight-to-quality,” with heightened demand for premium office spaces across major urban centers:​

  • Auckland: The city’s five premier office towers have experienced a historic vacancy low of 2.1%, a decrease from 3% earlier in the year.​

  • Wellington: Premium office vacancies stand at 5.3%, reflecting sustained demand.​

  • Christchurch: An impressive 15 out of 17 top-tier buildings are fully leased, highlighting the city’s robust occupancy rates. ​

These trends suggest that while JLL is streamlining its physical presence, the broader market continues to exhibit resilience and a preference for high-quality office environments.

JLL confirms Wellington and ChCh office closures

JLL’s headquarters are in HSBC tower in Auckland central. (Image: Supplied)

Christchurch’s Office Space Dynamics

In Christchurch, the office sector is demonstrating notable strength:

  • Prime CBD Vacancy: Maintained at a low 3.2% since the first quarter of 2024.​

  • Full Occupancy: 16 out of 19 prime buildings are fully occupied, with 13 maintaining zero vacancy over the past two years.​

  • Rental Stability: Average net prime CBD rents have stabilized following a 4.5% increase in the preceding quarter. ​

These figures reflect a sustained demand for premium office spaces in Christchurch, even as firms like JLL adjust their operational strategies.​

Wellington’s Office Market Overview

Wellington’s office market presents a mixed landscape:​

  • Premium Building Vacancy: Currently at 6.1%.​

  • A-Grade Vacancy: Recorded at 5.5%.​

  • Overall City Vacancy: Increased to 5.9%, up 100 basis points since the first quarter of 2024.​

  • Rental Trends: Average gross prime rents have risen by 2.1%, primarily due to escalating operating expenses. ​

These insights indicate that while vacancies have seen a slight uptick, the market remains relatively robust with upward pressure on rental rates.​

SOURCE: BUSINESS DESK