The commercial property market remains subdued with demand for retail and office space in negative territory

By Greg Ninness

New Zealand's commercial property market remains subdued, according to the Royal Institute of Chartered Surveyors (RICS) first quarter Commercial Property Monitor.

Demand for space from tenants was weakening for most types of commercial property, with industrial property the only bright spot with positive demand sentiment, the survey found.

The retail property sector has been particularly hard hit, with low levels of demand from tenants.

Comparing that to growing demand for industrial space, suggests a continuing change in shopping habits and an ongoing move to online trading.

Demand for office space was also negative, and the above trends were being reflected in vacancy rates and the incentives landlords were offering tenants to office and retail space.

The report also found that investment enquiries were in negative territory, weighed down by borrowing costs and central bank policy, and this was evident in the level of enquiries from both NZ and overseas investors.

Industry feedback suggested that flexible working arrangements such as more days working from home were still having an impact on the market and would likely continue to affect landlords as leases expired and tenants reviewed their space requirements.

This story was originally published on Interest.co.nz and has been republished here with permission.