News

The Wellington property market continues its drive towards a balance that has been arguably very difficult to predict over the last 12 months.

The current market and property landscape has been very well publicised in Wellington. The media have done everything they can to hold Wellington as the country’s punching bag on property valuation and outlook – and although the data reflects this, it is often said that data only tells part of the story – there are more stories of confidence emerging.

Tommy’s Commercial have had a very positive Q3 across all property sectors. Offices in the CBD and Te Aro have attracted new long-term tenants, while retail on Cuba Street continues to prove a popular destination. Industrial property remains highly sought after, including smaller units, with both The Quarter and Imperial Park receiving significant enquiry.

Exciting news for Te Aro is the opening of Mitre 10 Wellington City on the 15th of November at 139 Tory Street – Top of Tory Shopping Complex. This is a transaction Tommy’s Commercial completed back in February and reinforces that there is confidence and movement in the Capital!

The cuts to both government spending and its workforce have combined to test Wellington’s resilience, and there has been an increase in office vacancy rates. Vacancy is predicted to peak in late 2026 before beginning to trend downward again in 2027.

This, in turn, creates opportunities for tenants to reconsider their office requirements. Whilst some businesses may be downsizing or exiting, others are upsizing or merging – opening up more opportunities. Landlords are willing to work with new tenants on specific refurbishments, competitive rates, and incentives.

The flight to quality still dominates decision-making by tenants, and this is now extending across different sectors. Traditionally, the office sector was the main area of ‘quality’ focus, but more and more industrial properties are being refurbished and refreshed, as landlords now need to sharpen their offerings to attract and retain tenants.

Wellington’s commercial real estate market has historically demonstrated resilience. There is a need for collaboration between the public and private sectors to drive proactive policy initiatives to ensure that both local and central government promote investment. Recently, news released regarding the proposed changes to the NBS rating system and Earthquake-Prone Building assessments is a welcome place to start – although implementation is predicted in 2027, based on the amendment Bill needing to go through Select Committee for changes to the Building Act.

From a commercial sales perspective, the Official Cash Rate cuts have certainly sparked investor interest. Yields are starting to stabilise and become more attractive, and may continue to improve in comparison to retail bank deposit rates. Insurance premiums have softened, creating a more palatable operating expense profile. With a new Council in place in Wellington, perhaps we might see some more positive ‘rates’ news!

Wellington has a great opportunity to emerge stronger and regain its reputation as a thriving business destination.

For all your commercial requirements and updates, contact the team at Tommy’s Commercial – we’re here to help.