Will confidence in Wellington’s commercial property market pick up post-election?
“Naturally, the future of the country is on everyone’s minds at present,” Tommy’s Group CEO Ben Castle says.
“Which way the voting goes is always unknown until voting day and a similar sentiment is bubbling within the commercial property market – where will we go?
“The pre-election tension has had an impact on volume and, coupled with the well-publicised interest rate position, sale numbers remain passive.
“Although there is a sense of confidence that the market is turning, the proof, like the election, is in the numbers.
“Of late, the commentary suggests that interest rates will remain at the current levels for some time and the challenge for owners and investors is that the asking yield may not get to the required levels for a transaction to support both buyer and seller demands.
“This will reinforce a potentially slower tempo of sale transactions post-election and into 2024.”
Ben says the continued flight to quality prevails in Wellington’s lease market as businesses look for high-quality NBS grade buildings that prioritise sustainability and facilities that support hybrid working if required.
“The government footprint, around 36 per cent, is significant and agencies are making decisions on their future property options.
“It is expected that government tenancy will remain stable regardless of the election outcome — meaning occupancy will continue to grow as landlords will need to continue to upgrade properties.
“Commercial development may well kick further into gear as confidence creeps back.
“However, there will be more caution taken when assessing the feasibility of projects.”
Ben points out the market will always transact, no matter the economic factors or election outcomes.
“So it is not doom and gloom by any stretch and history shows that property cycles are a fundamental to the industry.
“How long we remain in a cycle can feel a bit like guesswork – just like who will be sitting on top on October 14 – but I believe we have seen the bottom and it is now how fast we rise.
“Tommy’s Commercial are working across all property sectors in the Wellington and Greater Wellington region. From retail to industrial, office to land, Tommy’s Commercial have the expertise to assist.”
