Colliers campaign cashes in on the oversupply of office space

By Campbell McIlroy

Friday 12th May 2000

ON THE MOVE: Auckland's CBD

Colliers Jardine's annual Moving Times office leasing campaign contains more quality product than the company has seen for eight to 10 years, managing director Mark Synnott says.

The over supply of office space in the Auckland market meant it was a great time for tenants to be moving.

With the Royal & SunAlliance Centre completed and the boom in the Viaduct Basin in full swing tenants were spoilt for choice, Mr Synnott said.

The new stock also meant there were a lot of good quality buildings with space becoming vacant as companies moved into these new premises.

Examples include Russell McVeagh's move from the Shortland Centre across the road to the Royal & SunAlliance Centre and Microsoft's move from 69 Symonds St to the newly refurbished Microsoft House on Fanshawe St.

A result of the level of movement was more than a third of the 26 buildings being marketed by Colliers also had naming rights available.

Mr Synnott said there was phenomenal amount of activity in the market last year, particularly in the CBD.

Of the approximately 40 leases signed by the company for over 1000sq m last year, 44% moved to another location within the CBD, 36% moved next door and 20% were new tenants in the CBD.

Interestingly, although everybody was celebrating the great success of the America's Cup it created a hangover in the leasing market.

Mr Synnott said it had the same effect as the power crisis on business because everybody was out watching the racing and not doing business and signing leases.

Despite this slow start Mr Synnott said the market was now picking up again.

Technology and e-commerce companies in particular were making their presence felt in the market, especially the top end.

Mr Synnott said the shortage of qualified people to work in the IT sector meant companies were not only having to pay top dollar for their services but also having to provide them with good quality offices.

The educational precinct is another sector of the market that has continued to expand.

Last year was a boom year for Colliers.

Mr Synnott said the signs were that this year was going to be just as lucrative.

If the two new office towers proposed by AMP and Trans Tasman Properties got off the ground the market would become even tougher.

This was despite the large number of prime office leases due to expire between June and October 2000. But this would be of benefit to CBD office tenants.

Mr Synnott said any business considering relocating or whose lease is due to expire within the next 12 months should be examining its options.

Ideally companies should have considered all their leasing options up to three years in advance of lease expiry which would help put the tenants in the driver's seat when negotiating new leases.

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