Christchurch activity has been gathering momentum - with 50,000sq m confirmed for occupation and a further 38,000sq m near signing off - but new CBD office space development beyond Christchurch was ''limited'', Colliers International, national research manager Chris Dibble said.
''However, the pipeline is growing, due to the continued pressure on supply and a more positive rental profile, which boosts development capability,'' Mr Dibble said, in a market update.
A ''flurry'' of office property transactions was expected during the first half of this year; subject to Overseas Investment Office approval, which would boost transaction numbers and aggregate values ''to near record highs'', Mr Dibble said.
''Investors are keen to capture the increase in returns on offer from CBD office premises, however, they're mindful of the increase in interest rates that's approaching,'' he said.
Mr Dibble said refurbishment had been the dominant trend in Dunedin during the past year.
He highlighted refurbishments in Princes St of the former BNZ building, former Chief Post Office and also fit-outs to Queens Garden Court and Consultancy House, plus a George St redevelopment, the latter being the only major work at present under way.
''While the availability of high-quality vacant space [in Dunedin] continues to drift lower, the injection of recently refurbished good quality space has increased tenant options and alleviated some of the pressure,'' Mr Dibble said.
Rental rates for lower graded space are ''flat'', reflecting the higher availability of space and lower demand, he said.
The Dunedin CBD area was 19% C-grade space, 78% B-grade and 3% A-grade.
''Investors remain attracted to high-quality office premises in Dunedin. However, there remains a lack of stock for them to pursue.
''The limited number of opportunities in the CBD, whether available on or off market, has meant that when anything is available, demand is strong,'' Mr Dibble said.
In Dunedin in July, Antipodean Properties sold its office and retail space, on the corner of Cumberland and St Andrew Sts, to Oamaru Property Ltd, for $10.2 million. Antipodean's 100% shareholder is Orbit Estates Ltd, in London.
Nationally, the more notable Auckland sales were the pending Lumley Centre settlement, for $146 million, Chorus House, $84 million, AECOM House, $68 million, three buildings sold to one private investor for $65.5 million, the Telecom Centre (building C) $65 million and in Wellington, $63 million for a Lambton Quay property.
While the outlook for the prime commercial sector remained bullish, and could flow through to the secondary sector, Mr Dibble said higher levels of growth ''were not blanketed across all cities''.
Each was reliant on the support from the fluctuating combination of private, public and agribusiness activity.
