Nearly $800 million of new office and warehouse buildings consented in the second quarter

Property / news

Value of new office and warehouse buildings being consented running at record levels

10th Aug 22, 1:46pm by Greg Ninness

Commercial property developers are showing no lack of enthusiasm for new projects with the value of new office and warehouse projects hitting record levels in the second quarter of this year.

The latest building consent figures from Statistics NZ show that $314 million of new office space was consented in the second quarter of this year, which was the most in any quarter since interest.co.nz began compiling the figures in 1991.

Additionally $391 million of new warehouses/storage buildings were consented in the second quarter which was also a record.

The surge in new office building consents was almost entirely centred on the Auckland region where 63,374 square metres of new office space was consented in the second quarter.

That was the most new office space consented in Auckland since the third quarter of 2017.

The average estimated build cost was $4958 per square metre.

The consent figures for new warehouses are more complicated, with the record $391 million of new warehouse space consented in the second quarter of this year driven mainly by a big jump in the value of projects rather than an increase in the amount of space consented.

Just over 179,000 square metres of new warehouse space around the country was consented in the second quarter, down from more than 200,000 in each of the preceding three quarters.

However the average estimated build cost in the second quarter jumped to $2188 per square metre, up from between $1267 and $1435 per square metre over the previous four quarters.

A more detailed regional analysis of building consent trends for new office, retail, warehouse and factory buildings is available on our Commercial Building Consent Analysis tables.

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16 Comments

by WestieAJ | 10th Aug 22, 1:58pm 1660096726

Holding excess inventory is expensive. Supply chain issues are slowly but surely resolving. The costs of international shipping are slowly falling as well. The post Covid demand spike is over. Businesses will revert back towards to just in time. Instead of just in case.

What does that foretell for warehouse space demand?

Office Space? Will employers soon have the power to cancel WFH flexibility and force workers back to their desks?

by GV 27 | 10th Aug 22, 3:18pm 1660101515

Many pre-Covid contracts have a 'place of work' location that is fairly non-negotiable that requires people to be on-site. WFH is generally an office policy.

If you've job-hopped since Covid and have a contractual number of WFH days in a more up to date contract then you may be one of the lucky ones.

by RickStrauss | 10th Aug 22, 3:28pm 1660102111

My contract is pre-COVID but companies are aware that WFH flexibility is now a source of competitive advantage/disadvantage in the recruitment market, so that flexibility has become an expectation and - in our case - a reality. Time in the office is structured around collaboration, time at home around productivity. Loosely speaking.

by The Person | 10th Aug 22, 4:01pm 1660104084

How do you be productive without collaborating? In the knowledge industries they are one and the same

by RickStrauss | 10th Aug 22, 4:14pm 1660104874

I hope you're kidding :D

by Rob Reid | 10th Aug 22, 7:39pm 1660117170

Gonna go out on a limb here and say you are not in IT.

Basically, a day where I have to go to the office is a day like any other but with 2.5 hours wasted for no return., plus bus fare.

Collaboration is praying to be left alone for decent chunks of time when we can focus. If we need a nerd or a tester to check something or provide input it's a quick ping on a tool like MSTeams, then leave them alone to get some real work done.

Meetings actually work better if everyone is dialed in remotely. If some are gathered in a meeting room and the rest are at home there are weird wasted moments when nobody is quite sure if the question was to them or whatever.

If I had my way, I would never ever set foot in an office again.

by The Person | 10th Aug 22, 10:56pm 1660128982

I'm not talking about meetings, they happen once a fortnight at the start of a sprint. I'm talking about daily collobaration with your team. You know where you are all working together to solve a problem? Stuff spending all day on slack calls. Testers are working hand in hand with developers to refine requirements, understand issues, and get stuff to done. Your work sounds old sk00l working in individual silos. Sure I might feel I am getting more stuff done, working in isolation without distractions, but as a team we'll be less productive. All those interruptions? That's the team self organising and sharing a common understanding of the problem and solution domain.

by GV 27 | 11th Aug 22, 6:52am 1660157569

I think the realisation many came to is that driving across the city each day did none of those things either, but it did take time. You can't give that back to people and they often aren't paid for it. So... why?

by Kohukohunui | 11th Aug 22, 7:46am 1660160763

Your work sounds old sk00l working in individual silos

(proceeds to recite old school preconceptions about collaboration needing to be in person, along with some tired once-at-start-of-fortnight scrum stuff)

by The Person | 11th Aug 22, 8:58am 1660165100

Anyone found a decent online whiteboarding tool yet? I've tried many and give up in frustration every time.

by Kohukohunui | 11th Aug 22, 9:09am 1660165789

https://www.figma.com/figjam/ is the least worst I've tried recently, though it's still a ways from the real thing.

by The Person | 11th Aug 22, 11:46am 1660175198

pretty good thanks.

took a while to figure out i could just close the 'what template would you like' screen. No goddam reallife whiteboard has forced me to choose from 100+ templates before i could start drawing simple boxes and lines.

by The Person | 10th Aug 22, 4:00pm 1660104019

The surge in new office building consents was almost entirely centred on the Auckland region where 63,374 square metres of new office space was consented in the second quarter.

but i thought the city centres were dying cause everyone loved working from their bedroom?

by Averageman | 10th Aug 22, 4:50pm 1660107004

Indeed. The City has other issues with no students, the rail project disruption, and increased crime. Most offices I know are down scaling on renewal so agree its seems at odds with whats happening.

by Davo36 | 10th Aug 22, 6:28pm 1660112912

The increase in office space is somewhat confounding.

And yes, construction costs are just ridiculous these days.

by phalanax | 10th Aug 22, 6:55pm 1660114545

Flag residential...everyones doing commercial.... the next wave is here...lol Goodness those build cost rises are obscene. Funny thing RE, I think its cooked its Goose with residential and it would be a brave man that ploughs into commercial with those sort of cost rises at the present time.