Planned construction of new commercial buildings is looking decidedly lacklustre, according to interest.co.nz's latest quarterly analysis of Statistics NZ's commercial building consent numbers.
The amount of new office, retail and factory/industrial spaces consented in the the first quarter (Q1) of this year were all low, with warehouse/storage facilities the only type of commercial property where consent levels remained reasonably high.
Just 20,588 square metres (sqm) of new office space was consented in Q1 this year, which was the lowest since Q1 2021.
More importantly, it was the lowest amount of new office space consented outside of the Covid-affected 2020/21 period since interest.co.nz began compiling the figures in 2010.
The size of the new offices being planned is also getting smaller.
The average floor area of the new offices consented in Q1 this year was 479sqm, down from 1745sqm (-73%) in Q4 2024, and down from 2200sqm (-78%) in Q3 2024.
Conversely, the estimated average build cost (excluding land) of the new office projects consented in Q1 this year was $7844 per sqm, which was the third highest in the 15 years of this data series and likely the third highest ever.
The above figures could suggest a move towards smaller, higher quality new office builds.
The full data tables for new office consents, analysed by the six main urban regions, are available here.
Consents for new retail premises remain in the doldrums.
Just 30 consents for new retail premises were issued in Q1 this year, down from 42 in Q1 last year (-29%), the lowest number ever in the 15 year data series.
At 14,391sqm, the amount of new retail space consented was also the lowest of any quarter in the last 15 years. The full retail data tables with the national and regional figures are available here.
Similarly, the 69 consents issued for new factories/industrial buildings in Q1 this year was the lowest number ever in the 15 year history of this data series.
Conversely, their average build cost (excluding land) of $4.17 million was an all time high in Q1 this year, as was the average cost per square metre of $5094, more than double what it was in Q1 2024.
The could suggest a tilt towards more complicated industrial buildings catering to more specialised uses.
The data tables for factories/industrial building consents are available here.
While there's been a marked slow down in consents for most types of commercial buildings, warehouses and other storage buildings remain the preferred favourites with developers.
There were 84 consents adding almost 241,000sqm of new warehouse/storage space in Q1 this year.
Neither of those figures were a record, but they were certainly up there with the best.
However, records were broken in the value of the building work involved, with the total estimated value, excluding land, surging past $400 million for the first time in any quarter, while the average estimated build cost of $4.9m per project was also a record.
The projects are also getting bigger, with an average size of 2868sqm, also setting a new record.
Bigger is better appears to be the way things are going for these types of projects. The data tables for warehouse and storage building are available here.
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