Vacancy trends across Auckland and Wellington’s central business districts are increasingly being shaped by a clear hierarchy of building quality and sustainability performance. According to JLL’s December 2025 CBD office survey, overall vacancy across both markets stands at 16.6%, reflecting the continued impact of hybrid work patterns, subdued business confidence, and limited net absorption through 2024 and 2025. Yet beneath this headline figure lies a distinctly segmented market where Prime-grade and sustainability-certified buildings are outperforming the broader office stock.

Prime Assets Demonstrate Relative Resilience

While overall vacancy remains elevated, Prime-grade office space records a significantly tighter vacancy rate of 9.9%. This reinforces a consistent leasing trend observed across both cities: occupiers continue to prioritise well-located, high-quality buildings capable of supporting modern workplace strategies. Efficient floorplates, upgraded amenities, transport connectivity, and landlord capability remain central to tenant decision-making.

Even in a softer demand cycle, these attributes are helping Prime assets retain a competitive edge. The data suggests that although overall leasing activity has moderated, businesses relocating or consolidating space are favouring quality over cost alone, particularly when workplace experience and long-term operational efficiency are under scrutiny.

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Sustainability Ratings Deepen Market Differentiation

The segmentation becomes more pronounced when sustainability credentials are factored into performance metrics. Prime buildings holding Green Star and NABERSNZ certifications show vacancy of 7.6%, outperforming the wider Prime market. In an environment characterised by cautious tenant expansion and constrained demand, this margin is significant.

The strongest performance is observed among NABERSNZ-rated Prime buildings, where vacancy sits at just 4.2%. At this level, vacancy approaches what market analysts typically describe as frictional vacancy, indicating that available space is largely transitional rather than structurally vacant. This suggests a sustained depth of demand for assets that combine high physical quality with verified operational efficiency.

The data does not imply that sustainability credentials alone drive leasing outcomes. Rather, they act as an amplifier of existing strengths. Where multiple buildings compete within the same submarket, independently verified environmental performance appears to provide a measurable competitive advantage.

Operating Certainty and Corporate Alignment

From an occupier perspective, sustainability is rarely considered in isolation. Energy performance ratings and transparent reporting frameworks are evaluated alongside rental costs, incentives, layout flexibility, and amenity offerings. However, as corporate ESG commitments mature, buildings that demonstrate strong operational efficiency can offer greater certainty around future utility expenses, emissions reporting obligations, and internal environmental targets.

In this context, Green Star and NABERSNZ ratings increasingly support board-level decision-making. Tenants seeking to align property footprints with wider decarbonisation strategies may find fewer trade-offs in high-performing buildings. This alignment can influence decisions particularly where relocation options are otherwise comparable.

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Strategic Implications for Owners

For building owners and asset managers, the findings highlight the growing strategic importance of sustainability integration within portfolio management. As overall demand remains concentrated within a narrower pool of buildings, assets that fail to meet evolving performance expectations risk prolonged vacancy and accelerated obsolescence.

Conversely, those combining location, design quality, and credible sustainability credentials appear better positioned to capture limited leasing demand. Beyond tenant attraction, performance certifications can also strengthen capital value resilience by aligning assets with investor expectations around long-term environmental risk management.

Market Outlook

As business confidence stabilises and economic conditions gradually improve, competition for tenants is expected to remain focused on high-quality, efficient buildings. The structural shift toward hybrid working has reduced overall space requirements, intensifying competition among landlords. In this environment, the interaction between quality, location, and sustainability is likely to become even more decisive in shaping vacancy outcomes across Auckland and Wellington.

The emerging pattern is not one of sustainability displacing traditional real estate fundamentals, but of sustainability reinforcing them. In a market defined by selective demand and rising corporate ESG scrutiny, building performance is becoming a central component of leasing resilience rather than a supplementary feature.

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