At the end of Q2, annual capital value growth was 7.8%. Growth has been driven from Prime Industrial and Prime office assets.
Elevated investment levels are expected to continue in Wellington from both domestic and international sources, due to the relatively high returns, as well as the forecasted rental growth in Prime Office stock.
Key investment activity in Wellington supports firming yields across the market.
While conditions remain favourable for investment and buyer bidder is elevated, a lack of suitable stock for prospective investors continues to stagnate transaction opportunity.
Development of new office stock is expected to increase as a result of the supply and demand imbalance currently present in the market.
The Government continues to be particularly active in the market with a current shortage of office space as a result of demolished space in 2016, and an ongoing expansion of the public sector.