Please see the overall commercial comment for additional context.

The Hawkes Bay office sector was initially hit by pessimistic predictions of a work from home future accelerated by Covid-19, however, while some demand has been lost to the home office, most businesses have maintained similar demand for office space.

Office rents have generally reduced since Covid-19, however the drop has been modest. Demand for modern office space remains, however the available supply of vacant secondary quality space has been growing indicating insufficient demand. Some of this secondary space is marginal, and ripe for either renovation or conversion to higher value uses (such as residential) depending on the property.

Investors have an appetite for well let and modern office space, but are inclined to reject inferior quality investments, where the risk of vacancy is greater.