Are you preparing to upgrade your business premises or invest in the commercial property market? In this article, we reflect on what happened in 2023 and explain what to expect in the coming year.
Commercial property market 2023
Before we look ahead to the current year, it helps to reflect on the previous year. The economy cooled in 2023 but commercial property markets were resilient, with favourable supply and demand dynamics.
Commercial property sales
In 2023, the commercial property market was hit hard by high inflation and interest rates. A report by CBRE found the overall value of commercial sales dropped by $374 million from the second half of 2022, due to low sales volumes and a large gap between offers and asking prices.
By the second half of the year, things were looking up. In October, the executive chair at CBRE, Brent McGregor said "There's a lot of capital sitting out there waiting to be deployed” and he anticipated prices would start to elevate again soon.
Industrial market rent
Industrial market rents rose 10%, following strong economic growth in 2022. As this growth continues, you can expect this rising demand to continue as businesses recover from the economic downturn.
New ways of working
Following the rise of remote working, many offices have altered the way they operate. As a result, we are seeing new ways of working within commercial spaces, including hot desking, flex space, breakout areas, and collaboration spaces. If you want to design a commercial office building in 2024, consider if these features are worth incorporating.
2023 projects at XL Structural
We worked on several large-scale projects and special features, including service pits, specific firefighting requirements, and office spaces. This indicates that businesses and investors are looking for high-quality, reliable buildings that offer long-lasting value.
Commercial property market 2024
In New Zealand, the projected value of the Commercial Real Estate market is expected to reach NZD 363.40 billion in 2024. It is also anticipated to exhibit an annual growth rate of 3.07%, leading to a market volume of NZD $415.52 billion by 2028.
Due to increased foreign investment and strong economic growth, the New Zealand commercial real estate market has experienced a surge in demand.
This year, we’ve got some fantastic structural steel commercial build projects in design and planning, especially featuring full interior design of office spaces. Southland and Manawatu/Taranaki seem to be key areas of development. Keep an eye on our projects page for updates.
Commercial Building Depreciation NZ
Before 2010, building owners could claim depreciation on all buildings used for generating income or conducting business. On Budget Day in 2010, all tax claims relating to building depreciation were suspended.
Fortunately, it was reinstated for non-residential buildings in 2020. This means that commercial building owners may be able to claim a deduction for the amount lost in depreciation.
Budget estimator tool
If you already know what you're looking for, use our Budget Estimator Tool. Simply enter the specifications of your proposed building and we’ll email you the estimated budget range for your project. Alternatively, if you wish to discuss your project with a member of our team, don’t hesitate to contact us directly.
