A study of the factors that relate to office space demand in central Christchurch

Abstract

Demand for new office space is a function of several factors, of which the two most important are: (i) Growth in office housed employment (ii) Up-grading of existing stock Although total employment is an important indicator of the economic growth and viability of a region it has only limited use as an indicator of demand for office space. Typically, certain occupations and sectors of employment are users of central city office space, so we have where possible focused on these employment areas. By looking at the employment trends in those occupations which use central city office space we are able to get an indication of likely future demand. As well as looking at the total numbers of people in office employment we must also consider the space requirements per worker. It is the office floor space to worker ratio which provides the link between the number of office workers and the demand for office space. In considering this ratio we have drawn heavily on survey work carried out by the Data and Policy Team of the Auckland City Council. New office space is in competition with existing office space so the extent to which tenants are willing to shift from 'old' space to new must also be considered. This up-grading function is a result of the deterioration and obsolescence of existing buildings. New buildings may be able to lure tenants from old buildings by offering technological advances, e.g. built in computer wiring, high speed lifts, efficient air conditioning etc, or by providing something that the market desires such as on-site car parking or prestige accommodation. Also at work on the demand for new office space are locational considerations and economic factors such as the ability and willingness of tenants to pay rent.