2008 has been a hugely interesting year in the property game.

Property has had its fair share of headlines. At times it has been hard to sift through all the comments and predictions to get an accurate take on what is really going on.

There has been a good deal of dire predictions. The other day I heard a journalist talk very brightly on the radio about ‘fresh gloom’! A strange juxtaposition of words.

I keep my ear pretty close to the ground and right now there is no doubt some property companies are struggling. But that is not the case for everyone. There are some new developments still well underway, most notably high rise buildings for Westpac and IAG and developments at Carlaw Park and Auckland International Airport. As these come on stream, other vacated spaces will open up.

Right now it is basically a tenants’ market, with a great deal of choice and potential in commercial and industrial space; opportunities too for negotiating good prices, conditions and fit-outs for new tenants.

This year I have often talked about the need for creative solutions. In this I include thinking about making workplaces great for staff and sustainable for the environment.

It’s interesting to note the predictions that as a green building, the IAG complex will start achieving savings for tenants within the first year, as conservation measures will reduce running costs. It’s estimated that for a well considered development, going green only adds around two per cent to the cost of a building, and this is more than paid back in savings on power, water and other resources.

There are some big sweeteners on offer for people taking up commercial tenancies, and at the same time, some huge hikes in commission expectations from realtors, some now demanding 150 per cent commission if they close a deal for a commercial property landlord.

The key to striking a good deal on a property lease in 2009 is going to be down to two things; creativity on the part of the landlord to find solutions that work for landlord and tenant alike, and for the prospective tenant, it will take confidence to go ahead and enter a lease agreement and to look beyond the likely tough two first quarters of 2009 to when the market is likely to even out.

This is Parallel Directions last blog for the year and I will be back with some more comments and updates on the commercial property market on 20 January 2009.

During the holiday my wife Kathy and I will be off in a camper van touring Fiordland, Southland, Stewart Island and Central Otago. I can hardly wait!

Best wishes to you and yours for a happy and safe holiday season.

This entry was posted on Tuesday 16th December 2008 and is filed under Property Leasing. Both comments and pings are currently closed.