Welcome to this, my very first blog on the commercial property sector both locally and nationally. My company, while based in Tauranga, operates from Auckland to Christchurch and this coverage puts us in touch with the market throughout the country.

There is no doubt in my mind that, this year, both New Zealand and the global economy have effectively dodged a fatal bullet in the face of the global economic meltdown. Had it not been for the swift intervention by governments worldwide, we could have witnessed a 1930s style depression.

Having said that, 2009 has been an incredibly tough year for many businesses with a substantial number of receiverships experienced. The commercial property sector is not immune from general economic conditions and witnessed increases in vacancy rates for warehousing and storage, particularly in Auckland, as operators chose to surrender space in the face of falling orders and tight margins. Similarly, vacancy levels rose in the office sector across the country as businesses simply either closed their doors or downsized.

Such a significant increase in vacancy levels always puts pressure on rentals as landlords have to offer suitable inducement packages to attract new tenants to the empty space.

The good news is that Tauranga has definitely weathered the storm better than most other centres from our point of view. Whilst there has been an increase in vacancies across the industrial and office sectors, it has not been through anything like what Auckland has witnessed. Also, Tauranga continues to attract some of the lowest yields (therefore highest prices) for commercial property in New Zealand.

Next week, I will provide some reasons for why Tauranga continues to be a great investment destination and some thoughts on what to look for when investing.

Until then, have a great week.