New benchmark for Auckland office outgoings

As costs climb and margins tighten, Auckland’s office sector is learning that every line item matters. From power bills to rates, outgoings are creeping higher – and both landlords and tenants are paying closer attention than ever to how those dollars are managed.

That’s the message from Bayleys’ new Auckland Office Outgoings Benchmarking Report - the first deep dive into office operating costs since 2019, when the Property Council New Zealand (PCNZ) retired its own benchmarking publication.

Drawing on data from 51 Auckland office buildings, the report shows average total outgoings of $137 per square metre, up 6.8 percent year-on-year, confirming that even as rental growth slows in some locations, running costs are a critical issue for owners and occupiers.

Bayleys national director of property services, Stuart Bent says outgoings are a vital component of total occupancy costs and have become a more visible pressure point for tenants in the current economic environment.

“It’s encouraging to see owners of both new and existing assets embedding smarter tools, processes and practices to measure performance – driving higher efficiency and tighter cost control. Unsurprisingly, this aligns with the year-on-year rise in NABERS NZ and Green Star ratings, which assess buildings’ energy efficiency, environmental and operational performance.”

Bent says that while it’s not the most glamorous part of what the Bayleys Commercial Property Management division does, proper budgeting and management of operating expenses remains a key factor with tenant retention and competitive leasing strategies.

“Ensuring outgoings are competitive has been a key focus area across Bayleys’ $7 billion portfolio of managed commercial assets. This new benchmark provides landlords and occupiers with a clear view of how their costs compare to the market – and where proactive management can deliver real value.

“We hope it will also encourage more owners to share their data, strengthening the benchmark and enhancing transparency across the sector.”

The report confirms that local authority rates continue to make up the largest share of office outgoings and have risen sharply in recent years.

“Rates are a cost that sits largely outside an owner’s influence. That puts even greater emphasis on managing the components that can be optimised – such as utilities, maintenance, and building efficiency,” Bent says.

Utilities have overtaken insurance as the fastest-rising expense category, driven by higher electricity prices. Despite this, landlords who have invested in energy-efficient building systems – often alongside NABERSNZ certification – are seeing measurable returns.

Passive vs proactive management

Bayleys insights, data & consulting analyst, Eos Li says the data highlights a widening gap between passive and proactive management.

“The most efficient buildings not only deliver lower running costs; they’re also better positioned to meet evolving sustainability and reporting expectations.”

While insurance premiums have been a critical discussion point, the report shows mixed outcomes. Some properties have faced higher premiums due to flood or seismic exposure, but others have seen relative stability as insurers refine risk models following serious weather events.

“This variability underscores the importance of understanding property-specific risk factors rather than assuming broad market trends apply universally,” Li says.

Although green-rated buildings often show lower utility costs due to their efficiency, they also tend to have higher rateable values, leading to higher rates, which may offset the savings on utilities. However, the research finds that the benefits of green assets extend beyond the balance sheet.

“The green advantage isn’t just about cheaper power bills. It’s access to lower-cost green funding, better tenant retention, and improved well-being outcomes – all of which strengthen long-term asset performance,” says Bent.

“There’s no single lever that will unlock major savings. It’s about broad, proactive management, understanding where every dollar goes and ensuring those costs deliver value to both tenants and owners.”

Since the PCNZ report was withdrawn, the market has lacked an independent benchmark for office operating expenses. Bayleys’ initiative, developed through months of data collection and analysis, re-establishes that baseline.

“It’s clear that data transparency supports better decisions, and this report sets the foundation for a more informed and efficient market,” says Bayleys head of insights, data & consulting, Chris Farhi.

The full Auckland Office Outgoings Benchmarking Report is available exclusively to contributors. Those wishing to access the full report are invited to contact the Bayleys Insights, Data & Consulting team to learn how to participate in future benchmarking.

For more information, contact: insights@bayleys.co.nz