Malls, convention centres push consents past $1b
More than $1 billion worth of shops, restaurants and bars gained building approval last year, with half of them in Auckland, contributing to a record $7b of nonresidential consents.
Statistics New Zealand said the
$1.1b for the year ended in November 2018 was 37 per cent greater than the year before.
Of the $1.1b, Auckland made up
$516 million of the retail and hospitality building consents, which was almost $200m more than the year before.
‘‘An increase in the intention to build more shops and social buildings was partly due to large consents for Auckland and Christchurch convention centres, and shopping malls in Auckland,’’ Statistics NZ construction statistics manager Melissa McKenzie said.
The rise in building consents for ‘‘social buildings’’ to $861m in the November 2018 year was $270m higher than the previous year and was driven by consents for the Auckland and Christchurch convention centres.
The record $7b in nonresidential building consents was
6.6 per cent ahead of the previous year. While some of that is due to rising construction costs, Statistics NZ said there had been a significant increase in the value of shops and social buildings consented in the November 2018 year.
Notable retail developments in Auckland included: the $233m expansion of the Sylvia Park shopping centre; the $790m redevelopment of Westfield Newmarket; and the more than $1b development of Commercial Bay, which includes retail and hospitality, offices and a hotel, in the CBD.
Retail NZ’s general manager of public affairs, Greg Harford, said increases in the population, both tourists and migrants, meant a greater need for modern and up-todate retail and hospitality venues.
Population growth was happening in Auckland, Hamilton and Tauranga ‘‘so you’d expect to see retail and hospitality building going on in those areas’’.
The performance of New Zealand’s retail sector in comparison with overseas retail markets was strong. New Zealand was outperforming Australia for retail sales growth.
Australian businesses and other foreign businesses were ‘‘sniffing around New Zealand’’ with an eye on expanding into this market, Harford said.
But retailers also faced the headwinds of consumer confidence. Although they were still ‘‘out and about spending’’, consumers were facing higher costs for insurance, council rates, and petrol taxes in Auckland, all of which was eating away at their disposable income.
That had flowed through to lower than expected growth in retail spending over the past few quarters. Shoppers were increasingly conscious of value and were not buying if they did not get good deals.
Transactions volumes were up but the average amount being spent was falling, Harford said.
So although Retail NZ was forecasting strong growth in online retail sales, it was also forecasting an increasing number of physical stores.
It was important for retailers to have a physical presence as well as a digital one.
‘‘They are both channels to market. It is important retailers are across both of them,’’ Harford said.
One of the big costs for retailers was rent, so if there was going to be more space available that might put pressure on rental prices.
The increase in consents for retail development was a vote of confidence in retailing, he said.