Shop till you drop in retail renewal
Auckland shoppers will be spoiled for choice with the record expansion of retail space over the next few years.
Colliers International’s ‘‘Market Snapshot’’ said the 179,380 square metres of retail under construction in Auckland ‘‘is the largest it has been this cycle’’.
New tenants, including from overseas, were being attracted to Auckland, Colliers said.
Key retail developments under way now include the $790 million redevelopment of Westfield Newmarket, the $233m expansion of the Sylvia Park shopping centre and the $1 billion Commercial Bay office and retail development on the Auckland waterfront.
Colliers warned that the increase in shops in Auckland might see a potential rise in vacancies although there was longterm demand for new space.
Many retailers would be faced with steady and moderate rental growth, it said.
Retailers would face competition and higher rents for space in new major retail centres in Auckland.
However, the report also showed retail vacancies rose in Queen St, Parnell, Takapuna, Otahuhu, in shopping strips and in shopping centres overall in the year to June 2018.
Queen St vacancies jumped to 4 per cent from less than 1 per cent, while Parnell rose from just over 6 per cent to nearly 8 per cent.
They rose in Newmarket too, to near 6.5 per cent from 2 per cent, where many retailers have relocated because of the redevelopment of Westfield Newmarket.
Average retail face rents (rents inclusive of building costs) in prime areas of the Auckland CBD were static in the year to June 2018. They ranged from $1250/sqm to $4300.
Last month real estate firm JLL researcher Daniel Longmire said there had been a slowdown in the number of luxury international brands willing to pay elevated rents in central Auckland.
Retailers had become cautious about over-extending themselves in the face of rising headwinds.