Older prop­er­ties be­ing trans­formed


A trend of con­vert­ing in­dus­trial sites into re­tail spa­ces is ex­pected to con­tinue, as de­mand in­creases in the Welling­ton re­gion.

New re­search from CBRE shows a rise in the num­ber of in­dus­trial sites be­ing trans­formed for large re­tail­ers, ‘‘par­tic­u­larly ev­i­dent’’ in Pe­tone, and ex­pected to be­come more com­mon in Porirua and Lower Hutt.

De­mand by re­tail­ers, cou­pled with hunger for more in­dus­trial de­vel­op­ments, has con­trib­uted to ris­ing land prices in the sec­tor.

Land val­ues in­creased to $365 per square me­tre over the past six months, with the largest in­creases in Plim­mer­ton and Porirua.

Mean­while, de­mand for office space was con­tin­u­ing to out­strip sup­ply, with de­vel­op­ers con­sid­er­ing new build­ings.

CBRE se­nior an­a­lyst Richard Carr said all in­di­ca­tions pointed to more de­vel­op­ment in Welling­ton, how­ever it could be ‘‘more of a medium-term out­come’’.

‘‘While rental growth is fore­cast, rates are still be­low the eco­nomic fea­si­bil­ity re­quired of new de­vel­op­ments.’’

Re­search also shows de­mand for prime space in the re­tail sec­tor is strong, with in­ter­na­tional re­tail­ers in­di­cat­ing their de­sire to en­ter the Welling­ton mar­ket.

An ex­am­ple of this was Mecca leas­ing the ground floor of Top­shop’s old site on Lambton Quay.

Despite this, CBRE Welling­ton man­ag­ing di­rec­tor Matthew St Amand said there were still not enough large va­cant spa­ces.

There were smaller spa­ces avail­able, how­ever, they were not big enough for ma­jor in­ter­na­tional brands, he said.

Re­tail­ers were drawn to the right spot, with the right amount of floor space, St Amand said.

‘‘If re­tail­ers are con­fi­dent of a lo­ca­tion, they will pay a sig­nif­i­cant pre­mium, as it will drive in store rev­enue.’’

Re­tail va­cancy rates are cur­rently sit­ting at 6 per cent, an in­crease on last year mainly due to Top­shop’s exit.

The trend of in­dus­trial sites be­ing trans­formed for large re­tail­ers is ‘‘par­tic­u­larly ev­i­dent’’ in Pe­tone, and ex­pected to be­come more com­mon in Porirua and Lower Hutt.

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