Retail development took a big hit after 2007 – the recession, and the spectre of online shopping, were major culprits. However, developers have been wiping the dust off their old plans and getting things moving. The next twelve months will see a number of new centres opening, the biggest expansion since the GFC.
In Auckland, the list of openings includes:
- More than 40,000 m2 of space at Westgate, including NorthWest Shopping Centre and large format shops
- A Countdown supermarket and shops in Hobsonville
- A Pak ‘N Save supermarket and shops in Flat Bush, the first stages of the Ormiston Town Centre.
In Christchurch, the list includes:
- Spitfire Square (Countdown opened earlier this month, with other shops to follow)
- The Landing, Wigram (New World opens in September, with other shops to follow)
- Stage one of the BNZ Centre (aka Cashel Square)
Elsewhere in the country, stage one of Tauranga Crossing (Tauriko) will open with 18,000 m2 of mainly large format shops. In Queenstown, the Five Mile centre and other developments around Frankton will add at least 20,000m2 of space in the next year.
That’s a reasonable list, and it includes the first “new build” regional mall since Westfield Albany opened in 2007. Apart from that, though, most of what we’re seeing is small supermarket-based centres, and large format centres. There’s still no sign that there will be a return to the expansion models of the 1990s and 2000s.
With ongoing population growth, and some niches emerging, there will be more opportunities for retail – but with fewer new centres than last decade. And if the economics of new malls don’t stack up, could we see renewed interest in the “high street”?
As retail changes, other sectors are going through their own transformations. Retirement villages continue to come into their own. Office space is highly sought after in Auckland. Housing construction is picking up in many places, and tourism is lifting the economy in some areas. Dairy farms are struggling. The lower dollar is bad for retail, but good for tourism and industry.
As these changes wind their way through the economy, different sectors will fall in and out of favour. Savvy developers will pick up on these trends, and act on them before others do.
With a Masters of Commerce degree in economics, John Polkinghorne is a property professional with vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy and analysis including location strategies to many New Zealand property owners, developers and city councils.