Convenience stores, souvenir shops and discount outlets are among the retailers disappearing from the CBD, as demand grows higher and vacancies grow lower. Colliers International says the low availability of stores and arrival of bigger chains is causing these low-end stores to become scarcer.rn
Colliers retail leasing associate director Nilesh Patel says Queen St in particular is at the forefront of this trend.
“For example, Global Culture have taken the former City Convenience store and Istanbul Kebab stores at 94 Queen St and telecommunications giant Spark is now trading out of the former Fix Convenience Store on the corner of Queen St and Wyndham St,” Patel says.
The demand from international and New Zealand brands was giving landlords the ability to increase their rents.
As well as this, vacancy rates have hit record lows. Colliers research shows vacancy in CBD retail leasing is sitting at 2.5 percent.
This demand relates to an increase in tourism in the New Zealand market.
In 2010, 89,596 international tourists visited New Zealand. This increased to 104,418 in 2015.
“Tourism New Zealand anticipated that the 2015-16 season would welcome 127 cruises, with the economic impact to New Zealand forecast to be $543 million – and the Auckland City Centre is one of the main docking points,” Patel says.
He says global brands are taking notice of the increased diversity of Auckland, and the CBD streets are starting to reflect more of an international flavour.
“Auckland really is starting to feel like a global city – alongside the likes of Sydney and Melbourne.”
Demand may be incredibly high, but Patel says more opportunities will arise for leases in the future when leases come to an end.
There’s also significant developments underway, like Precinct Properties’ shopping development.
It’s expected the centre will house 100 retailers across 18,000 square metres.
Tenants in the current downtown mall have been given notice and construction is due to start soon.
Patel says the Precinct Properties’ development will give new retailers a chance to get into the CBD.
“A key benefit to the mall closing is the opportunity for new entrants in the Auckland market to establish themselves within the city.”