fbpx
HomeNEWSThe cities that will be star performers in retail property for 2016

The cities that will be star performers in retail property for 2016

This year is set to be a huge year for the retail property sector in New Zealand, with developments underway and new players entering the game. We talk to Bayleys director of commercial, retail and operations Lloyd Budd about the unexpected star performers, and what city’s retail sector is going to change the most. rn

In 2015, New Zealand’s retail property sector boomed in the cities. A raft of big international names entered the country for the first time, beginning with Topshop in March, and then following on with David Jones, H&M and Zara’s announcements.

rnrn

rnrn

Recap our coverage of this in our Here Comes the Giants series.
rn
rnAs well as this, a series of significant developments were announced in the major cities.

rnrn

rnrn

These included Precinct Properties’ downtown Commercial Bay development in Auckland, David Jones moving into Kirkcaldie & Stains in Wellington and The Crossing in Christchurch.

rnrn

rnrn

So, what could happen in 2016 that could possibly top a year like that?

rnrn

rnrn

Bayleys’ Budd says the momentum built up last year will continue into this one.

rnrn

rnrn

For one, the influx of international brands coming to New Zealand is expected to continue.

rnrn

rnrn

Bayleys is in talks with several brands that don’t have a presence here who are looking for space, he says.

rnrn

rnrn

The poor dairy payouts will continue to impact on rural areas, with towns that are reliant on dairying and agriculture expected to find trading tough, he says.

rnrn

rnrn

But there has also been a shift in areas that are popular for retail property, with the usual suspects making room for some unexpected star performers.

rnrn

rnrn

Case in point: Budd’s pick for the hottest area for retail property in 2016 is not Auckland, Wellington or Christchurch. It’s Queenstown.

rnrn

rnrn

“I’d love to have the magical answer as to why, we’re trying to find out ourselves. Every retailer wants to be there,” he says.

rnrn

rnrn

More than 30 new shops and cafes have opened their doors in Queenstown in the past year, while the first stage of the Five Mile Retail Centre opened on Labour weekend.

rnrn

rnrn

Progressive Enterprises opened its new Countdown supermarket at the Five Mile Retail Centre and the store has exceeded expectations from day one, Budd says, while more brands are going to announce Queenstown stores in the next few weeks.

rnrn

rnrn

A $40 million ‘Top of High Street’ commercial development is also being pushed ahead by Remarkables Park, which opened The Landing retail complex in 2015.

rnrn

rnrn

Statistics New Zealand has projected that the Queenstown-Lakes district will have one of the biggest population growths in the country, increasing by 1.8 percent by 2028.

rnrn

rnrn

Budd puts down the popularity of the town down to additional flights to Queenstown being introduced, as well as tourism booming and more people visiting the area.

rnrn

rnrn

The town has become exceedingly busy, he says.

rnrn

rnrn

 “They are now having traffic jams in Queenstown.”

rnrn

rnrn

Budd also says Tauranga is a city that’s worth keeping an eye on this year.
rn
rn

rnrn

rnrn

There is huge population growth occurring in Tauranga, with Statistics New Zealand projecting the population to grow by 1.2 percent by 2028.

rnrn

rnrn

The Bay of Plenty also has the highest levels of annual employment growth in the country (13 percent) beating the likes of Auckland and Waikato.

rnrn

rnrn

These trends are in part being driven by Aucklanders relocating to the Bay of Plenty to buy a house and chase employment opportunities as the Auckland housing market soars.

rnrn

rnrn

Budd says Tauranga has become a beneficiary of Auckland’s housing growth.

rnrn

rnrn

“You have a sophisticated, wealthy buyer that’s relocating to Tauranga and creating jobs and creating retail demand,” he says.

rnrn

rnrn

“They have an acquired taste – they like what they like in Auckland – good service, good food – and they want more of those offers from where they’re moving to.”

rnrn

rnrn

Budd says the area where retail property is going to change the most over the course in 2016 is downtown Auckland.

rnrn

rnrn

The closing of the downtown centre, the development of Commercial Bay and the development of the City Rail Link (CRL) is going to cause major disruption, he says.

rnrn

rnrn

The CRL is expected to be open by 2021 and will connect Britomart with new stations near Aotoea Square, Karangahape Rd and a redeveloped station at Mount Eden.

rnrn

rnrn

“It’s going to be extremely disruptive to consumers. You think of tourists arriving on boats – they’re not going have that amenity on their doorstep for the next few years, so they’ll disperse around downtown to find amenities,” Budd says.

rnrn

rnrn

But that disruption could lead to revenue doubling for retailers placed in advantageous positions in the bottom of the CBD.

rnrn

rnrn

“This will be a significant benefit for those retailers that are still trading as the demand is not going away and with downtown closing. Britomart, lower Queen St and in and around viaduct area going to be the natural beneficiaries of tourists coming in,” he says.

rnrn

rnrn

rnrn

rnrn

rnrn

rn

Rate This Article: