Auckland’s GDP grew by 3.4 percent in the year to March 2015, while the country’s overall GDP grew by 3.6 percent.
Wellington mayor Celia Wade-Brown says a number of new buildings like No.1 Market Lane and heritage transformation projects like the Manthel Building show there is strong confidence in the CBD.
“Our CBD is the most compact and vibrant cosmopolitan centre in the country,” she said.
Councillor Jo Coughlan says the council has invested millions to improve the quality of public spaces within the CBD.
“As a result, people are telling us that the CBD service and retail economy is really healthy – it’s a big step up from the relatively tough times during the GFC,” Coughlan says.
Several new hospitality and retail stores are due to open in the coming months, including RM Williams, David Jones and Best Ugly Bagels.
The World of WearableArt (WOW) Awards held in September and October is also expected to be a lucrative affair for local businesses, pumping $30 million into Wellington’s economy.
A big chunk of this will go towards retail spending, with some retailers saying at an OurCBD meeting the sales revenue made from WOW surpassed consumers’ Christmas spending.
Retailers have agreed to get on board with the event by going along with a ‘sparkle’ theme.
Commercial real estate company CBRE reported a lack of prime retail space is also driving demand for secondary locations within the CBD.
“Prime CBD rents rose significantly in 2015. Secondary rent growth was stable in 2015, but growth is expected in 2016. There are several retail developments and refurbishments in the pipeline, including the development of the Cuba Dixon Precinct, and the refurbishment of David Jones on Lambton Quay,” it said.
Yields on prime retail properties had also firmed up due to interest from large international and national retailers, like David Jones and Topshop.
Wellington is increasingly being seen as an attractive investment location for commercial properties, CBRE said.
CBRE Wellington managing director Matthew St Amand said that the investment market is at its most buoyant level in a decade and has surpassed pre-GFC peaks.
“This is creating buyer confidence with parties who would previously only consider Auckland for a New Zealand asset,” Amand said.