A vacancy survey carried out by Thayer Todd Valuations has found there is 7,177 square metres of retail space available within the CBD.
Contributing to the increase is department store H & J Smith shifting its outdoor store site, but the vacancy number is still at its highest since 2003.
The two worst affected areas are Dee St, which has 22 percent of the available retail space, and the south side of Tay St.
Thayer Todd Valuations valuer Regan Johns says a number of factors have contributed to the lack of retail vacancies.
These include online shopping, lack of sufficient car parking, earthquake related issues in downtown and competition from bulk retail suppliers.
“The Invercargill CBD retail landscape is fairly similar to the residential property market. When the residential peaks, the retail market peaks,” Johns says.
“The local residential market is still subdued at present and the retail market is below that, so the shop vacancies are up.”
He says finding a solution to the problem is difficult, as there are many contributing factors.
“Landlords are awaiting further guidelines from the government over national building standards, so once a clear picture of guidelines can be provided, then landlords can act,” Johns says.
“Due to the age and value of the majority of building stock, Invercargill retail rents are not high enough for landlords to carry out improvements and get a sufficient return. Council incentives for landlords to upgrade buildings would help.”
He says car parks also need to improve, as Southlanders are “destination shoppers” who drive from shop to shop.
The Invercargill City Council is making inroads in an upgrade of the CBD, which will improve lighting and amenity areas.
“It’s a ‘Yes’ to the lighting but the jury is still out on the amenity redevelopment and how that will help retailers,” he says.
Empty shops aren’t a problem exclusive to Invercargill.
The past year has seen retailers in smaller towns hit hard by a lack of vacancies.
Blenheim has 20 empty shops sitting in its town centre, with local retailers saying business is the toughest it’s ever been.
Twenty percent of Hamilton’s ground level retail space is also empty, with local retailers saying no free parking and rising costs are to blame.
Meanwhile, in Hastings, the bleak trend continues – a recent retail occupancy survey by Logan Stone revealed the town is facing its lowest occupancy amount (86 percent) in 15 years.
Retail NZ recently launched its ‘e-Fairness’ campaign to put a halt to online shopping’s affect on Kiwi retailers, particularly in smaller towns.
General manager of public affairs Greg Harford says that the current tax loophole is threatening local town centres.