Regional shopping centres boom, as CBD retail falters

  • Property
  • June 10, 2015
  • Elly Strang
Regional shopping centres boom, as CBD retail falters

Invercargill, Blenheim and Hastings have all reported record numbers of low CBD shop occupancies.

Now, Bayley’s research has found Tauranga and Hamilton are experiencing similar problems.

It found there has been a major migration of shops out of Tauranga’s city centre and vacancies have become increasingly visible.

Bayleys research national manager Ian Little says retail occupancy in the city has changed significantly since 2011.

“This is being reflected in softer retail rents in the central business district,” Little says.

He says no seismic strengthening of CBD buildings has happened yet either.

In comparison, Mount Maunganui’s core shopping strip was doing well.

This was a reflection of the growing number of cruise ships docking in Tauranga and pouring straight into Mount Maunganui’s main shopping district, Bayleys says.

Mount Maunganui’s shops also have the advantage of being surrounded by hotels and a five-minute walk from the beach, which booms in the summertime.

Further down the line, Papamoa’s shopping plaza and new shopping subdivision, which are in the middle of its residential suburbs are performing strongly.

In Hamilton, the considerable success of The Base shopping precinct in Te Awa has impacted on Hamilton CBD’s retail district.

As Hamilton’s northern population on the cusp of Auckland grows, its CBD is suffering.

The CBD’s biggest mall, Centre Place, was doing well after a $36 million upgrade in 2014.

Street rental levels nearby hadn’t fared as well in the bleak retail atmosphere.

Strategic economist and RCG associate director John Polkinghorne says one the factors driving people away from shopping at CBDs is locality and convenience.

He says there needs to be a parking strategy in place for CBDs, as street parking is often paid parking, while malls usually have free parking.

“People are often time poor and they don't want to have to go for a long drive and look for a park just to get their basic shopping, so they go somewhere that's close to home and easy to get to hand has straightforward parking,” Polkinghorne says.

As well as this, he says earthquake prone buildings are an issue in a lot of the cities where the CBDs are declining.

Losing foot traffic when offices move away from the CBD is also an issue.

“Cities like Hamilton and Tauranga, and various others, have struggled with new office buildings going out in the suburbs instead of the CBD,” Polkinghorne says.

“Councils need to make it easier to develop in the CBD – simplifying regulations, reducing development contributions, or other incentives.”

He says some retail spaces are outdated and don’t fit modern retail requirements.

RCG has done work in Rotorua where shop sizes and layouts reflected what was popular in the 1960s or 1970s, not current times, he says.

He says the most important thing to revive the CBDs is to get people there in any way possible, like community events and activities.

Like other regional towns, there are council plans to rejuvenate Hamilton and Tauranga’s CBD.

The Hamilton Council has proposed plans to rejuvenate the CBD by creating a stronger connection to the Waikato River.

For Tauranga, the council is considering increasing the existing CBD carparks from 3400 to 4050 with a $25 million car park.

There are also new office spaces going into the CBD that will increase foot traffic.

Polkinghorne says while there are definitely improvements that can be made, it’s important to note there’s limited retail growth in regional areas.

“There’s not a lot of population increase and consumers’ wallets are staying shut,” he says.

However, he says this will change over time as smaller cities grow with immigrants and people moving within the country and out of Auckland.

​ ​

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