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Retailers struggle in Hawke’s Bay while horticulture booms

  • Property
  • September 17, 2015
  • Elly Strang
Retailers struggle in Hawke’s Bay while horticulture booms

The situation in Hawke’s Bay is described as a ‘boom or bust’ scenario, as infrastructure is being expanded to accommodate a horticulture, viticulture and pip-fruit export boom.

Unlike many regional areas of New Zealand that are suffering due to the drop in dairy prices, Hawke’s Bay is buoyed by its other exports.

Exports in primary produce were up 16 percent in the year ended March 2015.

Container volume growth for the Port of Napier is also predicted to grow 20 percent over this coming year.

Bayleys research senior analyst Goran Ujdur says the region is major producer and exporter of primary products like beef, lamb, fruit, vegetables and wine.

“A standout performer in the industrial sector has been the construction of new cool store and pack-house facilities supporting the growth and expansion in the horticulture sector,” Ujdur says.

“Demand for further storage and logistics related facilities is expected to continue to grow.”

He says this is shown through companies like Tomoana Food Hub, an industrial food park on Heretaunga Plains, planning on building more than 100,00 square metres of factory space for food companies.

However, this boom isn’t trickling down into the retail sector in the region.

The CBD property situation is bleak and there are high vacancy rates in poorer quality locations, Udjur says.

“Reflecting the challenging conditions for traditional CBD retailers, Napier prime retail rents have remained flat over the last 12 months – with little growth expected over the next year,” Ujdur says.

As for Hastings, prime and secondary retail rents have dropped over the last year, he says.

“Further retail closures are expected, and with weak retail demand, shop vacancy rates are unlikely to show any significant improvement any time soon.”



This bleak situation is what Infometrics senior economist Benje Patterson says is a “two speed economy”.

He says rural regions are experiencing a very different retail market to bigger cities.

“Regional New Zealand is arguably slowing down a gear, while cities exposed to service sector are humming along quite nicely, booming from tourism, migration,” he says.

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