In recent years, international luxury brands – such as Prada and Gucci – have made their presence felt by opening store in the downtown end of Queen St. Hugo Boss, Chanel and Tiffany & Co. have also shown interest in the CBD, as has fast fashion giant Topshop.
“Auckland’s maturing critical mass means that the CBD is increasingly being recognised as a destination by international luxury and fast fashion retailers,” says Grant Unsworth, CBRE New Zealand’s national director.
Unsworth says retailers were initially put off the CBD since the available stores were unsuitable. He says the locations were usually not the required size, were poorly configured, and lacked adequate street frontage.
“Then, as a number of spaces became available more recently, multiple bidders have fought to secure them.”
These stores arrive as more people move into the central city to work and live. The 2013 census showed a 44 percent increase in people living in the CBD, while between 2010 and 2015 saw total employment in the CBD increase by 15 percent.
“There is a growing office development pipeline to cater for employment growth and with much of this due for completion in the short term, CBD-based employment is also set to continue its important role in underpinning the retailing environment in the city,” says Tim Wiles, CBRE New Zealand’s research manager. “These increases have driven a corresponding lift in the volume of pedestrian flows, which is supporting the commercial viability of standalone flagship stores in prime locations.”
Another factor in the increase of retail stores in the CBD is the increase in international visitors. The number of tourist has increased by 8.5 percent in the third quarter of 2015, and the number of Chinese visitors has increased by 35 percent.
“Chinese nationals are among the world’s largest consumers of personal luxury goods,” says Unsworth. “They are a key target market for luxury brand retailers, who are willing and able to pay comparatively higher rentals to secure absolute prime retail premises.”