Close
 

Mall metamorphosis

  • Property
  • January 28, 2016
  • Justin Kean
Mall metamorphosis
Kerryn Smith

This new retail mall space is coming down the supply pipeline in the form of new integrated retail, as well as extensions to already dominant retail malls. After what has been a seven year lull in supply to Auckland’s retail mall sector, the market will see a huge tranche of retail floor space coming online over the next five years.

The completion of Westfield Albany in 2008 was the last major addition of significant retail floor space to the Auckland mall stock base. Between mid-year 2015 and 2020, total additions to space will likely equate to a further 140,000 square metres of integrated retail; a figure that is warranted by Auckland’s buoyant market, increasing demand for retailers and sound economic story.

There are two key factors that drive the development of new retail space: firstly, confidence in the underlying market and secondly, the availability of capital to undertake the development. Retail assets in the form of shopping malls and other large formats are now at the forefront of investors’ minds, which has resulted in an all-time high for transaction activity in the sector. The continued sound performance of large retail shopping centres that are able to dominate their catchment and deliver sustained income streams has encouraged intense competition for investment grade product. Sovereign wealth funds, pension funds, and high net worth individuals with excess capital have invested in the retail space, and are likely to continue to do so through 2016.

Funding for a large quantity of these new retail mall developments that are coming into play is being sourced from institutional or international capital. Singaporean sovereign fund GIC, for example, is funding Scentre Group, which is likely to be pursuing extensions at Westfield 277 Newmarket and Westfield Albany. Precinct, one of New Zealand’s listed property investors, is funding Downtown Shopping Centre and Canadian pension fund PSP Investments are likely to be behind any further expansion at Bayfair Shopping Centre. The underlying story is that each of these organisations have sizeable capital resources to spend.

From 2015 to 2020, large additions to retail will total 140,000 square metres, against a total supply of 1.185 million square metres. This indicates that total integrated retail space is anticipated to grow between 10 and 12 percent from 2008 to 2020. This is unlikely to create an oversupply situation. However, over a similar timeframe (2006 to 2023) Auckland’s population is anticipated to grow some 28.7 percent. This means the market growth is there to support this expansion of retail. We require this new retail space to not only meet demand of Auckland’s mushrooming population growth, but to also allow international retailers and brands to enter the New Zealand market.

International retailers coming into New Zealand need modern and often speculative build space in order to accommodate their very specific needs. Within the Auckland market, we don’t currently boast the type of retail space international retailers require on mass. The announcement of fashion giant H&M opening their first store in Sylvia Park is a really good example of how international retailers will only come in to New Zealand when they’ve got the appropriate space to occupy.

This year we have seen a range of new international retailer entrants to the market with the opening of David Jones, French Connection, Topshop, Tiffany & Co and Chanel, and this is probably just the tip of the iceberg.

The outlook therefore remains positive for the retail sector, as there’s a significant supply pipeline being met by a long-term growth story, as well as a solid level of demand from exacting international retailers who will only put their brands into the very best space.

This content originally appeared in the December 2015/January 2016 issue of NZRetail magazine.

​ ​

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

 

Regional rollercoaster: Selling to the Kardashians from Matiere

  • News
  • April 24, 2019
  • Rachel Helyer Donaldson
Regional rollercoaster: Selling to the Kardashians from Matiere

In the final article from NZ Retail magazine's nine-part series on regional retail, we're sharing the amazing story of how SME retailer Solvej Swings got its product into the home of one of the world's most influential consumers.

Read more
 
 

Regional rollercoaster: Arrowtown

  • News
  • April 24, 2019
  • Rachel Helyer Donaldson
Regional rollercoaster: Arrowtown

We're examining seven regional towns as part of a wider series. This time, it's Arrowtown under the microscope.

Read more
 
 

Regional rollercoaster: Greymouth

  • News
  • April 24, 2019
  • Rachel Helyer Donaldson
Regional rollercoaster: Greymouth

How are retailers in Greymouth adapting to our dynamic business environment? As part of a nine-part series, we took a look.

Read more
 

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

 
topics
Regional rollercoaster
What does retail look like in 2019 for ...
Concept to closet
Business coverage of New Zealand Fashion Week.
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
The future is bright
We spoke with four retailers in their twenties ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Sisterhood
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 

Regional rollercoaster: Kaikoura

  • News
  • April 24, 2019
  • Rachel Helyer Donaldson
Regional rollercoaster: Kaikoura

As part of a series on regional retail, we examined seven towns to learn what makes some thrive and some dive. This article focuses on Kaikoura.

Read more
 
 

Regional rollercoaster: Bulls

  • News
  • April 23, 2019
  • Rachel Helyer Donaldson
Regional rollercoaster: Bulls

What does retail look like in 2019 for retailers in Bulls? We examined this regional centre as part of a wider series.

Read more
 

Regional rollercoaster: New Plymouth

  • News
  • April 23, 2019
  • Rachel Helyer Donaldson
Regional rollercoaster: New Plymouth

Why are some Kiwi retailers struggling in New Zealand's regions and some thriving? We put seven regional centres under the microscope to find out. This time, we're looking at New Plymouth.

Read more
 
Next page
Results for
Topics
Jobs
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email anita.hayhoe@icg.co.nz or call 022 639 3004

View Media Kit

}