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Colliers International has just released their latest New Zealand Retail Market Indicators report.

Retail landlords’ fortunes depend largely on their tenants’ ability to run a successful retail business. This interdependence is more marked in retail than other property sectors. In some cases, particularly where the retailer is under-capitalised or occupies a secondary location, this relationship might manifest itself in a landlord’s agreement to temporary concessionary terms in an effort to keep the shop open.

The landlord is motivated by the fact that if his tenant goes under there’s not exactly a queue of replacement retailers available to take over. There has been weakness in retail sales figures for a couple of years now, more in some regions than others. Actual retail sales are still increasing in the Auckland region, albeit much more slowly than last year and retailers’ margins have dropped. Retail sales have been declining in Wellington region for nearly a year, and in Canterbury since the beginning of this year.

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