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Weak retail spending hasn’t yet dampened retailers’ enthusiasm for shops in the well-established prime locations in Wellington CBD, where vacancies continue to trend down, in most precincts at least. Margins however continue to be squeezed and retail categories linked to the household sector are under particular pressure.

Meanwhile the CBD office market in the capital can’t defy market pressures any longer, and is showing increased vacancy levels.

Our mid-year vacancy surveys have been completed in Wellington. The retail chart to the right shows contrasting fortunes in Wellington’s retail precincts. The establishment, represented by Lambton Quay, is powering through the recession, recording substantially reduced vacancy over the past year, while the fortunes of the brash new kid on the block, Courtenay Place, are going in the opposite direction, with vacancy now exceeding 10%. Wellington is hosting seven Rugby World Cup matches in 2011. This may stimulate demand for retail outlets from the hospitality sector in and around Courtenay Place, at least in the short term.

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