New property and infrastructure developments unlock the central city’s retailing opportunities
Chris Dibble, Research and Communications Director at Collier International, says central to this international expansion is Precinct Properties’ $1 billion Commercial Bay shopping and commercial complex currently under development and expected to be completed in early 2020.
“Around 40 of the 120 new shops will be restaurants and dining outlets, half will be fashion, and seven retailers will be dedicated to health and beauty and service-based amenities.
“But, it is not just Commercial Bay that is attracting international retailers to Auckland, with UK branded clothing company Superdry opening its first store in Queen Street earlier this year.”
Dibble says people, position and premises are the three key drivers of this recent rise in interest from offshore brands.
“Auckland CBD’s population has grown significantly in recent years due to the boom in CBD apartments.
“With a growing number of people living in the city, not just workers, the rise in retail spending has enabled a number of retailers to explore the Auckland CBD as a more viable option.
“The rise in the number of cruise ships into Auckland has also given rise to international travellers looking for international products.”
As for position, Dibble says the supply of Auckland CBD retail stores close to transport and along the waterfront has been limited in the last couple of years as development works take place.
“The creation of almost 12,000sq m of new space to the market beside Britomart provided by Commercial Bay unlocks new opportunities.”
Likewise, the availability of international-grade retail premises has opened the gates.
“There has been a limited number of high-quality retail premises and individual shops in the Auckland CBD for international retailers.
“Britomart is an example of a precinct with international-grade premises, having attracted Tiffany & Co and Chanel amongst others.
“Commercial Bay assists with the delivery of new, high-quality retail space, but also lifts existing premises who are competing for tenants.
“New fit out activity and landlord contributions are helping to increase the overall retail offering.”
Adding to these underlying features of the market are significant infrastructure enhancements and a number of upcoming international events.
The Auckland City Rail Link (CRL), which is currently projected to cost $4.419 billion, is expected to complete by the end of 2024.
The CRL will double the capacity of rail through Britomart in peak hour and have the capacity to carry up to 54,000 passengers an hour. This will reduce travel time significantly, as well as increase the number of new opportunities for existing and new retailers with open station developments a new feature of the Auckland CBD in the future.
The Auckland CBD will also host the 36th America’s Cup and Asia Pacific Economic Conference (APEC), bringing in thousands of domestic and international tourists in 2021.
The $703 million, 85,000sq m NZ International Convention Centre is expected to complete in 2020 and attract more than 33,000 new international visitors to New Zealand annually, according to owner SkyCity Entertainment Group.
“With all this positive activity, it is easy to see why we predict further international expansion will occur in Auckland CBD, but timing will be critical,” says Dibble.
“With the best spaces being snapped up, fewer prime spots are available despite the increase in floor area. International retailers not exploring their opportunities will likely have to concede to higher rents and/or lower incentives, and may miss out altogether on finding the best spot for their international brand.”