Highlighting a strong end to the year, Wellington region experienced a 16% uplift in retail spending between the 3Q18 and 4Q18 quarters. On an annual basis spending was up 3.7%.
Wellington CBD average prime gross face retail rents edged up slightly to $1,320 per sqm from $1,318 in Dec 2017. The highest increase was in Lambton Quay where average rents increased by 9.0% over the past year.
Tight retailer conditions are forecast to continue due to a reduction in the overall vacancy rate and a modest increase in total supply over the next few years. NZ owned Bargain Chemist have just leased space in Manners Street, which will assist reduce vacancy in the next half-yearly survey.
Investors are confident, but cautious. Average retail yields for CBD prime and bulk retail sectors firmed by 93 basis points and 57 basis points respectively over the past year, while the average yield for regional centres softened by 164 basis points.
Willis Bond’s redevelopment on the former Farmers building is underway and will be home to seven ground floor retailers totalling 2,250sqm with completion expected in Q1 2020.