Retail spending in the Wellington region increased further over the past year, with quarter two yearon-year growth up 2.6 per cent. Retail spending has grown consistently year on year since 2011.
Wellington CBD prime average gross face retail rents continue to increase modestly, reaching $1,349 per sqm, up from $1,318 per sqm in June 2018. Average Lambton Quay rents are higher than these ranges and increased further, up an average five per cent over the past year.
Approximately five per cent of total retail stock is currently under construction due to seismic strengthening and refurbishment programmes. Limited new supply will assist with the balance between demand and supply in the future.
High levels of tenant demand and a relatively static supply pipeline is pushing down vacancy rates. Wellington’s Golden Mile is experiencing a 9 year low with a vacancy rate of 4.1 per cent, down from 6.8 per cent a year ago.
Competition for prime retail space in Wellington remains high. CBD Prime retail capital values have increased by four per cent over the past year. This is due to a slight increase in rents and firming yields, likely to be the result of lower interest rates.