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New Zealand retail property market review for 2019 and forecast for 2020

Retail property mall shopping centre woman on escalator  hero

Colliers International Research presents a three-part review of the key commercial property sectors

Physical retail stores in New Zealand capture more than 90 per cent of all retail sales, and spending continues to edge up on an annual basis. This provides a supportive base and positive outlook for retail real estate in New Zealand.

In the year to June 2019, approximately $95 billion of retail trade in ‘bricks and mortar’ properties took place. This is up almost 4 per cent compared to the previous year. The biggest winners were in non-discretionary sectors, with consumers more selective in their discretionary spend, an ongoing trend over the past decade.

2019 Retail National Review and 2020 Forecast

With a solid base in place, forecasts remain for further growth and expansion. Evidence of this is the latest medium-term employment forecasts from MBIE. The retail trade sector is forecast to grow by an additional 19,829 workers between 2018 and 2023, representing annual growth of 1.6 per cent per annum, comparable to the annual average growth for all industry groups.

The variance in retailer vacancy rates by asset type and location continues. Retail premises without a supportive retail mix in an underperforming catchment are experiencing the most testing conditions. Destination retail centres with a customer-centric strategy providing entertainment and leisure experiences continue to receive the most enquiry, no matter the location.

Nationally, consenting activity has reduced from recent highs, but the total value continues to rise. This highlights the elevation in customer requirements and the extent of works that developers and landlords face in retail. Variances between demand and supply provide the guidance for rental performance for landlords, but tenants in many precincts across the country still face annual rental rate rises. 

While investor confidence in the sector remains supportive, investment yields have firmed slightly or have been relatively flat over the past 12 months. This has not reduced the proportion of deal flow in the sector. Our analysis of commercial and industrial sales data shows purchasing interest remains strong for retail assets, with just under 30 per cent of all 2019 transactions in the retail sector. This is up slightly on previous years. With almost $1 billion in retail assets transacting in 2019 so far, and many more large retail deals to be completed, the outlook for retail investment remains solid. We forecast investors to remain vigilant in their due diligence and cautiously confident in their purchasing decisions.

Read the full series:
New Zealand industrial property market - 2019 review and 2020 forecast
New Zealand office property market - 2019 review and 2020 forecast

Read the 2019 series here:
2019 Commercial Property Review - New Zealand industrial market
2019 Commercial Property Review - New Zealand office market
2019 Commercial Property Review - New Zealand retail market

Related Experts

Chris Dibble

National Director | Colliers Partnerships, Research & Communications


Chris Dibble oversees three key business units at Colliers New Zealand - Colliers Partnerships, Research and Communications.

Colliers Partnership priorities focus on support initiatives that drive collaboration, best practice learning, cost efficiencies, and growth opportunities across the wider Colliers franchise network.

As the head of research for Colliers, Chris oversees the collaboration and delivery of award-winning research reports. He is a regular presenter and market commentator, often discussing the latest insights on current and future property trends.

Chris also leads  PR and communications for Colliers. He works with in-house and external writers to curate an audience-focused content delivery strategy. 

With over 15 years of experience and university qualifications in economics, geography, marketing and property, Chris provides a multi-disciplinary approach that assists a broad range of clients and internal stakeholders.

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Leroy Wolland

National Director | Retail Leasing


Leroy focuses on national retailers in the large format retail sector. He matches his clients’ new requirements with appropriate opportunities and helps in rationalising any sites surplus to their needs.

He takes a strategic role in advising private and institutional developers and landlords on project leasing options. He also actively helps Australian retailers identify strategic opportunities to launch their brands in the New Zealand market.

Leroy is committed to delivering results to his clients.

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