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Auckland retail showing promising signs

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Sub-sectors of Auckland’s retail market are showing signs of growth as the industry continues its recovery following the challenges posed by the Covid-19 pandemic.

Colliers has released its latest research findings on the retail industry for the quarter ending in June, and in Auckland vacancy rates improved in the overall strip retail sector (CBD and suburban), dropping from 11.1 per cent to 10.5 per cent, while CBD strip retail vacancy has improved from 13.7 per cent to 12.4 per cent.

Filip Ograbek, Research Analyst at Colliers, says whilst landlords are offering rental incentives and fit-out contributions to attract tenants to premises where vacancy has been persistent, there are signs that face rents have stabilised across locations and sub-sectors.

“Factors such as increased net migration, wage growth, and rising tourist numbers have led to growth in the retail sector with occupiers eyeing an opportunity to secure their desired premises ahead of a shift in the market,” Ograbek says.

“While Auckland's overall retail vacancy rate remained steady at 5.1 per cent as of June, these promising developments in specific sub-sectors could form the basis of further improvements in the market for the coming year.”

The latest numbers from Stats NZ point to a surge in new arrivals to the country with a record net migration gain of 96,200 in the July 2023 year. This population growth will likely lead to further consumer demand that has a positive flow-on for the retail industry.

Nick Pettitt, Retail Leasing Broker at Colliers, says there is positive market sentiment, particularly amid occupiers who want to get ahead of the curve.

“Early adopters have taken the past six to 12 months to strategically plan their moves while surveying the market and some have identified now as being the right time to secure a new lease as they look to 2024,” Pettitt says.

“There is interest in central Auckland and some of the popular city fringe locations such as Ponsonby from international and domestic operators and that bodes well for shoppers and visitors to the area.”

Pettitt recently brokered a new lease for international skincare and cosmetics brand Aesop who have agreed to take a prominent site on Ponsonby Road that was previously occupied by Icebreaker. This will add to their footprint in the New Zealand market.

The Fresh Market, a market fruit and vegetable grocer, have taken up a 10-year lease at 205 Queen Street and will add to the revitalisation of Auckland’s premier retail strip.

“Market sentiment is certainly improving and from our conversations with prospective tenants, those who are exploring their opportunities are optimistic about the future.

“Retail spending data from Stats NZ notes a jump in electronic card transactions for August of 0.7 per cent from the previous month, which bodes well as we approach the Christmas period, and the retail sector continues to rebuild in a post-Covid environment.”

Related Experts

Filip Ograbek

Research Analyst | Research

Auckland CBD

As a Research Analyst, Filip is responsible for the undertaking of market research across the commercial and residential sectors to aid in the preparation of Colliers market-leading reports. He is responsible for the maintenance and development of core research databases, utilising these databases to provide analytical support to the organisation both internally and externally. Filip is a current student  undertaking  a Bachelor of Property, allowing him to bring a wealth of theoretical knowledge to his role. 

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Nick Pettitt

Broker | Retail Leasing

Auckland CBD

Nick joined Colliers in 2018 having spent 15 years in the retail and manufacturing sectors both in New Zealand and internationally.

Previously a sales and marketing professional for several market-leading brands, Nick is now part of the Retail Team focusing on leasing predominantly in the service, convenience and food and beverage sectors in Auckland CBD, Ponsonby as well as across New Zealand.

Nick has a strong background in customer experience and innovative digital strategy and has a particular interest in digital integration in retail environments.

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