- The retail sector has been significantly impacted by the trading restrictions associated with lockdowns, putting pressure on cashflows. Vacancy rates have begun to increase in response with Auckland’s overall rate rising to to 3.8% (approximately 67,000 sq m) compared to the 3.3% recorded six-months prior. Vacancy within the CBD increased from 2.1% to 2.8% an increase of 1,200 sq m of additional vacant space.
- Approximately 57,000 sq m of new retail space was added in the latest survey, marking the completion of notable developments such as Commercial Bay, bulk retailer Nido Furniture and home hardware Bunnings Westgate. Future development prospects remain muted as a result of COVID-19. Projects in planning and feasibility stages are likely to face delays until more favourable economic conditions emerge.
- International brands continue their expansion within New Zealand. Bulgari will be the latest addition to Auckland’s tightly held luxury precinct along Queen Street. Australian based sneakers store Subtype opened its first store in Newmarket. Taco Bell has also announced plans to rollout two new stores (in Auckland and Hamilton). American fast-food retailer Five Guys have announced their intention to expand into New Zealand and Australia by 2021.
- Investor interest within the retail property sector is being shaped by the performance of the various sub-sectors. Interest in large format retail and supermarkets has been heightened by their defensive investment asset characteristics. The 13,700 sq m home hardware retailer Mitre10 in New Lynn recently transacted for $32.5 million, reflecting a 4.74% yield to a local private investor.
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