Research underpins optimism in Christchurch CBD

Growing demand for space in the Christchurch central city has resulted in a marked decline in CBD retail and office vacancies over the past year.

Figures released at the annual Property Council Summit in Christchurch show that only 15 per cent of the stores in the retail precinct are vacant, against more than 23 per cent last year.

Of the 45,064sq m of total stock in the city core, a record 38,284sq m is leased.

Gary Sellars, a Director of Valuation and Advisory Services at Colliers International, says the Riverside Market has proved a major attraction and confidence boost for the CBD.

“Significant development has been completed and there’s been a major improvement in occupancy over the past 12 months.

“The prime Cashel Street frontages are particularly well leased and there is no vacancy onto Colombo Street in the CBD.”

Sellars says there are still some vacancies in laneways and at first floor level as people get used to a new way of doing retail.

Nick Doig, Director of Retail Leasing for Colliers, says there has certainly been significantly more retail leasing enquiry over recent months, with the Riverside Market providing a particular boost.

“We’ve noticed a major shift in interest from out of town retailers. This year we’ve signed Mi Piaci, Aotea Gifts, Decjuba, Kate Sylvester and General Pants among others.

“In addition to the opening of Riverside Market, Ballantynes has unveiled its homewares extension that really is of an international standard. It’s great news for the Christchurch CBD.”

The picture is similarly positive in CBD office vacancies. Vacancies in the overall CBD have reduced by 3.1 per cent to 16.9 per cent with a noticeable improvement in the inner core area which have declined 5.6 per cent to 19.9 per cent.

Historically, in comparison, the lowest vacancy recorded in the Christchurch CBD was 10.6 per cent in 2005, and immediately pre earthquakes in 2010 vacancies were 14.3 per cent.

Only 1,452sq m of CBD office space is currently under construction against 142,507sq m in 2015. This demonstrates developers have responded to the supply/demand imbalance that rapidly occurred following the major rebuild of office accommodation.

Sellars says: “There’s a promising occupancy improvement in the CBD and leasing options are more limited in preferred locations. Businesses are continuing to relocate from the suburbs and we’ve also seen an internal CBD churn of tenants.”

Demand from North Island syndicates and overseas investors remains strong, particularly in the industrial investment market, with limited stock availability.