Ongoing large format retail projects across New Zealand are providing the sector with optimism that a period of growth is on the horizon.
The Maki Centre at Westgate in Auckland, that is being developed by the New Zealand Retail Property Group, is expected to offer approximately 18,000sq m of floor space and is located between Mitre 10 Mega and New Zealand’s only Costco. The development is set to begin construction and will feature the likes of Baby Bunting, JB Hi-Fi, Supercheap Auto, and Hunting & Fishing New Zealand.
Ikea’s long-awaited arrival to New Zealand will see the furniture retailer opening an approximately 34,000sq m store in Mount Wellington in late 2025. Kiwi Property are looking to develop approximately 6,500sq m of additional large format retail space adjacent to Ikea.
Further down the North Island, Bay of Plenty is home to multiple exciting projects, including another stage of development at Tauranga Crossing that will include Harvey Norman and Beds R Us, while Bay Central Shopping Centre is also set for a 3,000sq m extension.
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The Sands in Papamoa, a prominent development that is years in the making and has considerable support from the Tauranga City Council, has a proposed 26,000sq m large format retail component that will form part of the wider development.
The South Island also has notable projects in motion, including Nelson Junction, an 11,000sq m centre that has been leased by Colliers and is due for completion early next year. Westwood in Blenheim has also progressed to the final stage with approximately 5,000sq m of space due for completion in early 2025.
In Canterbury, consent was granted earlier this year for a 24,000sq m extension to Homebase shopping centre that will include a new supermarket and department store and make it the biggest large format retail site in Christchurch. Also in Christchurch, Spotlight will open their latest store at the Northwood Supa Centre.
While these projects will provide confidence to the sector, New Zealand’s retail environment has experienced challenges during the past year with inflation putting pressure on consumers against the backdrop of rising mortgage and interest rates impacting disposable incomes.
Despite those challenges, spending in the retail industries in New Zealand increased in August by 0.7 per cent compared to July, based on information from Stats NZ who track electronic spending data.
Leroy Wolland, National Director of Large Format Retail at Colliers, says centres with strong fundamentals are continuing to see positive leasing enquiries.
“The development pipeline for large format retail sites across the country remains steady and it is encouraging to see continued demand for space in areas with continued population growth such as West Auckland and Bay of Plenty,” Wolland says.
“Colliers has brokered leases for a handful of new-to-market retailers that will enter New Zealand later this year or early in 2024 and we are excited to watch their expansion.
“The general market for investment in large format retail remains strong, as evidenced by the recent sales of Westgate Lifestyle and Remarkables Park Shopping Centre in Queenstown. Both transactions were brokered either fully, or in part, by Colliers.”
James Petherick, Large Format Retail Broker at Colliers, says several regional centres in New Zealand are experiencing demand for developments but a lack of suitable sites is restricting development.
“Vacancy rates, while not officially tracked, remain incredibly low for prime spots and we are pleased to see high-profile retailers such as JB Hi-Fi and Chemist Warehouse signalling their intentions to increase their footprints,” Petherick says.
- Article supplied by Colliers
