Buoyed by an almost 50% increase over spending in the first quarter of 2022, according to the latest Heart of the City figures, retail operators are now having to compete to secure prime locations in the CBD.
JLL NZ’s Head of Retail Leasing and Metro Sales, Nilesh Patel, says premium and luxury spaces, particularly those close to the waterfront at the lower end of Queen Street, have been in most demand so far in 2023, with a number of high-profile tenants securing prime sites since the beginning of the year.
“Retail was hit as hard as any sector by the pandemic, and this strong competition for space as it comes to market is a clear indicator of the sector’s return to health,” says Patel.
“The return of tourists, cruise ships, international students and office workers have increased foot traffic through the CBD, while initiatives such as the pedestrianisation of Queen Street have created a more human-centric environment in the city centre that supports retail and hospitality investment.”
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Heart of the City Chief Executive Viv Beck says she’s pleased to see ‘leased’ signs appearing on retail sites across the city, on the back of increased domestic and international activity and in anticipation of significant infrastructure additions.
“Our March quarter results show spend had returned to 82% of 2019, with 27% of this coming from international visitors. Fridays and Saturdays are our busiest days of the week, which illustrates an increasing role of city centres internationally as a place to come for recreational experiences.”
“With the completion of both the City Rail Link and the NZ International Convention Centre in closer sight, ongoing public and private investment signals confidence in the future as the city centre reshapes as a place to connect for business, entertainment, learning, and living.”
Patel says the City Rail Link in particular, which is expected to be completed by the end of 2025 with passenger trains running in 2026, is driving interest in mid-town retail and hospitality opportunities to capitalise on the green shoots of recovery already evident through increased foot traffic and spend.
“Karanga-a-hape and Te Waihorotiu (Aotea) stations are critical points for pedestrian flow to support retail further uptown. Landlords are already starting to structure short-term leases to take advantage of the CRL when it opens – and astute tenants seeking favourable rates in a high growth area are knocking on the door right now.”
“With rising food costs, wage increases, and employee shortages, hospitality continues to face challenges. However, experienced hospitality employees have taken advantage of this to set up new businesses without the financial burden of taking over a bare shell.”
- Article supplied by JLL
