Business conditions and economic activity in Rotorua are set to increase this year but, with the bulk of this activity expected in the fringe areas, revitalising the central business district back to its former glory will take priority according to new research.
Analysis from real estate agency Bayleys has revealed confidence levels are high among local businesses, with owners expecting increases in profits and in turn to be able to employ more staff and invest in their businesses in the year to December 2015.
“However, this activity is predominantly in the fringe areas of the city, which are experiencing greater activity than the CBD. The trend is due to a sharp contrast between prime and secondary property, with a key issue being the older stock located in the CBD requiring upgrading and seismic strengthening,” says Bayleys Research national manager, Ian Little.
“A further hindrance for the city centre is approximately 10 to 15 per cent of the CBD retail is made up of leasehold properties, which are causing problems with vacancies and maintenance.”
In contrast, new freehold retail offerings at the Redwoods Centre and Fairy Springs suburban outlets, developed and built by local developer TPB Properties, have received strong demand from local and out of town investors.
“With the successful sell down of new units within the suburban areas, there is now a shortage of high-quality, new retail outlets for investors given that much of the CBD stock is older and of lower quality.”
Rotorua Central Mall and Tutanekai St remain the prime retail shopping areas in the CBD as they have the highest pedestrian counts in this area. The mall has been redeveloped and has the lowest vacancy rate in the CBD, along with Eat Streat at the northern end of Tutanekai St and surrounding the Rotorua Tourism Centre on Fenton St.
Rotorua District Council (RDC) is looking at a number of initiatives in its revitalisation strategy design to attract visitors and shoppers back to the CBD, including a proposed green corridor which will link to multiple-use bike paths through the CBD.
“There is no quick fix – council plans to rejuvenate the CBD will take time to generate results,’’ says Little.
“Ultimately, a more vibrant and rejuvenated CBD will attract more businesses and workers and lead to increased retail spend.”