CBDs are important to New Zealand towns. This is the view of Paul Keane, executive chairman of property, design and research specialist agency, RCG. Two issues have been in the media recently, ie the challenge faced by the Hamilton City Council in the wake of a declining CBD, and the development of the CBD in Christchurch in the aftermath of the earthquakes. The two cities have similarities, and there are further predicaments in cities and towns across NZ. “What makes a CBD is people and c
ommercial activity of all shapes and sizes, not just retail outlets,” says Keane.
“In fact, retail in CBDs is not nearly as important as it used to be.
“In days past, people visited the CBD to do business with key players like banks, accountants or lawyers. This is no longer the case as these services are not as dependent on having a CBD presence. Instead their choice of location is driven by demand and access. Online activity has had a major impact on those drivers; the need to physically visit a bank or lawyer to do business has decreased dramatically. For that matter, the personalities are not the same. Bankers and lawyers no longer wear ties or formal attire, they look like anybody else, so everything has changed.”
Keane explains that both Hamilton and Christchurch are going to find it hard to resurrect their respective CBDs, but for different reasons.
“In Hamilton, commercial occupants have fled to the fringe areas of the city. Why should they come back and what is the motivation for them to do so? There is little motivation, and it is unlikely to see any resurgence anytime soon. The sell down of the Centre Place shopping centre, currently owned by Kiwi Property Group, will have a serious long-term impact on the CBD as a new owner will have their work cut out to make the development profitable and retention will be the key. Not easy as we suspect the horse has bolted!” Keane points out.
“Christchurch effectively has greenfield CBD offerings available, and commercial and retail tenants are being encouraged to return. All of course based on the potential for success. The government is assisting, with the introduction of government offices being built to accommodate vast numbers of employees. The challenge for occupants, however, will be the support of new retail environments beyond the area settled by traditional retailers such as Ballantynes, which maintained its position and continues to trade very well. Driving around the Christchurch CBD remains a serious lesson in geography as to ‘where am I now’ given the empty sites that still remain. Trusted locations like the Cathedral and the ex-BNZ building are dilapidated shapes ready for demolition at best.”
Keane queries whether we need these CBDs. His answer is “absolutely” as they are the key to any city heart and produce the culture of a living city.
“There was also discussion about the collapse of the Rotorua CBD. We cannot fathom this. The city has added about 55,000sqm of new retail space to its CBD through Rotorua Central, a modern retailing environment,” says Keane.
“It may be that existing owners of buildings have failed to see the benefit of refurbishing in an effort to retain tenants. We suspect that this is the real issue for faltering CBDs. A good example is the replacement of Kirks in Wellington with David Jones. Just imagine what may have happened to that space if DJs had not come to town!
“There certainly is a lesson here in that CBDs cannot afford to let the grass grow under their feet. They are an important part of everyday life and should be constantly resuscitated, to ensure longevity.
“For more on this subject, take a look at this excellent report by the Future Spaces Foundation on the similar challenges that UK high streets are facing.”
Nerine Zoio: nerine@insideretail.co.nz