Auckland’s CBD’s retail rent rises
Wellington’s CBD prime gross rents have also increased by five per cent, according to Colliers International Australia and New Zealand Research and Forecast Report – Retail for the first half of 2016.
Chris Dibble, director, research and consulting based in the agency’s Auckland office stated the average net prime rent for Auckland CBD retail space is now $2950 per square metre, driven up by the impact of population increases.
“By comparison, large format rents in the Auckland suburbs are typically a tenth of this cost while Wellington CBD’s average prime gross rents are at $1270 per square metre which is substantially lower than Auckland, but also on the rise,” Dibble said.
Dibble said Auckland’s and Wellington’s retail rent increase was higher than many preceding years with the double whammy of a persistently low inflation rate increasing the real rate rise, and he said this will be exacerbated as the pace of retail rents rise and inflation rates stay low.
“Underlying confidence among retailers, driven by better economic conditions, along with competition from investors is pushing up prices with higher rates of rent rises approaching,” he said.
According to Dibble, nationally, most markets are seeing rising rents for prime quality premises and a plateauing in rents for secondary quality premises. “Where population is increasing the most, is where rents are rising the most, and vice-versa.”
Dibble said in 2015, the retail sector accounted for almost a quarter of all property sales activity and this was steady across most price bands.
According to the report, a number of high profile retail property sales have settled this year or are expected to settle soon and these properties include the two former Westfield shopping centres, Zone 7 in Westgate; a half share in The Base in Te Rapa outside Hamilton; Centre Place South in Hamilton city; Shore City in Takapuna; Pukekohe Mega Centre, a national Progressive Enterprises portfolio and Papamoa’s Fashion Island in Tauranga.