Auckland CBD retail vacancy rate creeps down

Auckland’s overall retail vacancy rate remained flat at 5.1 per cent as of June 23, according to a report by real estate investment management company Colliers.

However, the CBD strip retail vacancy rate improved, decreasing from 13.7 per cent to 12.4 per cent, driven by an influx of net migration, wage growth, and a rising number of tourists.

Rental rates were relatively consistent across locations and sub-sectors over the past six months, while incentives are increasingly offered to encourage tenants. 

Operating costs have faced rising pressure due to inflation, prompting landlords to decide whether to accept static rates or hold out for improved market conditions.

A handful of sales indicate yields are still softening, and this trend is expected to continue.

The report identified a landscape of varied demand, dormant rental rates, elevated incentive levels, and increased debt costs as key headwinds for the sector.

However, it added positive sentiment is returning, signalling a potential rebound and stronger conditions in 2024.

Earlier story: Retail rents are on the rise across city CBDs.

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