Retail vacancy rates fell across most key precincts in Auckland and Wellington in the first half of this year, according to Colliers.
Auckland recorded a sharper decline in strip retail vacancy, while Wellington saw a smaller fall in overall vacancy amid economic and public-sector pressures.
In Auckland, strip retail vacancy fell to 6.8 per cent in June, from 7.5 per cent six months earlier and 10.5 per cent a year earlier. CBD strip vacancy dropped to 8.2 per cent, its lowest level since 2020, down from 11 per cent a year earlier.
Improved occupancy along parts of Queen Street and leasing activity in the city centre contributed to the decline. The City Rail Link opened in September and is expected to support retail activity in the CBD.
In Wellington, overall retail vacancy fell to 9.1 per cent in June, from 9.4 per cent six months earlier and 9.7 per cent a year earlier. The rate remained above its historical average. Occupancy improved in the CBD Core and along Willis Street, although leasing demand remained weak.
In Auckland, prime CBD net rents rose 2.2 per cent over the year to June, reaching $3475 per sqm. Luxury retailers continued to support demand in the lower Queen Street precinct. Regional centre and bulk retail net rents remained unchanged at $1150 and $375 per sqm, respectively.
In Wellington, prime CBD gross rents rose 1.2 per cent in the first half of this year to $1266 per sqm, reflecting demand for space in key retail precincts. Regional centre and bulk retail gross rents remained unchanged at $1080 and $318 per sqm, respectively.
Development activity remained limited, with investment focused on refurbishment and selected growth areas. In Auckland, projects include developments in Westgate and Drury, alongside CBD upgrades.
In Wellington, activity includes retail precinct improvements, public-space upgrades and seismic strengthening, with The Court among the projects identified by Colliers. Elevated construction costs continue to constrain new supply.
Retail yields remained unchanged in the first half of this year. Prime CBD yields stood at 6.5 per cent in Auckland and 6.8 per cent in Wellington.
Regional centre yields were 7 per cent and 8 per cent, respectively, while bulk retail yields were 6.8 per cent in Auckland and 7.8 per cent in Wellington.
