If you thought online retailing was killing the mall, think again — two New Zealand cities have featured on a new list of the world’s top 10 areas for retail rent growth.
Consultants and agents CBRE said Auckland and Wellington had some of world’s fastest growing retail rents, featuring on a global growth chart along with some of the world’s shopping capitals for the year to March, 2017.
London topped the chart with 39.1 per cent retail rent growth in the year to March, followed by St Petersburg at 15.4 per cent, Auckland and Sofia at 12.5 per cent, Dublin 10.5 per cent, Glasgow 9.4 per cent, Bratislava 9.1 per cent, Belfast 8.7 per cent, Wellington 8 per cent and Helsinki 7.8 per cent.
CBRE said strong population and tourism growth coupled with a strengthening economy was driving retail spending and drawing new shops to Auckland and Wellington.
The two cities were clear leaders in the Asia-Pacific region, outstripping Dubai and Shanghai. Sydney and Brisbane recorded no change year-over-year in super prime rents, while growth in Melbourne was only 2 per cent.
CBRE said a big reason the Kiwi rankings were strong was tourism growth and a buoyant construction sector, driving the economy and encouraging consumer spending.
Zoltan Moricz, research head, said Wellington and Auckland had a lower international brand penetration rate than other Asia-Pacific markets but were beginning to benefit from an influx of overseas retailers, which was supporting prime rent growth.
“Mature Asian markets such as Hong Kong and Singapore are concentrated due to an international brand penetration rate of circa 45 per cent, which is why we are currently seeing stores close and notable rent contraction,” Moricz said.
“However in Pacific, the international brand penetration rates remain lower with Auckland below 20 per cent so retailers are continuing with their strategic expansion, which is supporting prime rent growth.”
Tim Male, CBRE national director of retail services in New Zealand, said well-established international retailers in Australia were using that country as a springboard into New Zealand.
“The success of international retailers in Australia is giving brands the confidence to enter New Zealand due to the notable similarities between consumers and strong sales growth,” Male said.
A lack of investment into areas of the Auckland CBD as a retail destination meant supply of prime space had not been meeting demand. But the city was now starting to see reinvestment into developing prime retail precincts, Male said.
Chanel, H&M and Zara have established stores in Auckland in the past year, with plans to move into other cities.
Precinct Properties yesterday announced that most of its new shops in the Commercial Bay development would not now be open in time for next Christmas.
Big changes could also be in store on the retail scene in this country. Brokerage firm Forsyth Barr has warned that Amazon may expand into New Zealand shortly after its arrival in Australia next year, which would change the retail landscape.
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