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WELLINGTON RETAIL REPORT 2010

CBD VACANCY GOLDEN OPPORTUNITY

Overall the rate of vacancy in Wellington’s CBD retail sector has shown some recovery over the 12 months to the latest Bayleys Research survey from the depths of recession in 2009. In the 2010 survey, 4.8% of retail space in the CBD was vacant, showing an almost two percentage point reduction over the year.

Unlike a lot of centres throughout the country, where temporary businesses on short term leases are becoming ever-present, the reduction in vacancy in Wellington’s CBD is largely due to long term leases being signed by opportunist retailers securing space in prime areas with significant pedestrian flow, particularly in location where, historically, it has been difficult to obtain space.

 

 

Courtenay Precinct

Vacancy in the Courtenay precinct has shown continual increases over the last two years, as monitored in the Bayleys Research Wellington retail vacancy survey. Currently at 11.0%, the Courtenay precinct experienced a big jump in vacancy over the last 12 months in particular from 4.6% in 2009.

A large proportion of vacancy recorded in the precinct was in the Courtenay Central Cinema complex. The majority of this was towards the rear of the complex, further from the entrance. There were some vacant units apparent on Courtenay Place at the time of surveying, although most of these were situated on the southern side of the road.

Cuba Precinct

After a large jump in 2009, retail vacancy in the Cuba precinct has reduced markedly in the last 12 months to 1.7% - the lowest vacancy rate across the CBD retail precincts recorded in the 2010 Bayleys Research survey. The core of Cuba precinct, which includes Manners and Cuba Malls, tends to be very tightly held areas, in terms of retail units given the high levels of pedestrian traffic these thoroughfares attract.

The major reason for the large reduction in vacancy in the Cuba precinct over the last 12 months was the removal of a vast proportion of vacant space for redevelopment in the James Smith Corner arcade. That, which was 40% vacant in 2009, is undergoing an extensive upgrade and all of the units which were available for lease have been removed from the survey due to refurbishment.

 

 

Lambton Precinct

The Lambton precinct has been the pre-eminent retail precinct in the Capital for many years and this status is expected to be retained into the foreseeable future. Lambton Quay is a well laid out, pedestrian friendly retail strip, which attracts a vast number of shoppers – both during the week, with workers from the towers above, to the weekend as a destination shopping area.

As a result of its popularity retail vacancy in the Lambton precinct has recovered from its peak of 6.1% recorded amid recession in 2009. The vacancy figure recorded in 2010 for Lambton precinct is 2.7%, which is below the pre-recession average vacancy rate.

Almost all of the vacancy observed in the precinct was off Lambton Quay, either in the Old Bank Arcade or on Featherston Street. As with retail centres throughout the country, vacancy in Wellington retail has become more apparent in areas away from main thoroughfares, as consumer spending has tailed off. Featherston Street and Old Bank Arcade are good examples of this.

Willis Precinct

Vacancy in the Willis precinct edged up over the year to the Bayleys Research 2010 vacancy survey, following a similar result the preceding year. This puts the current vacancy rate at 6.0%, up from a historically low 4.1% in 2009.

As with the Lambton precinct, vacancy in the Willis precinct is most noticeable as you move away from the main pedestrian thoroughfares. In this case, the majority of vacant units were located at the southern end of Willis Street, between Manners and Dixon Streets. The northern end of Willis Street, along with Lambton Quay, forms Wellington’s Golden Mile – the main walking route from the train station to the southern CBD and a highly sought after section of strip retail. Consequently, vacancy on this part of Willis Street is negligible.

Vacancy in the BNZ Centre continues to be very low. Within the centre are a large, open plan food court and other service type retail. It’s tenant mix and location works to make this a popular location for retailers.