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Northerly city expansion has major consequences for Hamilton's central business district

Tags: Commercial Hamilton

Hamilton’ s growth on its northern urban boundaries is not only seeing phenomenal residential expansion – but also the relocation of retail services away from the CBD, according to new research.

Analysis from real estate agency Bayleys has revealed that the success of The Base shopping precinct in Te Awa in attracting both retailers and shoppers was continuing to put pressure on CBD retailing.

Bayleys Research national manager Ian Little said: “Both primary and secondary shopping strips within Hamilton’s central business district are coming under significant pressure - with high levels of vacancies and softer pedestrian traffic.”

“There is no quick fix to these challenges. Council plans to rejuvenate the CBD will take time to generate results. Ultimately a more vibrant and rejuvenated CBD will attract more businesses and workers and lead to increased retail spend.”

Mr Little said retail activity within the CBD’s biggest mall, Centre Place, was performing well – with a $36million upgrade in 2013 consolidating the venue’s position as the primary retail destination in the central city. However, rental levels in other nearby retail locations had not fared as well.

“Prime retail rents have generally remained flat over the past year, while those in secondary locations suffering higher vacancies have come under further downward pressure,” Mr Little said.

“Investment activity has been subdued to date. This is about to change - with two major Hamilton shopping centre owners recently announcing plans to sell down their holdings. Kiwi Property Group has put its redeveloped Centre Place South complex on the market and Scentre Group has also placed Westfield Chartwell on the market.”

Mr Little expected Hamiltonians would be eagerly waiting to hear the city council’s plans for rejuvenating the central business district to have a stronger connection to the adjacent Waikato River.

“These proposed initiatives will both attract, and retain, more businesses and workers within the CBD as an increasing number of retail and commercial opportunities emerge outside the city core,” he said.

“The new Hamilton Plan with its particular focus on an active, strong commercial central city and the connection to the river and residential living is starting. Links to the river have been particularly underutilised in the past and are now being addressed.”

Statistics NZ forecasts Hamilton’s population to grow by 29 percent from its current level of 148,000 residents to 191,000 occupants by 2033.

“Much of this population growth is currently occurring to the north of the city - in areas such as Rototuna North where attractive house and land packages are drawing more families,” the Bayleys Research report says.

“Proximity to employment zones such as Te Rapa Park, and newer retail centres such as The Base in Te Awa, will help underpin growth to the north of the city."


Meanwhile in the commercial sector, the report describes Hamilton’s CBD office market as reflecting a “tale of two cities” – with tight vacancy levels amongst quality A-grade properties versus ongoing weakness and higher vacancy rates amongst poorer secondary space.

“Following a spike in large scale new office development in 2012/2013, levels of new construction have eased - with the emphasis having moved to speculative refurbishment and redevelopment aimed at upgrading older existing office stock.

“Te Rapa remains Hamilton’s other major office precinct and is occupied by a small number of prime tenants such as Ecolab and ACC.

“With much of the city’s population growth centred in fast growing northern suburbs - such as Rototuna North and Flagstaff - the push-pull of office occupiers between the CBD and Te Rapa is likely to continue… despite the council’s district plan encouraging CBD office development over other areas,” Mr Little said.

According to the Bayleys Research data, the overall Hamilton vacancy rate for industrial properties stands at a low 5.1 percent across the city – ranging from a low at 1.4 percent vacancy rate in the Te Rapa precinct, to a high of 8.5 percent in and around Avalon.

“The low vacancy rate recorded in Te Rapa reflects the fact that a majority of development is modern, and has been developed on a design-build basis. Frankton, a far more established precinct, houses older style premises. These however remain popular with small engineering and service companies with agency reports suggesting that vacancy has been trending down over the last two years,” Mr Little said.

For further information or commentary, contact Bayleys Research national manager Ian Little, phone 09 375 8658 / 027 315 6733 


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