Auckland regional retail vacancy has increased in the past year and currently totals 4.5%, according to the Bayleys Research January 2015 retail vacancy survey, an increase of 1.2% from the twelve months earlier.
The increase has been indiscriminate of region, property grade, or type with all categories increasing marginally. The polarisation between prime and secondary retail continues, with prime remaining very strong and secondary property slow moving.
A large proportion of the retail vacancy continues to be made up within strip retail locations, although there was also a lift in shopping centre vacancy. Vacancy in the strip retail sector for the Auckland region jumped 52 basis points to 6.7% in 2015. This trend of rising vacancy has been stepping up in increments since 2012. Vacancy in strip retail sectors is almost double shopping centre and bulk retail vacancies and dominates the overall vacancy rate. Strip retail appears to be impacted more from the popularity of online shopping than shopping centres. Consumers have added choice, either shopping online or at locations with a distinct point of difference, offering more than just a bricks and mortar outlet, and some retailers struggle to keep up with these advances in consumer behaviour.
Shopping centre vacancy was recorded at just over 3% in 2015, which was a large jump from what has historically been a low vacancy rate in this sector. Vacancy in 2014 sat at 1.13%. In buoyant economic climates, shopping centre vacancy is almost non existent as seen in January 2008 and 2011 but this year vacancy has crept up to pass post GFC levels in 2009 of 1.93%.
A large contributor to these vacancies is the B grade space in Atrium on Elliott. Tenants are demanding a higher quality of premises, and secondary property owners are having diffi culty fi lling space. After falling twelve months ago, vacancy in the bulk retail sector has returned to 2012 and 2013 levels, bouncing back up over the past year to 2.6% in 2015. This is a rise of over 1% since 2014.
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