Total Property - Issue 6 2016
Queenstown’s tourism boom has made the town the place to be – and not just for holidaymakers. The surge in visitor numbers has boosted the commercial property sector.
National retailers are investing and there is huge demand for office space and for new industrial sites encouraged by positive forecasts.
Projections by the Ministry of Business, Innovation and Employment show international visitor numbers will increase from the current 3.3 million to 4.5 million by 2022 – up 36 percent. International visitor spending is forecast to increase by 52 percent over the same period to $16 billion.
Queenstown is the country’s second largest tourism market, so it’s clear facilities will need to be heavily bolstered over the next six years if the forecasts prove accurate.
The hospitality sector in Queenstown is already expanding with hotel occupancy reaching 92.15 percent, the highest figure recorded for the town.
The 59-room Ramada hotel which opened in June, at Remarkables Park, in Frankton was the first new hotel in Queenstown in five years. However, construction is due to start next year on another hotel at Remarkables Park under the Wyndham brand; while a third new hotel – a 172-room development at Jacks Point – is also in the works. In addition, established hotels are refreshing their look and services.
According to Immigration New Zealand, 11,000 Chinese migrants who entered New Zealand under the NZ Residence Programme in the past five years were aged over 50.
Massey University sociologist Professor Paul Spoonley says the Chinese are more likely than any other immigrant group to seek approval for elderly parents. “Family reunification is important but it is introducing a much larger elderly Chinese population. Also the Chinese community already here is beginning to age, notably middle-aged Chinese immigrants from the early 1990s.”
The boom has resulted in a sizeable number of retail developments with growth mainly taking place in the Frankton area about seven kilometres from Queenstown’s CBD.
Leasing and investment trends in Queenstown CBD for both prime and secondary retail space illustrate the strength of the demand and shortage of stock.
Prime retail can command rents up to $1800 per square metre and prime office space $225-$350 per sq m with rents expected to increase in the next 12 months.
Currently there is little new office supply in the CBD and lack of parking is exacerbating the situation. This is creating opportunities for new office space development in some of the out-of-town projects for occupiers who don’t need a CBD address.
Historically, the industrial heart of Queenstown was the Glenda Drive Industrial Estate in Frankton which has largely reached capacity. Further capacity is now emerging in the adjacent new Shotover Park business and industrial precinct with new roading infrastructure adding to buyer demand. Strong interest from both owner-occupiers and investors for good quality industrial space is underpinning a growth in values.
The Queenstown Lakes District Council recently rezoned 14.5ha land in the heart of Queenstown centre from Residential to Town Centre which could prove a “game-changer” for increased higher density CBD development.
The ruling allows land to be used for houses, hotels, office, bars, restaurants and shops (excluding big box retail) and has the potential to kick start development of higher density residential, visitor accommodation and convention facilities; as well as smaller scale retail and commercial uses.
Height limits in the new plan range from 4.5 metres to 26 metres – allow construction of a seven-storey building, although the vast majority of the land has a maximum height limit of around 12 metres.
Read more – Request the full article