The Business Herald’s markets and banking reporter.

Christchurch rebuild starts early for retailers

Colin Johnson of Johnson's Grocery. Photo / Simon Baker
Colin Johnson of Johnson's Grocery. Photo / Simon Baker

Dee Dickison was packing her bags in a Bangkok hotel room on February 22 last year when she decided to switch on the television.

At that point, the Canterbury businesswoman didn't know that a deadly, magnitude 6.3 earthquake had exploded beneath her city just a couple of hours earlier.

On CNN, scenes of the destruction in Christchurch were flashing across the screen.

For a moment she thought the pictures were reruns of footage of the earlier September 4 quake, but the reality of what she was seeing quickly became apparent.

Her retail business Toi Toi, which specialises in Kiwi-themed gifts, was at that time located in High St, a hard-hit area of the central city.

Toi Toi's staff and customers who were in the shop at the time escaped unhurt, although they were faced with horrific scenes in the street.

Products were strewn across the floor by the force of the quake, but the store itself was remarkably undamaged.

But as the one-year anniversary of the February 22 earthquake approaches, High St remains off-limits to the public, locked behind the cordons that ring the central city red zone.

After flying back to New Zealand on February 23, Dickison set about finding a new site to reopen her business in, and by April she had a new Toi Toi outlet up and running at Christchurch airport.

Come October she had opened another store in the Cashel St Re:Start mall - a new shopping precinct in which CBD retailers have reopened their shops inside shipping containers.

Across Christchurch, businesses that used to be based in the now-pulverised central city have resumed trading in new locations.

Business parks in suburban areas such as Addington are flourishing.

Many, including Wellington property tycoon Sir Bob Jones, have been quick to write the CBD's obituary.

But for others the rebuilding of the city centre as a business area is vital to Christchurch's future.

Central City Business Association manager Paul Lonsdale, who also manages the Re:Start mall, sees the rebuild as an opportunity to create a vibrant inner-city retail sector.

Even before the quakes, many CBD retailers were losing business to suburban shopping centres.

In Lonsdale's words, the central city "had started dying".

Inner-city retailers were spread thinly over a wide area, which had a detrimental impact on the foot traffic such businesses required to thrive.

"Part of the city plan is to shrink the retail area and we agree with that," Lonsdale says during an interview at his office - a blue shipping container located at the western end of the Re:Start mall.

In a rebuilt CBD, he says retailers should be condensed around Cashel St and "maybe a couple of blocks either side".

"The precinct-style mentality is going to be quite important," Lonsdale says, adding that other sectors, such as hospitality, should have their own hubs nearby.

He says having retailers concentrated together, with good parking and consistent hours, has helped drive the success of Christchurch's suburban malls.

Many of the businesses in the Re:Start area - which has gathered together almost 30 retailers who, before the quakes, were spread out across the central city - are now doing better than they were in their old stores.

Dickison says sales at Toi Toi's Re:Start store in December were double what it made at the now closed High St site during the same month of 2010.

"[Re:Start is] very much a tourist attraction as well - which is good for Christchurch," she says.

Colin Johnson, owner of Johnson's Grocery, a Christchurch institution formerly in Colombo St, also says sales are up at his new store in the Re:Start precinct.

"It is busier here - there's a lot of foot traffic," says Johnson, whose father bought the business in 1949.

Another benefit of the Re:Start mall is the fact that it can be shifted around as the rebuild dictates. When construction begins on the area it currently occupies, the precinct can be shifted to another site.

Mary Devine, managing director of Christchurch department store Ballantynes, which the Re:Start mall has been built around, says the rebuild of the retail areas will be carried out in stages.

"The whole reason we went with the container concept is that it is portable."

Johnson says he's unsure when he might be able to reopen the business in Colombo St. "There's so much demolition work to be done down there."

A geotechnical report by engineering consultants Tonkin & Taylor, released in December, gave the go- ahead for rebuilding on CBD land, and despite the continuing shakes and insurance challenges, central city landowners already have big plans for the area.

According to a survey conducted last year by commercial property brokers Colliers International, only 3 per cent of CBD landowners were planning to sell their properties, while the majority were committed to rebuilding.

Property owner Richard Peebles has plans to build low-rise (two- storey) buildings on a number of inner-city sites left vacant after demolition work.

Questions have been raised about how willing office workers, still spooked by their memories of the February 22 quake, will be to return to the CBD.

However, Peebles says he doesn't have any concerns about finding tenants for his sites, as there is high-demand for office space.

"As soon as you start building they [sign the] lease."

Devine is confident big companies and their staff will return to the inner-city and support the retail trade.

"They'll come back - all the banks will come back and all the professional services [firms] will come back," Devine says. "I'm confident that we'll get a true business hub back in the inner-city."

Lonsdale, on the other hand, says it's not going to be easy attracting businesses back.

"Obviously they're paying substantially less rent out in the suburbs because the land is cheaper out there," he says. "They can park their cars right at the door and their customers can park right at the door, which is something you can't do in the city centre."

Last month two Government departments - Inland Revenue and the Ministry of Social Development - signed nine-year leases on office space for around 500 workers near Christchurch airport.

Lonsdale says a return to some kind of normality in the central city is a long way off, with the rebuild likely to take at least four to five years.

Dee Dickison says she would like to reopen Toi Toi in High St, and her landlord has plans to rebuild.

"It's just such a long, unknown wait," she says.

In the meantime, she is in negotiations to set up another Toi Toi store in a new retail and hospitality cluster being established in Woolston, an outlying area of the city.

"It's going to be a boutique little area," she says. "I'm hoping it's going to turn into a little Soho of Christchurch."

Silver lining for hospitality industry in the suburbs

While the February 22 earthquake had a devastating impact on Christchurch's inner-city hospitality sector, business is booming in the suburbs.

Many of the city's bars, restaurants and cafes were located in the CBD, much of which remains a no-go zone.

Campbell Parker, owner of The Old Vicarage restaurant in Halswell said about half of the city's hospitality industry was knocked out of action by last year's disaster.

"All of that business was effectively spread across the remaining businesses that were open," he said.

Parker said The Old Vicarage was on track for a 36 per cent increase in sales in the year to March 31 this year, compared with the year before. March, April and May were the busiest months.

"Cantabrians were eating and drinking for all they were worth, with all the trauma ... Our coffee trade quadrupled overnight."

Festive season trading in December was "out of this world", Parker added, driven by Christchurch bosses deciding they needed to treat their staff to a decent Christmas function after a tough year.

Hospitality New Zealand regional manager Amy McLennan-Minty said suburban areas such as Riccarton, Merivale and Papanui were hotspots for the hospitality trade in post-disaster Christchurch.

"It's just crazy how busy some of the establishments in those areas are," said McLennan-Minty. "No one is down as far as trading goes, that's for sure, which is surprising considering how many people have left town."

Moving back

76pc of former central city tenants wish to return to the CBD after the rebuild.

60pc of businesses in the professional, scientific and technical sectors have relocated part or all of their businesses because of damage and disruption caused by the quakes.
40pc of Christchurch businesses have reported a drop in revenue since the quakes.

20pc have reported higher sales and a further 20 per cent have maintained revenues.

Sources: Canterbury Employers Survey, Department of Labour/Colliers International Landlords and Tenants Survey

- NZ Herald

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