Tauranga's CBD has received "a shot in the arm" with more than $23 million worth of building consents in the year to June 30 - up 212 per cent from the previous 12 months - and business leaders say it is "evolving into a commercial hub".

Commercial real estate agents also report renewed interest in downtown Tauranga with several high-profile buildings sold over recent weeks as investors take advantage of low-interest rates and high yields.

Figures supplied by Priority One show $23.6 million in building consents were issued by Tauranga City Council for developments in the city centre, a 212 per cent increase on 2013/14 when $7.6 million of consents were granted.

Major consents were issued for the Trustpower head office which had three consents valued at $12.5 million but there were others for earthquake strengthening work, refurbishments and the new Gartshore building in Wharf St, Priority One projects manager Annie Hill said.


Tauranga was "coming of age as a city", she said, and according to Statistics New Zealand there were 1983 geographic business units in the "Tauranga Central" area at the end of 2013, which had increased by 88 geographic units, or 4.4 per cent, by the end of 2014.

"We are also getting good levels of interest from businesses considering relocating into the city centre."

Tauranga Chamber of Commerce chief executive Stan Gregec said changes were afoot but retail had suffered.

"The CBD is at the beginning of a big transformation after a period of decline, which will see it become a civic and commercial hub, instead of relying mainly on retail."

But the look of empty ground- floor shop fronts was not a pretty sight, he said.

"Some of this will be to do with the earthquake strengthening. So it is a worry to see the retail side of the CBD in decline while many shops relocate to the new suburban malls.

"We can only hope this trend will be reversed as more big employers like Trustpower relocate to the CBD."

Colliers International Tauranga managing director Simon Clark said returns had become more attractive in the central city with yields between 7 to 8 per cent on some properties.


The Farmers building recently sold to Farmers for $13.27 million after seven offers of interest and 94 Grey St, which housed ACC and Child Youth and Family, went for just over $6 million after being on the market for a couple of years while Rydal House also sold for $3.82 million.

The retention of Farmers was positive and he thought the "heart of town" may shift southward with the Trustpower building and new university.

Ray White Commercial Tauranga leasing and sales team leader Philip Hunt said over the past 12 months the company had secured 32 tenancies, up from 29 the year before.

Property Managers Limited chief executive Scott McKenzie said over the past 12 months leasing activity had been relatively buoyant.

"This has been driven by proactive landlords who have upgraded their buildings to suit tenant requirements and a number of smaller businesses and tenants moving into the CBD for profile, to network, and be close to the hospitality precinct."

It was aware of a number of CBD redevelopment projects undergoing feasibility and if they proceeded, that would assist in giving the CBD a shot in the arm, he said.

Tauranga City Council strategy group general manager Christine Jones said council had budgeted $8 million over the next five years to improve the waterfront, and open spaces in the city centre where private developments were taking place.

Other strategic projects already underway include the Tertiary campus and the Tauranga Harbour Marine Precinct.

Opinion divided over CBD

"It can only get better,"

That's Tres Chic owner Melanie MacDougall's view of Tauranga's city centre and she would not dream of basing her shop anywhere else.

She loved the vibe and said there was a positive atmosphere downtown despite the earthquake strengthening work which made the CBD appear empty.

"I just think it has got a really nice charm. It is not a mall, it is town. For me it's all about the vibe."

However, Fancy That owner and free parking advocate Bill Campbell said the CBD was not picking up, "it is getting worse in fact".

"The future is bleak. There is nothing on the horizon that I could say that I am excited about," he said.

"We have lost a lot of shops and major chain stores that would bring a number of people in. ... It's like a big dark hole at the moment for a lot of retailers. There is not much hope."
But House of Travel owner operator Shane Kennedy said he was excited about the future of the CBD and his business had grown.

" We remain confident our Tauranga CBD has a bright retail future. It's actually not about relying on council, it's simply about adapting quickly to a fast-changing retail environment, that's the case whether trading in the CBD or elsewhere."

Any business that did not adapt and wanted council to assist needs to consider its own business model, he said.

"In terms of our future House of Travel have confidently opened a Travelex currency service in the CBD, we have expansion plans for new Leisure and Corporate services, and there is no other place we would rather be positioned than the CBD. We are busy now but excited about the future of this place."