Auckland shopping space tipped to keep on growing

Adam Thompson, Director of Development Economics. Photo / Dean Purcell

Auckland shopping space could expand by 70,000sq m annually in the next two decades, equivalent to about 10 football fields a year.

Floorspace will grow from 1.84 million sq m to 2.46 million sq m by 2021, according to a detailed analysis by Adam Thompson, of Development Economics, who identified Auckland International Airport, Silverdale, Westgate, Flat Bush and Newmarket as ripe for more new shops.

Plans were not in place for buildings to rise on specific sites in all these areas, he indicated, but talk in the market showed growth was most likely in those regions.

However, the new centres will not undermine existing strongholds like the CBD, Newmarket, Glenfield, Sylvia Park, St Lukes, Albany and Botany.

"The modelled impact of new retail projects in the developments pipeline indicates that the primacy of these centres will not be challenged," Thompson found.

"Auckland can support an additional large shopping centre the size of Sylvia Park every two to three years. At present, there [are] 310,000sq m of planned and proposed retail centres in the development pipeline, equivalent to a 17 per cent supply increase."

By 2016, retail sales will increase from $14.8 billion annually to $18.1 billion and most of that will go to St Lukes ($400 million), Newmarket ($380 million), Westgate ($370 million) and CBD ($330 million), Glen Innes ($290 million), Albany ($220 million), Flatbush ($210 million) and the airport ($190 million).

Auckland's demographics will drive the growth.

"Auckland is unique in that 40 per cent of future growth will be family households rather than single/couple or mixed households. Family households are a key market for suburban shopping malls/centres and this demographic trend is likely to support and strengthen this family friendly retail centre format," Thompson said.

The internet will not wipe out growth opportunities.

"At present, internet retail accounts for around 5 per cent of all sales in the New Zealand market. Based on the trends evident to other developed countries, this is expected to increase to 15 per cent by 2021, equating to an increase in online sales of 10 per cent per annum.

"While this is rapid growth, it is not of a scale that will significantly affect the sales performance of physical retail stores."