Hawke's Bay retailers are doing better than expected post Covid-19 lockdown, according to the latest Turley & Co's Retail Focus Research October occupancy survey.
The survey by the Hawke's Bay-based property strategy and valuation company which covers the third financial quarter of the year shows only minor changes in prime retail areas despite restrictions placed on businesses and people because of the Covid outbreak.
The last survey was completed in April 2020, just before the lockdown.
"At the time of the nationwide lockdown, economic commentators suggested a bleak period ahead for physical store retailers in New Zealand," Turley & Co valuer and property strategist Pat Turley said.
The combined occupancy of primary retail locations in the region is 92 per cent compared to 93 per cent in March 2020, showing a relatively small decrease compared to what some were expecting.
In 2015, the combined occupancy was at 90 per cent.
Since the lockdown, shop vacancies have increased by seven shops in Napier-Hastings – three vacancies in the Hastings prime CBD and four in the Napier Prime CBD.
There was a change in the opposite direction in Havelock North with one less vacancy compared with March, "proving Havelock North remains a Hawke's Bay retail districts standout at 98 per cent occupancy."
The number of vacancies in Taradale's Gloucester St was unchanged from March 2020 to October 2020, with four vacant units.
"The latest occupancy survey result is considerably better than some commentary suggested might occur."
"We suggested Government subsidy and stimulus packages, combined with retailer and hospitality innovation and more people shopping local, could help underpin a Hawke's Bay town centres rapid recovery.
The latest survey also shows the continuing trend of Hawke's Bay retail precincts swinging towards hospitality.
Bayley's Napier commercial, industrial and retail real estate agent Sam MacDonald has seen similar results the past few months saying the outcome is "certainly better than initially expected."
He believes the good domestic tourism numbers Napier has seen and flexibility of landlords with lease lengths and rent relief for good tenants has helped.
The shops which are now vacant in Napier include Australian chain retailers such as Pagani and Typo – a general retail trend which was happening before Covid-19 he says – and smaller stores.
The bigger stores are staying vacant for longer while the smaller stores are being snapped up more quickly as they're ideal for the smaller and boutique retailers and hospitality venues moving into the CBD.
However, Turley and MacDonald both say the longer-term impact is yet to be felt.
"Government subsidies and stimulus plus landlord support has possibly time-shifted business effects for some main street retailers and hospitality businesses," Turley said.
"There may be retail challenges ahead that could be reflected in some vacancy increases by the autumn."