Hawke's Bay's commercial property; Positive signs

There has been an upswing in the Hawke's Bay commercial property market, with Hastings developments helping to stimulate a previously depressed market.

Colliers International director Jude Minor said listings in Hawke's Bay totalled $17 million, including the new Farmers store in Hastings.

"Our knowledge tells us that the trend in land value, volume of sales and leases has passed its lowest point," he said.

There had been significant sales, with more pending, including the Kmart Plaza and new The Warehouse retail store in the former Nelson Park, he said.

"There are some positive signs in leasing and sales results. Sales from the previous portfolio were over $20 million," he said.

Colliers International director Cam Ward said the Farmers offering was "pretty unique" for Hawke's Bay in that a funds manager was offering investment into a local property with a proven retailer.

"This is specifically tailored for Hawke's Bay investors with proportional ownership in units of $1 million, therefore there will only be a small group of investors," he said.

The investment offered an initial investment return of 9 per cent with a 15-year lease to Farmers along with a smaller lease to the TSB Bank.

Hastings Business Association General Manager Jane Janes said the new Farmers store would act as a strong anchor for the CBD.

"The smaller speciality retailers will benefit from the increased foot traffic the new store is expected to generate and many now see it an opportunity to open on Sunday as well," she said.

The current Farmers for Home store in the 100 Heretaunga St block was purchased by Wallace development and expected to be converted into smaller tenancies with a focus on attracting fashion-based retailers.

"One of the biggest issues we've faced is that many stores within Hastings' CBD have narrow frontages that are just unsuitable for some of the major fashion brands. This new development will overcome many of those issues and we're hopeful of attracting some big-named brands to Hastings," Ms Janes said.

Not everyone thought the future of Heretaunga St as a retail destination was assured. Instant Finance CEO Richard de Latour predicted the former Nelson Park development would cause a decline in Heretaunga St shopping. His company's new branch was close to the development, on the corner of Karamu Rd and Jervois St.

Retail occupancy rates in Hastings continued to improve since early 2009, with the latest figure of 97.3 per cent the highest since 2002. Napier was 92.2, Taradale 93.8 and Havelock North 97.7 per cent.

Robyn Burns, centre manager for The Plaza in Russell St said foot traffic had continued to increase this year, with June a particularly strong month with an increase of 7.3 per cent compared to the same period last year.