Whangarei businesses playing musical chairs in CBD reshuffle

Bank St's Paper Bag Princess owner Maggie Churcher, pictured with retail assistant Paris Munro, says better lease flexibility and value for money made her move her shop across the road. Photo / Christine Allen

Businesses in Whangarei's CBD are playing musical chairs for cheaper, flexible leases amid a stagnant retail sector as 43 premises remain vacant.

However, some business leaders believe the CBD is improving by consolidating around Whangarei District Council investment.

Maggie Churcher, of Paper Bag Princess, jumped across the road from her Bank St site in January for a better bang for buck and a more flexible lease.

With rights of two-year renewals for six years, she said retailers wanted less liability.

"Landlords have been stubborn on prices. My business is doing better this year ... it appears people have more money."

The Northern Advocate surveyed the CBD, covering Vine, Bank (as far as Dent St), upper Dent and Walton Sts, and Cameron Sts (from Walton St only), Quality, Robert, Rathbone, James and John Sts.

The survey included the Strand, Civic and Quest Arcades. Rathbone, Bank and Vine Sts and the Strand Arcade had a high number of vacancies.

In a December 2014 survey, the Advocate counted 40 vacancies, with Rathbone, Cameron and James Sts the worst affected areas.

Of landlord Richard Langdon's eight CBD properties, only one was empty - the recently vacated 390sq m Whitcoulls store.

Mr Langdon said Cotton On Kids was the only sign of investment for a new market.

The big players were staying and getting reduced rent on premium sites, he said. The average rent was between $250 and $350 per sq m.

"Landlords have been taking the cream off the top for a bit but are having to negotiate."
The retail market was stagnant and in "a holding pattern".

"But the better retailers are getting closer together, and paying higher rent for their spots."

Tony Collins, Northland Chamber of Commerce CEO, said business was being consolidated around council investment areas.

"The market is using the council's investment, the Laneway and canopy projects, to indicate where growth will be. While there might not be growth yet, there is consolidation."

He said the CBD was too large to begin with but appeared to be repairing itself.

The Chamber has moved into the new Orchard centre on Walton St - a business decision that could help counteract the loss of office workers from the city centre, he said.

Landlords were scrambling to lease properties and commercial real estate agent for Bayleys, Ross Blomfield said it was a tenant's market.

"The retail sector needs to be dynamic. It's having to adapt and look at rent."

Mr Blomfield said rent in the CBD could cost anything between $100 and $600 per sq m.

Shorter leases allowed retailers to ping pong around the CBD, with average leases running from one to three years, and pop-up shops on month-by-month terms.

He agreed the CBD's commercial sector remained stagnant, with little new investment.

Paul Dell, group manager district living at WDC, said the council could only provide a canvas for investors and the Cameron and James Sts laneway and canopy projects had been major, successful jobs.

He said there were signs of investment in the CBD with ASB's plans to build its headquarters on Rathbone St and Cotton On renovating its unit and introducing its new Cotton On Kids store.