Auckland CBD shops are suffering a national record 13% vacancy rate, according to a property study.
Bayleys’ New Zealand Retail Market Update had that startling number in its most recent issue.
Ikea is due to open before the year’s end in Mt Wellington but the heart of the city is continuing to suffer, due to the post-Covid economic slump and City Rail Link construction.
Things were worse last year.
Last October, Bayleys found Auckland CBD retail vacancies hit a startling 16.5%. The 13% figure was in the May study.
The Bayleys numbers point to the dire state of many shops in the centre of New Zealand’s biggest city, with the highest-profile closure being Smith & Caughey’s.
Another study had a lower figure.
On August 20, Chris Dibble head of research at JLL released that company’s second-quarter market dynamics report, which studied various asset classes, including retail. That found Auckland CBD shops had a vacancy rate of just 7.5%.
The overall Auckland retail vacancy rate was 12%, up from a zero vacancy rate in 2019, JLL’s report said.
Bayleys’ May report found other parts of Auckland also with many empty shops:
Retail in other parts of New Zealand is faring better than the Auckland CBD.
Wellington CBD retail is 5.3% empty, Tauranga retail 3.9%, Hamilton retail 2.6%, Christchurch 3.3% and Dunedin 1.9%, Bayleys found in May.
The agency, whose retail division is headed by Chris Beasleigh, said vacancy rates were a combination of data in town and city centre, large-format and trade retail properties.
Vacancies on the main CBD streets were “significantly higher” in the five major cities, the agency noted.
The highest-profile closure this year is that of Smith & Caughey’s, shutting its Queen St flagship as well as in Newmarket.
JLL put CBD prime retail average rents at $2575/sq m but said the decline was slowing and there had been an improvement in the overall Auckland retail vacancy rate since last year’s final quarter.
In May, RNZ’s Checkpoint counted 24 shops empty or for lease on Newmarket’s Broadway. Businesses said the empty buildings weren’t a good look for attracting customers, and the area sometimes felt like a ghost town.
Newmarket Business Association CEO Mark Knoff-Thomas said there were fewer vacancies on Broadway now than there were 10 years ago.
“Vacancies are now clustered into a central area, so it looks a lot worse than it is. We knew when Westfield opened that there would be a period of recovery for surrounding areas,” Knoff-Thomas said.
Smith & Caughey’s site on Broadway was sold, with a settlement due next month, and would be fitted out as a new shop by the end of November, he said.
A Smith & Caughey’s spokeswoman said it was “unable to provide further details” on the Newmarket sale.
The ex-Noel Leeming shop on Broadway will be re-tenanted soon, leased via Colliers, Knoff-Thomas said.
New hospitality businesses and other businesses had also leased space in the area.
Vacancies are not stopping new shops from rising.
In December, Ikea’s debut was found to be the largest new Auckland building under construction out of 53 projects planned, rising or just completed, although data centres dominate new stock overall.
Daniel Friedlander, of the $2 billion Samson Corporation, is using the downturn to refurbish shops in Karangahape Rd, Ponsonby Rd, Onehunga, Grey Lynn and Dominion Rd.
“They’re leasing but taking longer than they were. I’m working at Karangahape Rd with the business association and homeless to strengthen the community and tenants, putting in security and supporting businesses,” Friedlander said.
Twelve shops were advertised for lease on Samson’s site on August 21, in Mackelvie St, Karangahape Rd, Beresford Square, New North Rd, Ponsonby Rd, Pompallier Tce and Howe St.
Zoltan Moricz, CBRE’s head of New Zealand research and executive director, studied the biggest office, retail and industrial building developments where physical work was considered imminent, had started, or was nearing completion.
He carried out the research with colleagues Shang (Roger) Du and Bianca Cornforth and found the Ikea store, at 34,000sq m, will be the ninth-largest retail space in Auckland.
There are only eight retail centres – shopping and large-format retail centres - that are bigger.
The second-biggest Auckland retail development after Ikea is the new Maki Centre at Westgate on Auckland’s north-western fringe, CBRE found.
That is an 18,000sq m project. The Maki Centre is on the same side of the road as Mitre 10 Mega and across the road from New Zealand’s first Costco. The new under-development centre is directly beside Costco Fuel.
Furniture retailer Early Settler’s sign is now up on the Maki Centre.
Directly behind Costco Fuel, new drive-through fast-food outlets were developed and opened in 2024.
Also at Westgate, construction of New Zealand’s biggest Kmart is under way. The shop will be more than half a hectare, almost right opposite Costco Wholesale.
Karangahape Rd businesses are enduring a tough winter, with spending down 22.5% due to economic and construction challenges.
Helen McIntyre, who has run handmade crafts and furniture store Buana Satu on Karangahape Rd for 34 years, previously told the Herald she’s never seen a winter this bad.
She cited parking issues and anti-social behaviour as major concerns affecting trade.
Some weeks, she hasn’t made enough to pay her rent to the Methodist Church, which owns her building. She’s scraping by on income from properties she bought during better times, but predicts business will pick up “after the doom and gloom of winter”.
Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.