Rejuvenation of Hamilton's office space has been the impetus for new retail operations to be established in the city centre, along with attracting residential development, says a new Bayleys Research report.
"Hamilton City Council's push to reconnect the CBD with the Waikato River looks to be gaining traction, with a number of recent office and retail developments re-orientated towards the river - the largest being the Victoria on the River [VOTR] complex by Matt Stark," says Bayley's researcher Goran Ujdur.
The changing face and tenancy structure of Hamilton's CBD is gathering momentum as older commercial buildings are 'morphed' into new entities, and new tenancies move into the precinct, he says.
"As well as providing a much-needed refreshing of the CBD, the steady stream of office refurbishments and development activity is spurring a new wave of retailers to the CBD - including names like Lululemon and Ruby - many encouragingly, orientated towards the Waikato River.
"In addition, a string of fashionable food and beverage businesses has opened up, drawing both the office crowd and other patrons to the city centre; and also increasing the demand for more high-spec office space."
Ujdur says Hamilton City Council has allocated $13m in its latest 10-year plan [2018-2028] for the acquisition and demolition of a number of tired commercial properties on Victoria Rd between VOTR and the proposed new regional theatre.
"Should this plan proceed, it could act as a major catalyst for further revitalisation of the city area," Ujdur says.
"At the northern end of the CBD, the council's plan to encourage recycling of older commercial properties into higher density inner-city housing looks to be working.
"A growing list of townhouse and apartment projects is underway around Angelsea and Rostrevor Sts which is adding another positive dimension to the rejuvenation of the city centre."
Among the new construction work identified for Hamilton's central business district by the Bayleys report is:
• a 13-level tower with a 166-room hotel on seven levels, serviced apartments on two levels, and some commercial and retail space on the lower floors on the former Les Mills gym site on Victoria St; and
• a 40-room expansion at the Novotel Tainui Hamilton with completion due in 2019 – coming closely behind a major refurbishment at the Sudima Hotel on Victoria St.
Ujdur says the research demonstrated the 'usual property scenario' by identifying 'Location, Location, Location' as a key factor underpinning profitability for the city's retail sector.
"Pockets of underperformance remain, especially in poorer quality, secondary locations; but within the main thoroughfares, where increasing rebuilding is occurring, retail activity is gaining more traction.
"Should plans for a new regional theatre fronting the river on Victoria St proceed, this would certainly act as another major CBD drawcard, underpinning the retail sector."
The Bayleys Research report says yields have firmed for all but poorer Hamilton secondary CBD retail properties.
Outside the CBD, growth in new residential subdivisions to the north of Central Hamilton has supported retail trade at larger centres such as The Base and Te Awa.
"We expect interest and activity within the neighbourhood sector to continue to grow - especially if there is approval for some of the larger proposed residential subdivisions such as Te Awa Lakes where about 1000 homes are planned on 51ha in Horotiu," says the report.
"Equally, should the proposed 1000 dwelling Amberfield subdivision - which forms the eastern portion of the larger 720ha Peacocke Structure Plan to the south of Hamilton - proceed, the need for additional retail, especially neighbourhood type centres, will continue to grow."