International Interest Signals A Post-COVID Bounce Back For NZ Retail

JLL NZ’s market snapshot data for Q3 2022 suggests that while New Zealand’s retail sector still faces some immediate economic headwinds, the medium-term outlook provides several positives for the economy, especially if we look further into 2023 and beyond.

JLL NZ’s Head of Research, Gavin Read, says making New Zealand attractive for travellers, businesses, workers, and investors is critical to our post-COVID recovery and future economic success – and this week’s retirement of the Covid-19 traffic light framework is a positive step.

Gavin Read

“There is still some work to be done on our immigration settings, however work does seem to be underway by Government and officials to get this right,” says Read.

With the reopening of our international borders comes positive indications that offshore investors are investigating a return.

In Auckland, Nike, which already has a presence across five locations in Auckland, will be opening later this year at 222-228 Queen Street. Ikea recently announced plans to open a studio in Wellington. And international burger chain Wahlburgers has announced plans to open five stores nationwide, starting in Christchurch.

Read says another positive dynamic is the rising movement in mixed-use property developments, with several mixed-use property developments comprising of office, hotel or apartments coming to market in Auckland over the next 18 months.

“Notable developments include Seascape Auckland, Britomart's Barrington, Sofrana Buildings on Customs Street East and Galway Street, and 110 Carlton Gore Road by Manson.”

In Wellington, various mixed-use developments are expected to add at least ~5,300 sqm of retail space to the Capital’s CBD, with 40-44 Bowen Street Offices and 15 Customhouse Quay (Site 9) expected to complete by the end of 2022. While in the Garden City, a mixed-use development at 93-95 Cashel Street (The Terrace Stage 2), which will be home to several hospitality and service-based tenants, is expected to be complete by end this year.

Read says that the CBD retail sector’s renaissance will also be fuelled in part by more workers returning to the office more regularly, attracted by the additional focus employers have placed on accommodating the hybrid model.

“We see a real synergy between these two sectors, and retail developers and investors will be paying close attention to the ‘flight to quality’ that now defines New Zealand’s prime office market.”

JLL NZ’s Head of Retail and Metro, Nilesh Patel, says it’s encouraging to see optimism return to New Zealand’s retails sector.

Nilesh Patel

“The combination of borders opening to tourism and immigration, cruise ships returning, workers coming back to the office in droves and this week’s easing of Covid-19 restrictions will have an exponentially positive impact on the sector.

“With enquiry and engagement already on the rise, I’m expecting a significant uplift over the next six months, and businesses that move in this forecast-positive market will be well placed to capitalise on this."

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