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News Release


More mall space to come

After a long period of hiatus, the Auckland market is now delivering a substantial amount of new retail mall space to the supply pipeline.



Long term investment with development potential/new-zealand/en-gb/news/916/long-term-investment-with-development-potentialAUCKLANDLong term investment with development potential
Former Fire Station on high profile corner site/new-zealand/en-gb/news/915/former-fire-station-on-high-profile-corner-siteCHRISTCHURCHFormer Fire Station on high profile corner site

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This is coming down the supply pipeline in the form of new integrated retail as well as extensions to already dominant retail malls. After what has been a seven year lull in supply to Auckland’s retail mall sector, the market will see a huge tranche of retail floor space coming online over the next five years.

​Justin Kean, National Director of Research and Consulting at JLL says, “The completion of Westfield Albany in 2008 was the last major addition of significant retail floor space to the Auckland mall stock base. Between mid-year 2015 and 2020 total additions to space will likely equate to a further 140,000sqm of integrated retail; a figure that is warranted by Auckland’s buoyant market, increasing demand for retailers and sound economic story.”

Dale Winfield, National Director of Valuation and Advisory at JLL says, “There are two key factors that drive the development of new retail space; firstly confidence in the underlying market especially in relation to population growth with ability to offer a community hub including dining and entertainment and secondly the availability of capital to undertake the development. Retail assets in the form of shopping malls and other large formats are now at the forefront of investor’s minds which has resulted in an all-time high for transaction activity in the sector with a noticeable strengthening in yields.”  

Winfield adds, “The continued sound performance of large retail shopping centres that are able to dominate their catchment and deliver sustained income streams has encouraged intense competition for investment grade product. Sovereign wealth funds, pension funds, and high net worth individuals with excess capital have invested in the retail space, and are likely to continue to do so through 2016.”

“Funding for a large quantity of these new retail mall developments that are coming into play is being sourced from institutional or international capital. Singaporean sovereign fund GIC for example are a passive investor to Scentre Group, who are extending Westfield St Luke’s and are likely to be pursuing extensions at Westfield 277 Newmarket and Westfield Albany. Precinct, one of New Zealand’s listed property investors, is looking at redeveloping the Downtown Retail offering and Canadian pension fund PSP Investments are likely to look at opportunities following their acquisition of the APP Fund in 2014. The underlying story is that each of these organisations have sizeable capital resources to spend,” adds Kean.

According to JLL research, from 2015 to 2020 large additions to retail will total 140,000sqm, against a total supply of 1.185 million sqm. This indicates that total integrated retail space is anticipated to grow between 10 and 12 percent from 2008 to 2020. 

Kean says, “This is unlikely to create an oversupply situation however as over a similar timeframe (2006 – 2023) Auckland’s population is anticipated to grow some 28.7 percent. What this means is, the market growth is there to support this expansion of retail and we require this new retail space to not only meet demand of Auckland’s mushrooming population growth, but allow international retailers and brands to enter the market in New Zealand.” 

International retailers coming into New Zealand need modern and often speculative build space in order to accommodate their very specific needs. The Auckland market does not currently boast the type of retail space international retailers require in mass. The announcement of fashion giant H&M opening their first store in Sylvia Park is a prime example of how international retailers will only come in to New Zealand when they’ve got the appropriate space to occupy.

This year we have seen a range of new international retailer entrants to the market with the opening of David Jones, French Connection, Top Shop, Tiffany & Co and Chanel and this is probably just the tip of the iceberg. 

​The outlook therefore remains positive for the sector with a significant supply pipeline being met by a long term growth story and a solid level of demand from exacting international retailers who will only put their brands into the very best space.​