Auckland CBD
Retail Market
Snapshot Q4 2019

Despite the total retail stock in Auckland’s CBD climbing higher, the vacancy rate is reducing.

February 24, 2020

Heightened demand and strong competition continued in the CBD retail sector during 2H19. Our 2H19 vacancy survey recorded a reduction in CBD vacancy of 38 bps to 2.0% from 2.4% in 1H19. A positive 1,502 sqm in net absorption also serves to demonstrate the strength of the demand in place for retail space in the CBD. Vacancy is expected to remain low until the opening of Commercial Bay in 2020, which will create backfill space. There is high off-market availability currently in preparation for tenant reshuffling.


As the total retail stock in Auckland’s CBD climbs higher in the run-up to the completion of Commercial Bay in April 2020, so too does the level of new-build and refurbishment space under way in the development pipeline. Total CBD retail stock experienced a net increase of 1,009 sqm in 2H19, elevating the total stock to 137,537 sqm.

The level of stock under construction grew by 1,760 sqm to 24,400 sqm from 22,640 sqm last half, with about 18,000 sqm of this to be supplied by Commercial Bay. Additional sources of new retail stock in the pipeline include the 1,900 sqm of new space to be added with the reopening of 246 Queen Street, and around 1,540 sqm that apartment development Seascape Auckland will provide on its completion, scheduled for 2022.

Asset Performance

Amongst sizeable accommodation supply shifts across the city (and before Commercial Bay opens its doors in 2020), average prime CBD rents have continued to steadily fall in 4Q19, reflecting the changing nature of retailing. This quarter, average rents fell 0.3% to $2,863 psm from $2,873 psm in 3Q19, continuing a trend of steadily falling rental rates for the sixth consecutive quarter.

We have also seen lower yields at the upper end of prime stock in 4Q19, given the improvement in quality of accommodation in the market and falling interest rates. The CBD prime yield now sits at 5.80%, reflecting a range of 4.00% to 7.60%. By contrast, the secondary end of the CBD market has remained relatively stagnant with limited yield compression forecast.

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