Christchurch retail
market snapshot 2Q20

August 05, 2020

Since 2H19, total vacancy has fallen only 0.9% to 7.9%. However, greater fluctuation has been seen among the submarkets. Over the half, CBD vacancy fell to 9.0% from 10.3%, while Suburban vacancy rose from 3.6% to 4.1%. Of the three major property asset classes, the impact of COVID-19 has hit the retail sector more harshly. The retail market is presently facing difficulties in Christchurch, as tenants are fewer in number and existing businesses are under pressure. We are likely to see closures, although predicting scale is difficult.


With net completions of 3,477 sqm over 1H20, total stock increased slightly to 248,694 sqm. This increase came entirely from addition to stock in the CBD retail sector, where total stock increased to 77,535 sqm. Among the new completions recorded are the new build redevelopments for the Duncans Buildings on High Streethe CBD. Other projects at various stages of planning, construction, and refurbishment have estimated completion dates out to 2022.

Asset performance

 As expected with recent market shocks, rents decreased and incentives rose during 2Q20. Prime CBD rents fell 10.3% to $650 psm over the half while secondary rents fell 9.4% t$363 psm. CBD yields sotened across all sectors, rising t6.44% for prime stock and 7.25% for secondary stock. Like elsewhere, the sotening of retail capitalisation rates is due to reduced sentiment and liquidity issues for non-prime assets. Further downside risk has been factored in to include requirements for abatements, longer letting-up periods and long-term vacancy provisions.

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