Snapshots

Christchurch Retail Market Snapshot Q3 2019

While the overall vacancy rate for Christchurch retail has remained relatively stagnant, the submarkets that we track have shown slight fluctuation.

November 27, 2019

Demand

Local and international demand has mostly been satisfied in the Christchurch retail market. This has created a challenging ongoing situation for landlords of vacant space as with the variety of new space on offer, occupiers have sought to move up the grade spectrum.

While the overall vacancy rate for Christchurch retail has remained relatively stagnant, the submarkets that we track have shown slight fluctuation.


Supply

Completed stock numbers plunged in June 2019 with the lowest number of completed square metres recorded since June 2017. The supply response to the 2011 earthquakes has slowed right down with only small amounts of new and refurbished stock coming into the market.

A number of developments are due to be completed in 2H19. This includes the new ~14,000 sqm Bunnings Warehouse in Harewood, and the Bush Inn Shopping Centre that has Briscoes and The Provedore (permanent farmers market) among its known committed tenants.


Asset Performance

Across its major cities, New Zealand’s retail markets are facing a slight challenge to keep tenants with rents at existing levels. However, trophy retail assets in Christchurch are still seeing demand with the largest sale of the third quarter sitting at $50m at 60 Lichfield Street.

Average prime and secondary CBD rents remained at 2Q19 levels, $738 psm and $375 psm respectively. Average prime suburban rental rates dropped $25 to $475 leaving secondary suburban rates at $225 psm.

Yields in Christchurch have all compressed at least 25 bps with secondary CBD space compressing the most having dropped to 7.00%

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