Supply completions have been very low in 2019 compared to previous years showing that the stock taken by the earthquakes has now almost been rebuilt.
The overall Christchurch retail vacancy rate only dropped 16 bps to 8.8% over the last half of 2019 with more fluctuation seen in the submarkets. The largest change was seen in the CBD and the smallest in the suburban market, now with vacancy rates of 14.1% and 6.7% respectively.
Net absorption has increased for 1H19 to a little over double, but this still is very low compared to previous years.
Supply completions have been very low all throughout 2019 with just over 2,000 sqm added to the stock base. All years recorded previously have been over 9,000 sqm of completions each, showing that the stock taken by the earthquakes has now almost been rebuilt.
There still remains a few small projects trickling through the development pipeline.
The divide between the prime and secondary rents in both CBD and suburban markets have both seen a modest closure with the CBD moving from a $363 psm gap in 3Q19 to a $325 psm gap this quarter. The suburban space has repeated this trend moving from a $250 psm gap to a $200 psm gap.
Yields have remained flush with 3Q19 levels with the forecast throughout 2020 being flat in the current retail conditions. The average prime yield stands at 6.25% while secondary is at 7.00%, with the ranges of the two sectors overlapping slightly.
Retail assets remain desirable with investors with close to $145 million worth of transactions done in the sector during 2019 - the largest in 3Q19 going to 60 Lichfield Street for $48.8million.