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Latest CBD retail occupancy survey – reading between the lines

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Hamilton’s resilience to Covid-19 is highlighted in the city’s latest occupancy survey.

Mike Neale

The Hamilton CBD Retail Occupancy Survey completed jointly between NAI Harcourts and CBRE Research covers the impact of Covid-19 from June to December 2020. The retail vacancy rate increase of only 0.8 percent (from 7.5 percent to 8.3 percent) shows Hamilton’s resilience in comparison to other large cities in New Zealand.

Reading between the lines, what really happened?


New vacant sites

  • While Niche beauty therapy vacated their Victoria Street site, they relocated to a vacant site in Barton Street.
  • Forsyth Barr vacated their Victoria Street site to take a larger vacant tenancy at the ANZ Centre in Grantham Street.
  • School  Kit vacated their site at The Riverbanks to take a larger office premises in Garden Place.
  • Flight Centre vacated their site on the corner of Ward Street and Worley Place as a result of a national rationalisation.
  • The Hood vacated their Alexandra Street site as part of the group’s restructure to focus on their other core operations.

New tenants that were not put off by Covid-19

  • The Grumpy Baker took up a tenancy at 591 Victoria Street. A third generation baker who through Covid decided it was time to go out alone (if you haven’t been there, go! – the Black Forest cake and selection of pies, real cream donuts and hand crafted breads will not disappoint).
  • The Chemist Warehouse committed to a central city site at Centre Place, fronting Ward Street.
  • Sisterfields eatery opened below Ramada Hotel on the corner of
    Victoria and Collingwood Streets.
  • Cream Eatery committed to Panama Square on the corner of Garden Place and Worley Place.
  • Tudo Bem Brazilian BBQ opened in Hood Street, as did other retailers such as Best Beds, The Cave and Zipp Clothing & Alterations, all in Victoria Street.

 

Why do I believe retail has been so resilient in the Hamilton CBD?


  • We are not reliant on large numbers of government and large corporate occupiers, as is the case in central Wellington and Auckland. Those were the tenants that remained working from home for much longer and were slower to respond to getting back into the office and supporting local businesses.
  • Hamilton and the majority of people understand the importance of shopping local and its flow-on effects within their community.
  • The majority of our retailers are owner-operated businesses, who are passionate and innovative people.
  • Supply chain issues meant that many appeared to revert increasingly to bricks and mortar shopping, as opposed to taking the risk of uncertainty with shopping online.

Retail spending soared in the Hamilton CBD during October – December 2020, reaching $182m, according to Vanessa Williams, General Manager of Hamilton Central Business Association. While unsurprisingly overall figures for the year was down, the CBD experienced records sale figures during this 3 month period. “Its been encouraging to talk to local retailers such as Texas Radio, Trek n Travel and Harper Inc to hear how strongly their sales have rebounded after lockdown – having a strong local presence through active marketing and an online presence has obviously been a key part of this success”.

Surveys Conclusion & Outlook

The end of 2020 showed that while Covid has had an impact on Hamilton’s CBD retail market, there has been remarkable resilience for what is globally a challenging and fast evolving sector.

While a handful of occupiers have departed space due to the pandemic, others have expanded or entered for the first time.

There has been a newfound popularity for Tertiary and Secondary grade retail, which by definition were previously less appealing to tenants. Positive net absorption in each of these grades show that cost conscious retailers are trading off visibility and access to customers with rent obligations, a phenomenon which is broadening the current desirability of retail locations across the CBD.

The types of retailers that have taken new space in the second half of 2020 emulate the Hamilton of the future. New occupiers such as diverse eateries and services for the local population are making the CBD a niche retail destination, that is walkable and vibrant. Intensified housing and apartments development is bringing customers into proximity which will support new businesses going forward.

For a full copy of the report, go to:
https://tinyurl.com/bjv2bwzs

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Mike Neale