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Tauranga a benchmark for New Zealand retail

Paul Keane
Tauranga

My comments last week on the future of shopping centres received some wide commentary and some direct feedback. The principal response was the ability for retailers to be able to pay the rents on offer for new space, and who then will fill the space being built. The very recent announcement that Bayfair Shopping Centre in Mount Maunganui Tauranga is to have a $100 million dollar refurbishment and expansion including cinemas and additional retail would seem to fly in the face of my comments last week.

"It takes many years for a shopping centre to be planned, and it takes even longer for an existing shopping centre owner to expand an existing centre particularly where new space for expansion has to be acquired". 

This is the case at Bayfair where the retail offering has been stagnant for years, and unless a major redevelopment is undertaken, the centre runs the risk of further erosion and very stiff competition.

Tauranga of all regional centres has been impacted by what I call the "Auckland Invasion". These are the retirees predominantly who have sold in Auckland for a healthy profit and moved to Tauranga in such locations as Bethlehem, Papamoa etc. I emphasise the word "Retirees". These older folk don't necessarily work so their spend is somewhat less than other consumers. The retail growth in Tauranga has been far more significant than any other region. The Crossroads has been built at Tauariko, and plans for a major Town Centre in Papamoa are already on the drawing boards.

I suspect that the announcement of a $100 million dollar redevelopment and expansion of Bayfair shopping centre was forced on the owners by the pending competition.

Tauranga is unique in that people living in Mount Maunganui will shop in the area and those in Tauranga will shop in their closest neighbourhood. Tauriko and Bethlehem therefore will have their own followers as will Bayfair. Consequently, people are now less inclined to travel a distance to a shopping centre if they have like offerings on their doorstep, and online shopping also has a separate appeal. The secret is therefore for Shopping Centre owners to make their centres more appealing than others in an endeavour to reach out to people living beyond that centres traditional trade area.

"Watching what happens in Tauranga over the next couple of years will be a benchmark indicator for the rest of New Zealand retail." 

Certainly there will be a significant pursuit of likely retailers to occupy the space on offer. One assumes that Bayfair have already acquired a cinema operator, but the rest of the space will need to be filled to make the financials work for the developer and its bankers.

Sales will be the dominant driver for all retailers going into 2018 and the added attraction will be easy and free car parking, something that Bayfair as an example has lacked in quantity to date. Challenges are certainly ahead, but for the sake of Bricks and Mortar, I hope the owners do well, and the outgoings on offer give an opportunity for retailers to make some money in what I suspect will be fierce competition.

RCG - Crafting New Spaces

The new St Mary’s Mother Bernard Towers Science Centre in Ponsonby Auckland, designed by RCG, celebrated its opening recently.

The event was attended by RCG architects, guests and dignitaries and was a great day according to Senior Architectural Designer, Alex Liang.

Alex who worked on the project along with Maarten Van Rossum, Project Architect says it was humbling to be part of a project with such significance.

“The college plays a very important part of Auckland’s history and to see the centre complete was really satisfying”.

Established in 1850 St Mary’s College is the oldest existing school in central Auckland.

Project Director, John Long and Paul Keane, RCG founder and Chair of proprietor company St Mary’s College Auckland Limited were among the many speakers at the event.

Guests had a tour of the 1700 sqm state-of-the-art centre featuring eight science labs which sits alongside the Paul Keane Gymnasium.

St Marys

St Mary's College Ponsonby, Auckland

In the Press

Local Media Highlights Monday 9 October - Monday 16 October 2017

 

Election uncertainty's chilling effect on houses for sale

The usual spring surge of house listings has failed to materialise and the election is partly to blame, according to the head of Trade Me Property who says Auckland is particularly dire.

"We are seeing unusually low stock for this time of year, we think homeowners are to some extent waiting for an election outcome before they put their property on the market" said Nigel Jeffries.

(Source: NZ Herald)

Singaporean firm buys NZI office building for $63m

Singapore-listed property group Roxy-Pacific has bought its second office building in New Zealand, the NZI Centre in Auckland for $63 million. The five-storey 9446sq m property at 1 Fanshawe St is fully leased to New Zealand's largest insurer IAG New Zealand.  The building was developed by Newcrest Group and has a leasehold tenure until December 2036, which is perpetually renewable for 20 years.

(Source: Stuff)

Australian buyer of New Zealand footwear chains signals changes

New owners of Hannahs and Number One Shoes say the New Zealand footwear market is increasingly competitive, but the brands are strong enough to withstand it. Australian private equity fund manager Allegro backed current managers Roger Harper and John Elliott to buy the retail brands from Bapcor.

(Source: Stuff)

Tauranga’s Bayfair Shopping Centre plans a $100 million expansion

Tauranga’s population is booming, and so is its attractiveness as a shopping destination. The Bay of Plenty city’s Bayfair Shopping Centre is investing in this future with a new $100 million expansion which will add around 50 specialty stores; a dining precinct; a new Countdown supermarket and a seven-screen cinema complex.

(Source: The Register)

 

 

 

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