Christchurch 'nearly saturated' with shops: researchers
The amount of empty office space in central Christchurch is slowly reducing, but JLL researchers warn of a glut of shops.
A major retail project opening in late 2017 is The Crossing, which is a redevelopment and extension of a former Colombo St retail area.
With retail vacancy currently at 16.1 per cent, the city is near saturation point, JLL national research manager Tom Barclay said.
"There are numerous office buildings on the central business district perimeter with vacant retail space underneath.
"Some hospitality providers are finding it difficult to compete with new entrants."
"Since the earthquakes in 2011, the central city has lacked residents, so trading is challenging during off-peak times and over the weekend."
Roadworks are still affecting the wider CBD area and retailers are facing competition from suburban shopping centres and bulk retail outlets, due to better accessibility and free car parking.
Developers and the council are building car parks with some opened recently and more due to open soon, adding to 3000 parks.
They are at the West End building, The Crossing, a Hereford St car park, one in Lichfield St, plus capacity at The Terrace building, due to open in late 2018.
The amount of vacant office space in central Christchurch has reduced from a year ago, although more several buildings are yet to be completed.
JLL found the vacancy level had reduced from 20 per cent to 14.8 per cent, Barclay said.
However, the actual amount of empty space is higher, according to some other property researchers.
JLL considers that if there is a lease in place over a property it is occupied, but there are many examples of leased buildings only half occupied.
Barclay said there was about 22,000 sqm of office space for lease.
New stock coming onto the market included Ngai Tahu's King Edward Barracks development, Riverlands House in Victoria St, 123 Victoria Street, and the second stage of the BNZ Centre.
Office rentals in Christchurch reached a peak in the second half of 2014, at $425 per sqm. Since then, they have dropped back to about $355/sqm. Secondary rents have flattened to an average $268/sqm.
In suburban locations office vacancy levels are rising and rents are falling. Since 2014, suburban rentals have nose-dived by 23.2 per cent and Barclay said pressure would continue as smaller businesses looked to move back to the CBD following temporary relocation after the 2011 earthquakes.
Christchurch's industrial rental market has remained flat since mid-2015, sitting at $115/ sqm for warehouses and $200/sqm for offices.
Second-tier warehouses and office rents have eased to $83/sqm and $145/sqm.
"Although the city has seen a significant increase in industrial stock, it is encouraging that vacancy levels remained flat at 6 per cent across the city."
The supply of industrial properties has increased to 3.6 million sqm in places such as Waterloo Business Park where developments have been completed for Cardinal Logistics, Sorted Logistics and Hagley Windows and Doors.