Prime retail rents at record levels
With much of central Christchurch still not rebuilt, demand is pushing up rents for the city's suburban retail space.
Annual rents for prime suburban spots are now at record levels, reaching $1000 a square metre according to researchers at real estate firm JLL.
In a new report into the Christchurch retail market, JLL says vacancies have fallen in most of the city's major shopping areas. The high demand and limited supply means the top sites have vacancy rates of less than 1 per cent.
"There is little central city retail apart from that in peripheral locations, such as Victoria Street. However, there continues to be strong demand in the western suburban commercial centres of Riccarton, Papanui and Merivale," the researchers said.
"Rents are at all-time highs as lessees compete for the limited supply of space." Annual rents per metre have reached $350 to $1000 for prime suburban locations, $450 to $500 for the central city, and $250 to $350 for less popular suburban spots.
The report noted that trading was strong at the city's three main malls, Riccarton, Northlands and The Palms.
A burst of retail development at Hornby would bring the area into the league of the big shopping destinations, the researchers said.
The report said: "There have been a significant number of bulk retail stores constructed within Hornby, and The Hub (formerly Hornby Mall) is currently being expanded making Hornby a substantial suburban commercial centre."
In strip shops around the malls, rents had also increased and were now stable. Several earthquake rebuilds have now been completed in Riccarton and Merivale, opening up more space for retailers.
Suburban shopping complexes were changing hands, and prices being paid by investors had levelled off after rising quickly during 2012 and 2013.
Sales examples in the past year have included a Blenheim Rd complex which sold for $16.5 million, one in Lincoln Rd for $3.9m, and a shopping centre in Riccarton Rd which sold for $2.5m.
The JLL researchers forecast that in the next 12 months, Christchurch's retail property market would continue to strengthen as new space is built or repaired. They expect suburban shopping complexes to "lead the way forward" as the development cycle continues picking up momentum.
The report forecast that retail rents in Christchurch would rise by up to two per cent in the next 24 months.