Retail NZ’s latest Retail Radar quarterly survey of its members showed a rise in retailer confidence, with 65% confident or very confident that their business will survive the next 12 months.

With Black Friday and Christmas trade are expected to lift Q4 2024 sentiment and takings, 57% of survey respondents were feeling optimistic that sales targets could be met.

Meanwhile, NZIER’s Quarterly Survey of Business Opinion shows a recovery in confidence back to pre-pandemic averages, and the NZ Herald’s Mood of the Boardroom survey of business CEOs revealed an economic confidence rating of 3.23 out of 5 – the highest score since 2016.

Bayleys national director retail, Chris Beasleigh, says the Auckland retail leasing market is showing signs of green shoots following interest rate cuts.

“It was a pretty tough winter for retail, and we saw many casualties of subdued consumer spending – particularly in the hospo’ sector – but the leasing market is not homogenous. Demand for space is dictated by size of premises, location, and the level of existing fit-out.

“Properties in proven and busy areas naturally lease quickly, and more so if the current fit-out can transition to a new occupier.

“However, older properties and some space along retail strips – like Newmarket, which recently saw stalwart retailer Smith & Caughey’s close its operation there – are harder to lease currently.”

Beasleigh says retail rents are flat, and for those businesses looking for retail space, the usual mantra still applies.

“Occupiers should engage with a fit-out consultant or other retail professional prior to the search, ensure they have a clear and realistic rental budget, be armed with a fit-out cost estimate and an operational timeline to open the premises.”

In Wellington, retail specialist Johnny Curtis says slowing market conditions in the CBD have been well-documented.

“Ongoing Council discussions about redeveloping the Golden Mile, the construction of cycleways, and the redevelopment of key landmarks like the City Library and Town Hall have created uncertainty, which is affecting retailer confidence and led to some established retailers closing their doors.

“However, there is positive movement in the suburbs, including the Hutt Valley, Porirua, and the Kapiti Coast, with increased activity and more opportunities for businesses.”

Curtis says while traditional retail is experiencing relative stability, the hospitality sector is facing significant challenges leading to an oversupply of hospo’-related space due to closures.

“On the other hand, there’s an ongoing shortage of large-format ‘big box’ retail spaces, particularly in the inner city, and there are no significant new developments or expansions in the pipeline.”

Despite a number of high-profile business closures, rents in the CBD have remained stable, indicating a market focused on meeting tenant needs.

“Ongoing discussions around the Golden Mile and cycleway developments contribute to this stability as businesses are cautious about making long-term commitments to space,” says Curtis.

“In contrast, rents in suburban areas are rising due to growing demand for more-accessible locations with convenient parking and proximity to amenities – driven by businesses seeking to improve customer convenience and this upward trend in suburban rents is expected to continue.”

Occupiers in the capital are well-aware of the need for robust NBS building and seismic credentials, but should also keep a close eye on Council initiatives says Curtis.

“Cycle lanes and reduced on-street parking are creating accessibility issues and shifting customer flows, and any redevelopment/revitalisation of the Golden Mile will lead to short-term disruption and operational challenges for businesses navigating construction zones.”

In Christchurch, Jesse Paenga, Bayleys South Island capital markets and corporate leasing director says retail leasing dynamics vary significantly depending on sector and location.

“Although trade is still tough in certain sectors, CBD retail in and around Cashel Mall continues to go from strength to strength with no vacancy on the main strip and demand starting to push off Cashel onto neighbouring streets.

“New leases include global women’s activewear retailer Sweaty Betty for its flagship New Zealand store in the new Carter Group development on a Cashel Street site which had sat vacant post-earthquake.

“Starbucks returns to the CBD post-earthquake signing on for a store in the Spark Building in Cathedral Square, and there are also several high-profile retailers looking to move into the CBD but struggling to secure prime spaces.”

Paenga says activity is high at several key large-format lifestyle centres, with retailer Harvey Norman committing to space in the final stage of the Northlink shopping centre in Papanui and due to open a new Ravenswood store soon.

“New entrant to the market Panda Mart has opened at the Northwood Supa Centre, bringing new life to the centre which saw the exit of The Warehouse.

“Space is generally readily available in most suburban specialty centres with the exception of Westfield Riccarton, while key lifestyle centres and the CBD are generally showing low to no vacancy. This means occupiers need to allow plenty of lead time to find the right opportunity and may likely have to wait for other occupiers to leave.”

Paenga says rents are a mixed bag, with core CBD retail seeing upward pressure due to the limited supply and driving up rents on key streets surrounding Cashel Mall.

“Other rentals are generally remaining stable; however, we expect to see some upward pressure on new large-format properties due to increased construction costs.”