Americas Cup to bring $200 million boost in retail spending
America’s Cup to bring $200 million boost in retail spending and potential gateway for more international brands
| 12 December 2017
More spending from domestic tourists and suggestion North Shore retail could benefit
Auckland’s hosting of the next America’s Cup could see more international retail brands using pop up stores to dip their toes in the Auckland market according to new research released today.
The report by international real estate services company CBRE is the second in a series looking at the potential impact of the event on Auckland’s commercial property market and local economy.
For the last America’s Cup held in Auckland in 2003, the report notes the regatta brought an estimated $136 million of additional direct spending into the local retail economy, equating to 27% of total net expenditure generated by the event. This was the second highest out of the industries analysed with marine being the first.
Looking ahead to 2021 and expanding on economic modelling used in a Ministry Business Innovation and Employment research released last month, the CBRE report forecasts $142 million in direct retail spending in a low scenario up to $253 million on a high scenario with a base scenario of $197 million.
Of this, it’s expected $145 million would be within Core retail (groceries, clothing and other general merchandise) with Food and Beverage accounting for $52m.
Compared to a typical retail spend in Auckland over a comparable three-month period this translates to a 3.2% boost to core retail sales with a more significant impact on the food and beverage sector with a 5.6% boost.
According to Tim Male, Director Retail, Advisory and Transaction Services for CBRE New Zealand the additional spend will mainly support existing outlets while also underpinning both pop ups in and around the Cup village as well as providing a good initial trade up period for more permanent new entrants.
Male says the retail impacts are not driven solely by patronage and volume of potential customers, it is also the high-profile nature of the regatta and global media coverage which will attract interest for brand exposure and positioning purposes.
“Since the syndicate bases are likely to be dispersed in Wynyard Quarter and Viaduct Harbour, the nucleus of foot traffic will not be concentrated near any current retail offering and as such, some brands are likely to establish a presence through the likes of pop up stores. While we don’t expect this to result in long term leases of retail space in these locations, if there are suitable opportunities these retailers may establish a permanent presence in the more traditional CBD retail core.”
As with previous regattas in Auckland it’s expected superyachts would make up the biggest class of spenders and although here for shorter period (3-months regatta versus 5 months) the increase in the world fleet of superyachts should mean more numbers of the luxury vessels docking in Auckland.
Male says it won’t just be international visitors either with more domestic tourists expected to visit for the 36th America’s Cup with the wider Auckland CBD retail landscape evolving significantly since the 2003 regatta and now boasting about 70 international retailers, 20% of which sell luxury goods.
“As the nation’s retail capital, Auckland is now better placed to cater for tourists. As such, we expect more domestic visitors will leverage off the opportunity provided by the Cup to see the regatta as a spectator but also to experience the city’s extensive shopping and restaurant offer.”
“In addition to the impact on the Wynyard Quarter/Viaduct and the CBD, interestingly if the racing takes place off the East Coast Bays of the North Shore, Takapuna retail could also see material America’s Cup benefits especially in the food and beverage sector.”
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ABOUT CBRE GROUP, INC.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com..