Report | Intelligent Investment
New Zealand Large Format Retail Report
February 7, 2024 7 Minute Read
- New Zealand will continue to benefit from positive population growth in the next years, boosted by high levels of net migration. This is encouraging for LFR companies, since allows them to tap continuously into a larger market
- Relevant catchment areas for the LFR market around New Zealand will continue to witness population growth in the medium-term. Auckland is expected to lead the way on this front.
- Consumer confidence is improving in New Zealand, after registering historically low levels due to the high cost of living and a high interest rate environment. Higher consumer confidence translates into higher levels of household discretionary spending.
- During the last decade, discretionary spending has been resilient in New Zealand, including in segments such as department stores and household goods.
- Between H1 2018 and H1 2023, the main LFR retailers based in New Zealand recorded robust sales growth, exposing the high demand in this market and its potential growth.
- On the purchasing side, the New Zealand LFR investment market continues to be dominated by private investors, which have account for circa 70% of the total transaction value in the last five years. Most of them are domestic buyers.
- Most of the largest LFR transactions done during 2018-2023 have happened in Auckland, followed by Christchurch, Hamilton, Nelson and Queenstown.
- The LFR market in New Zealand has been resilient in the last years despite strong headwinds and other negative exogenous factors. This market currently has all the right ingredients to continue to grow into the future, such as population growth, more stable financial conditions and good economic fundamentals.