Press Release
Aussie retailers actively seeking space in Christchurch as market tightens
Christchurch
November 18, 2023
Media Contact
Dan Scott
Marketing and Pitch Director, New Zealand
Demand from national and international retailers for store space in Christchurch has reached record highs, leaving no more prime retail units available on Cashel Street and high pressure on secondary CBD retail space as well as suburban large-format units.
Much of this demand is coming from Australia, where retailers are demonstrating strong interest in extending their store networks to Christchurch, particularly prime CBD street-front locations and large-format suburban retail spaces.
Ashley Whitting, CBRE’s National Head of Large-Format Retail based in the Christchurch office, said the level of interest from international retailers seeking locations in Christchurch has reached highs not seen since before the Canterbury earthquakes of 2010–2011.
“There’s intense competition for the remaining central CBD spots and for positions in popular large-format retail centres around the city. We have no more prime CBD space available fronting Cashel Street and only a few secondary spaces. Much of the demand for CBD retail units is coming from Australian fashion tenants.”
With minimal new CBD retail space in the pipeline, tenancies are only becoming available if existing tenants exit their leases – however demand is so high that units are easily backfilled. MECCA’s move to a larger two-level store (previously occupied by Glassons) freed up its former premises, which Glassons will soon occupy. Hallensteins has also moved slightly further east along Cashel Street.
“The block adjoining Plymouth Lane on the south side of Cashel Street is the last remaining undeveloped prime lot on Cashel Street. All the retail space in Carter’s Group’s planned development on the High Street-Cashel Street corner is now under negotiation. Miele’s new showroom on Cathedral Square may lead a trend for retail to spread into this area, however there are no other obvious locations left for prime retail in the city.”
Whitting’s team is in talks with several national and international brands regarding current and future opportunities. Some of these brands, many of which are Australian beauty and fashion players, are new to Christchurch, bringing fresh excitement to the CBD area.
In the large-format retail market, high tenant demand was recently demonstrated by the lease to Sydney Tools at 455 Blenheim Road, Sockburn, for the company’s flagship South Island store and its first in New Zealand. Other recent large-format leases to national and international brands include Ninja Valley taking a space at Bush Inn.
Strong performance in major centres like Tower Junction in Riccarton, Homebase in Shirley, Northwood in Belfast, and Northlink in Papanui is boosting retailers’ confidence in the Canterbury region, with its substantial local shopper base.
“Australian large-format retailers are attracted by the purchasing behaviour of Canterbury residents and are pushing ahead with store network expansions based on favourable retail spending data. As a result, Christchurch’s large-format retail centres, including Tower Junction, Northwood, Northlink and Homebase have very low or no vacancy.”
Canterbury retail sales increased by 5.1% in Q2 2023 compared with the same quarter in 2022. Canterbury’s retail sales growth was significantly higher than both Auckland (3.3%) and Wellington (0.9%) during the same period.
To meet the robust tenant demand, expansion projects are in the planning at both Northlink and Homebase. Carter Group’s upcoming retail project in Rolleston is also drawing attention from both national and international retailers.
Whitting observes that many tenants expanding or entering the market view New Zealand as an extension of their Australian operations, especially because New Zealanders are enthusiastic about fashion and home upgrades.
“Internationally, New Zealanders are known to spend on our homes, personal care and families, fueling local economies. This makes large cities like Christchurch an appealing choice for retailers, along with Auckland and Wellington.”
Christchurch’s efficient freight infrastructure, such as the Lyttelton Port and Rolleston inland container terminals, is also viewed as a plus among international retailers.
“It’s a very exciting time for the city’s retail market, with the main frustration being the lack of space which is delaying the entry of a number of Australian retailers. If there are good quality gaps in the market, these retailers want to fill them. They’re not feeling the pinch of the economic downturn too acutely and the appetite for expansion is still very much there.”
Australian food and beverage brands are also looking at expanding into Christchurch, with some operators which do not currently have a presence in New Zealand undertaking due diligence on hospitality spaces across the city, Whitting said.
“Christchurch has had a great boost from the return of international tourism, with the city reclaiming its position as the gateway to the South Island.”
Christchurch’s projected population growth between 2023 and 2028 also outpaces other regions in the South Island, contributing to the city’s attractiveness to retailers, she said.
Much of this demand is coming from Australia, where retailers are demonstrating strong interest in extending their store networks to Christchurch, particularly prime CBD street-front locations and large-format suburban retail spaces.
Ashley Whitting, CBRE’s National Head of Large-Format Retail based in the Christchurch office, said the level of interest from international retailers seeking locations in Christchurch has reached highs not seen since before the Canterbury earthquakes of 2010–2011.
“There’s intense competition for the remaining central CBD spots and for positions in popular large-format retail centres around the city. We have no more prime CBD space available fronting Cashel Street and only a few secondary spaces. Much of the demand for CBD retail units is coming from Australian fashion tenants.”
With minimal new CBD retail space in the pipeline, tenancies are only becoming available if existing tenants exit their leases – however demand is so high that units are easily backfilled. MECCA’s move to a larger two-level store (previously occupied by Glassons) freed up its former premises, which Glassons will soon occupy. Hallensteins has also moved slightly further east along Cashel Street.
“The block adjoining Plymouth Lane on the south side of Cashel Street is the last remaining undeveloped prime lot on Cashel Street. All the retail space in Carter’s Group’s planned development on the High Street-Cashel Street corner is now under negotiation. Miele’s new showroom on Cathedral Square may lead a trend for retail to spread into this area, however there are no other obvious locations left for prime retail in the city.”
Whitting’s team is in talks with several national and international brands regarding current and future opportunities. Some of these brands, many of which are Australian beauty and fashion players, are new to Christchurch, bringing fresh excitement to the CBD area.
In the large-format retail market, high tenant demand was recently demonstrated by the lease to Sydney Tools at 455 Blenheim Road, Sockburn, for the company’s flagship South Island store and its first in New Zealand. Other recent large-format leases to national and international brands include Ninja Valley taking a space at Bush Inn.
Strong performance in major centres like Tower Junction in Riccarton, Homebase in Shirley, Northwood in Belfast, and Northlink in Papanui is boosting retailers’ confidence in the Canterbury region, with its substantial local shopper base.
“Australian large-format retailers are attracted by the purchasing behaviour of Canterbury residents and are pushing ahead with store network expansions based on favourable retail spending data. As a result, Christchurch’s large-format retail centres, including Tower Junction, Northwood, Northlink and Homebase have very low or no vacancy.”
Canterbury retail sales increased by 5.1% in Q2 2023 compared with the same quarter in 2022. Canterbury’s retail sales growth was significantly higher than both Auckland (3.3%) and Wellington (0.9%) during the same period.
To meet the robust tenant demand, expansion projects are in the planning at both Northlink and Homebase. Carter Group’s upcoming retail project in Rolleston is also drawing attention from both national and international retailers.
Whitting observes that many tenants expanding or entering the market view New Zealand as an extension of their Australian operations, especially because New Zealanders are enthusiastic about fashion and home upgrades.
“Internationally, New Zealanders are known to spend on our homes, personal care and families, fueling local economies. This makes large cities like Christchurch an appealing choice for retailers, along with Auckland and Wellington.”
Christchurch’s efficient freight infrastructure, such as the Lyttelton Port and Rolleston inland container terminals, is also viewed as a plus among international retailers.
“It’s a very exciting time for the city’s retail market, with the main frustration being the lack of space which is delaying the entry of a number of Australian retailers. If there are good quality gaps in the market, these retailers want to fill them. They’re not feeling the pinch of the economic downturn too acutely and the appetite for expansion is still very much there.”
Australian food and beverage brands are also looking at expanding into Christchurch, with some operators which do not currently have a presence in New Zealand undertaking due diligence on hospitality spaces across the city, Whitting said.
“Christchurch has had a great boost from the return of international tourism, with the city reclaiming its position as the gateway to the South Island.”
Christchurch’s projected population growth between 2023 and 2028 also outpaces other regions in the South Island, contributing to the city’s attractiveness to retailers, she said.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2024 revenue). The company has more than 140,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves clients through four business segments: Advisory (leasing, sales, debt origination, mortgage servicing, valuations); Building Operations & Experience (facilities management, property management, flex space & experience, digital infrastructure services); Project Management (program management, project management, cost consulting); Real Estate Investments (investment management, development). Please visit our website at www.cbre.com.