By Bruce Stokes
NAI Harcourts Paraparaumu
The level of confidence across much of the
commercial sector is low, with most business
owners and leaders in the mindset of ‘steady
NAI Harcourts Christchurch City
Canterbury remains a market of contrasts as
the ongoing impacts of the rebuild boom and
supply/demand fluctuations continue to feature
large in the commercial market. Low business
confidence is being felt, as it is elsewhere, but
there is also a sense that better times are just
around the corner.
The new Riverside Market recently opened
to overwhelming crowds, demonstrating
the pulling power of good development and
shopper enthusiasm for the Christchurch CBD.
as it goes’ and planning on no growth or even
negative growth. The Transmission Gully
motorway opening in 2020 is expected to create
confidence, generate additional activity and
significantly cut the commute to Wellington.
The big news on the Kapiti Coast is that the
Todd Property Group has agreed to sell the
Paraparaumu Airport and surrounding land,
a total of 125 hectares, to NZPropCo Limited,
a New Zealand property investment group.
It is expected that NZPropCo Limited will
bring a new vision to the Coast, which will be
positive for growth. The news of the closure of
the Fonterra cheese factory in Paraparaumu,
should have a neutral effect on the region.
Office space in the area has been slow to lease,
resulting in numerous vacancies on the first
level of commercial buildings. We are also
seeing business owners taking advantage of the
low interest rate regime by becoming owneroccupiers.
Meanwhile construction continues apace on
the Convention Centre, Te Pae, with strong
forward bookings from the international
conference market. Two significant new hotel
developments in the CBD have also recently
been announced to support the expected
lift in visitor numbers. Ground works are
showing good progress at the Metro Sports
Centre, another key rebuild project for central
Leasing activity is slow but steady as businesses
experience significant competition for tenants
in the oversupplied office market. New statistics
will soon be out on office vacancy levels and
this data is expected to show steady take up,
and some reduction in the CBD office surplus
over the past 12 months. Meanwhile suburban
office, and particularly C and D grade space,
is expected to take a hit as tenants take
advantage of highly affordable and superior
quality new space.
Investment demand remains strong for quality
leased property in the industrial sector which is
perceived as a safer bet in uncertain times. Rent
levels have remained static with little sign of
growth since coming off their post-earthquake
peak of a few years ago. Substantial land
supply, particularly in the west, continues to
This trend is expected to continue
while interest rates remain low.
Landowners in the region are holding on to
their parcels of land and evaluating build-andlease
opportunities. The Otaki market has been
very active, with most land zoned industrial
selling quickly and prices rising quite rapidly in
the past six months.
Enquiry is slow and vacancies are on the
rise, with more small businesses closing as
opposed to opening, which is the trend in many
meet a steady but slowing demand as a trend
towards larger more efficient manufacturing
and warehousing continues.
Hospitality across the region continues its
volatile run with many tenants under pressure.
For landlords this means little prospect of rent
growth and high risk of vacancies. The story
is not much better for retail in general, with a
further shake up expected in the big box retail
and suburban mall sectors as many anchor
tenants consider their options. Competition
between the CBD and suburban malls for the
shopper’s dollar looks likely to continue. The
CBD has some momentum going at last while
others eye opportunities, including Merivale
Mall which recently announced its controversial
The NAI Harcourts team at Grenadier have been
busy with high stock levels in most sectors.
Lower earnings for many small businesses,
particularly food and hospitality, have made
this sector challenging as vendors have had
to adjust their expectations. Movement in
the accommodation, hospitality and services
businesses is providing steady turn over for the
Business Broking team.
naiharcourts.co.nz LOCAL EXPERTS, GLOBAL NETWORK. 17