The Christchurch CBD prime retail market has become the poster child for retail property in New Zealand, with high tenant demand and strong rent growth trends now well-established.
CBRE Research’s Christchurch Figures report for the fourth quarter of 2024 shows that rents for prime CBD retail space have increased for the past five consecutive quarters.
Jorge Chang Urrea, CBRE research manager, said strong demand and extremely low vacancy in retail units along the prime Cashel Mall and High St strips have resulted in significant rent growth for prime retail space.
“CBD prime retail net effective rents reached $920 per square metre in December 2024, which is five per cent higher than the September 2024 quarter. This followed even higher growth in the two previous quarters, at 6.9% and 14% respectively. Over the past year, CBD prime retail rents in Christchurch have increased by 28%,” he said.
Start your property search
This contrasts strongly with Wellington, where retail rents have either stagnated or fallen every quarter since 2019 in response to challenging trading conditions and higher vacancy.
In Auckland, prime CBD retail rents increased by 2.1% in the fourth quarter of last year, following an extended period of falling or stagnant rents.
Retail sales in Canterbury have also outperformed Auckland and the Wellington region. Sales increased by 1% in the year to September 2024 in Canterbury, while Auckland and the Wellington region both recorded negative growth.
Paris Holten, retail leasing specialist at CBRE, said that while retail has been tough nationally and hospitality also remains particularly challenging, well-capitalised brands are seeing Christchurch as a key opportunity as consumer confidence increases.
“We’re working with several retailers who are looking for the right space in Christchurch and successful brands are willing to pay higher rents to secure a presence in the CBD. Retailers are acting now to capitalise on the expected growth in retail spending as a result of the tourism rebound and the upcoming One NZ Te Kaha Stadium.”
Strong net migration and Canterbury’s population growth are further factors encouraging retailers to expand their store networks into the Christchurch CBD or move to bigger tenancies, she adds.
“Many national and international tenants see Christchurch as the right place to grow their footprints. Ongoing net migration as people move to the city from other centres is prompting strong population growth in Christchurch and neighbouring districts and this is recognised by national and international retail and hospitality brands, alongside other factors including the post-earthquake rebuild and tourism growth.”
With Cashel Mall and High Street being tightly held, tenants are now also increasingly looking at CBD fringe retail areas, said Chang Urrea.
“The low vacancy in prime retail units is resulting in good levels of demand for fringe CBD retail locations, for example Lichfield Street. CBD fringe retail rents increased by 2.9% in December 2024 compared with the third quarter, reflecting this demand.”
Holten said many retailers believe the window for locking in strategic sites is now. “Those who wait may miss opportunities, especially as demand increases for space further east along Cashel Street and in the Salt District near the stadium.”
- Supplied by CBRE
