KEY POINTS:
Auckland shopping landlords have been on a big spending spree, adding an extra 450 shops to the city in the past two years.
Stephen Holyer, leasing manager at Retail Property Group, which owns Milford and Birkenhead shopping centres, said the city's retailing scene had changed dramatically. His company is now going against the grain and repositioning its Milford shopping centre as a boutique retail site.
Holyer said Westfield's new Albany centre with 120 stores, the additional 50 shops at Westfield's Manukau centre, plus Kiwi Income Property Trust's 180-shop Sylvia Park were responsible for the bulk of the expansion in Auckland, but more shops had been added elsewhere.
He believes the time is now right to go against the big-centre expansion and offer a boutique hub. The Warehouse, Whitcoulls and a Woolworths supermarket remain as Milford's anchor tenants but fashion chains Witchery and Kimberly's, Andrea Moore and Moochi were new to the centre, Holyer said. Ecco Shoes has leased a shop, with the first retail boutique for Sally Ridge's leisure clothing and underwear brand James & August. The Homestore has also leased more than 500sq m.
Retail Property Group said last year it would spend $15 million on Milford and Birkenhead and Holyer said work at Milford was nearly finished.
Just six of the 57 shops there were yet to be leased, he said.
Bayleys Research's latest retail report said 44 shops in the Milford centre were new or had been refurbished. The centre had come under pressure lately, it found, because of its position on the North Shore with three Westfield centres in the area: Glenfield, Shore City and Albany. These were vying for shoppers' attention, Bayleys said, also calculating the extra 450-shop addition but said landlords were becoming more choosy about tenants as the retail scene got tougher.
"It has become increasingly important from an investor's point of view to have secure tenants in their retail property. Where over recent years landlords have been happy to accept an offer from the highest bidder, the focus has changed, with landlords wanting longer guarantees from a tenant they see as a long-term occupier of their space," Bayleys said.
And when times get hard, luxury retailers flourished.
"The trend that during an economic downturn luxury retailers continue to trade well is epitomised on Lower Queen St with the opening of the new Gucci store," Bayleys said.
Statistics NZ said the seasonally adjusted volume of total retail sales fell 1.2 per cent in the March quarter.
HOW MUCH?
Prime shop prices per sq m annually:
Auckland CBD $1450-$4000
Newmarket $1100-$1600
Takapuna $550-$700
Albany $350-$500
Howick $275-$400
Manukau $300-$400
Pakuranga $350-$400
Botany $350-$450
Source: Auckland retail leasing data, Bayleys Research
