Retail space squeeze eases in CBD

Retail space is getting slightly easier to come by in Auckland, but cafes, restaurants and takeaways are still the prime tenants in the city's shopping areas.

A survey by Bayleys Research shows retail vacancy rates increased slightly over the last year to 1.7 per cent after hitting a record low of 1.1 per cent the year earlier.

However, with the rate still below 2 per cent, Bayleys Research analyst Chris Dibble said the city's retail market was still strong.

Driving the overall rate up over the last 12 months was an increase in the number of empty shops on the North Shore where the strip retail vacancy rate jumped from 2 per cent to 9 per cent.

That saw North Shore record the biggest increase - up 1.1 per cent to 2.1 per cent - of all the main shopping areas the survey monitors.

Auckland City, with 48 per cent of the total number of outlets surveyed, has the highest vacancy rate of all the regions surveyed, with the figure rising 1.5 per cent to 2.2 per cent.

Higher vacancies in shopping centres and retail strips in Parnell, Ponsonby and O'Connell St had affected the rate, said Bayleys.

One in five outlets across the city were now used for cafes, restaurants and takeaway businesses after knocking clothing from the top spot last year.

Higher levels of discretionary spending on non-essential consumer goods, underpinned by the strength of the economy over the last five years, had helped this trend, Bayleys said.

Growth in the number of eating facilities in the CBD reflected increased spending by the daytime workforce and the expanding resident population.

And with apartment growth expected to continue, Bayleys suggested the number of eateries would keep growing.

Cafe numbers were also up in the suburbs, particularly coastal suburbs.

Clothing was the second largest use of retail outlets at 19 per cent throughout the city, down slightly on last year.

However, across the four regions the results were mixed with North Shore and Waitakere City recording an increase in clothing outlets while Auckland and Manukau showed a decrease.

Jewellers were back in third place after a 25 per cent increase in occupancies mainly in the Auckland City area.

Banks remained in fourth place.

In its sixth year, the Auckland Retail Report monitors vacancy levels and shop numbers in several areas including the CBD, North Shore, Waitakere and Manukau.