Moving the businesses

Jeremy Tauri.

Regional housing markets still seem to be going from strength to strength. But will that heat flow into their commercial property markets, too?

CBDs around the country are struggling with uncomfortably high vacancy rates.

But while some of the smaller centres struggle to keep life in their CBDs, the bigger cities are starting to have the opposite problem. Auckland's office space vacancy rates are at record lows and rents are rising quickly. Retail vacancy rates are below 3 per cent in central Auckland. Good, affordable industrial property is hard to find in the country's biggest cities.

How can we encourage some of that to flow out a bit further to the regions with more than enough space to go around, as has happened with the residential sector?

Struggling first-home buyers have looked further afield for more affordable options, could retailers and businesses seeking office or factory space be encouraged to do the same?

What's critical is that landlords, commercial business and local governments get together to come up with some incentives within their districts to take advantage of supply shortages in neighbouring metropolitan areas.

Make it attractive for businesses to think about moving to your town. Could someone move a big firm with lots of office workers to your central business district?

If firms seeking industrial and office space move in, it will support retail. There are savings to be made by larger businesses moving to the regions - they will likely cut their rent and commutes for a start.

This involves some planning and taking stock of what's available, some development and matching the commercial needs to suit, and most certainly having the discussions with positive actions and outcomes. Over time, those who can really champion their areas should succeed.

- Jeremy Tauri is an associate at Plus Chartered Accountants.