New Zealand's largest "ghost town": Auckland's CBD shop vacancy rate hits national record

Comprehensive report of New Zealand Chinese Pioneer Network A real estate study shows that the vacancy rate of shops in downtown Auckland is as high as 13%, setting a national record.

Affected by the economic recession after the COVID-19 pandemic and urban railway construction, the vacancy rate in the city center continues to be high. The situation was even worse last year. In October 2023, Bayleys found that the vacancy rate of Auckland’s downtown retail stores was as high as 16.5%, while in the latest issue of “New Zealand Retail Market Update”, the current vacancy rate is still as high as 13%.

Bayleys data shows that many shops in New Zealand’s largest city, CBD, are in a worrying situation, with the most eye-catching case of closures being the large department store Smith & Caughey’s. The report also found that there were a large number of vacant stores in other parts of Auckland: the North Shore retail vacancy rate was 5%, the West Side was 2.8%, the Metropolitan area was 4.3%, and the South Side was 1.3%.

Other cities in New Zealand outperform Auckland CBD. Bayleys data shows that the retail vacancy rate of Wellington CBD is 5.3%, Tauranga is 3.9%, Hamilton is 2.6%, Christchurch is 3.3%, and Dunedin is 1.9%.

Chris Beasleigh, head of retail division of the agency, said the vacancy rates were combined with data from town and downtown, large retail properties and commercial retail properties. Bayleys noted that vacancy rates in major CBD streets in the five major cities “a significant increase”, with the most notable event being the collapse of Smith & Caughey’s, which closed the Queen St flagship store as well as the Newmarket flagship store.

JLL estimates average rents in CBD gold retail areas of $2,575 per square meter, but says the decline is slowing, noting that overall retail vacancy rate in Auckland has improved since the fourth quarter last year. In May, RNZ’s Checkpoint statistics showed that 24 shops were vacant or for rent on Broadway Street in Newmarket. Businesses say vacant buildings are not conducive to attracting customers, and the area sometimes looks like a “ghost town”.

Mark Knoff-Thomas, CEO of Newmarket Business Association, believes that Broadway now has fewer vacant stores than it was a decade ago. “The vacant stores are now concentrated in the central area, so it looks much worse than it is. We knew when Westfield opened that there would be a recovery period in the surrounding area,” he said.

He also revealed that Smith & Caughey’s plot in Newmarket has been sold and will be settled next month and plans to renovate it into a new store by the end of November. A Smith & Caughey’s spokesman said they “cannot provide more details about the Newmarket sale”.