The 2019 Rotorua commercial vacancy survey covers office and retail space in the Central Business District. This latest survey was undertaken in December 2019. The previous survey was carried out in December 2018.
The latest Rotorua Central Business District vacancy survey has shown a slight increase in vacancy levels for both office space and retail space. The office sector vacancy rate has increased to 16.0%. There is now 15,532m² of vacant office space compared to 2018 when the vacancies were 14,915m². Within the retail sector, there has been a slight increase in the number of vacant retail shops while the amount of vacant retail space in square metres has remained static. The retail vacancy rate is now 11.9% based on tenancy numbers with 62 vacant shops, three more than 2018.
Results since the survey began as shown in the following graph illustrate the trends for both offices and retail space.
The retail sector has remained relatively steady over the last year with a slight increase in the number of vacant shops although the amount of vacant floor space has remained static. There are now 62 vacant shops compared with 59 in 2018 and 54 in 2017. This represents a vacancy rate of 11.9%. Even though the number of vacant shops has increased, there has been virtually no change in the amount of vacant space in square metres. There is now 12,461m² of vacant retail space compared with 12,444m² in 2018 but still up on 2017 when there was 9,958m² vacant. This is similar to the 2016 vacancy of 12,052m² but below the high of 13,212m² in 2015.
The Rotorua Central Mall and Tutanekai Street are the prime retail shopping areas of Rotorua, having the highest pedestrian counts within the Rotorua CBD. The lowest vacancy rates in the Rotorua CBD currently are found in Eat Streat at the northern end of Tutanekai Street, the Rotorua Central Mall and on Fenton Street surrounding the Rotorua I-Site tourist centre.
Vacancy rates continue to be highest for properties in fringe locations away from the main strip shopping street and retail mall in side street positions.
Tenancies at Rotorua Trade Central are not included in the survey. Regarding quality of accommodation, the percentage of vacant good quality shops measured in square metres has increased slightly to 5.1% from 4.8% in the previous year. There has been a big increase in the poor quality space vacancy rate up to 23.8% from 16.0% previously. This reflects a trend toward better quality space.
We have analysed the premises presently occupied based on the type of shops operating. There has not been any noticeable discernible change in retail shop types in the past 12 months. The highest number of retail shops measured in tenancy numbers is for personal and household services being 27.9% of the total number of tenancies. This is followed by cafes, restaurants and takeaways at 22.3%, and clothing and soft goods at 10.4%. Based on floor areas the highest percentage of floor area is for Department stores at 19.8% followed by cafes, restaurants and takeaways at 17.1% and personal and household services at 15.6%.
Retail Trade Categories (% of Total Retail Floor Space)
In the office sector, the overall vacancy rate has increased slightly to 16.0% with 15,533m² of vacant space. This is slightly above 2018 results, but this is still one of the lowest office vacancy rates since the survey started in 1989. There were 51 vacant office tenancies which is the lowest number since 1997.
The amount of vacant space has increased by some 618m² compared with 14,915m² of vacant office space or a vacancy rate of 15.5% in 2018. These results show a slight levelling but generally a continuation of the general downward trend since 2009. The highest vacancy rate on record was in 2009 when 23,363m² was vacant and the vacancy rate at that time was 21.5%. Part of this trend can be attributed to the change of use for some of the larger office buildings into apartments and hotels.
The total stock has increased slightly to 97,005 m², just above the 96,044m² in 2018. The highest total office space on record was 109,437m² in 2006. This reflects a national trend that in today’s world the need for office space is generally lower than 10 years ago. While the amount of vacant space by square metres has changed a lot in the last seven years the total number of vacant tenancies has generally remained relatively steady ranging between 51 and 66. This year this has dropped to the lowest since 1997 at 51 tenancies.
Regarding the quality of accommodation, for good quality Category A space there were 3,746m² of vacant offices or a vacancy rate of 8.6% which compares with 3,994m² or 9.4% in 2018. This suggests demand and uptake of good quality space is continuing, even with the on boarding of various new office buildings in the past three years. The Category B (average quality) office space vacancy rate has however increased to 20.3% comprising 7,592m² compared with 5,439m² or 15.2% in 2018. Poor quality (Category C) space vacancies actually decreased to 4,195m² or 26.4% vacant, suggesting that adaptive re-use or redevelopment is taking place.
As 2020 begins, buyer confidence and demand still seems very strong. However tenant confidence especially in Retail is not as strong. The year brings an election, possible global and national economy challenges, all of which the effects of which are difficult to predict.
The Central Business District Vacancy Survey has been undertaken annually since 1989 by TelferYoung (Rotorua) Limited formerly Reid & Reynolds Limited. The survey does not include accommodation, residential or service station properties.
For further information, contact our commercial specialists -
T. 07 348 1059
T. 07 348 1059