Hawkes Bay values and rents under pressure

Thursday February 4 2010 - 02:51pm
The Hawkes Bay commercial property scene reflects the malaise of other main centres, according to Turley & Co’s latest market report.
Following the boom period of the 2003 to 2008 period when rentals and values rose up to 35% above former values, the number of deals has eased. Yields have risen and rents look set to remain flat or decline.
Property adviser Pat Turley sees the market stabilising during 2011, aided if listed trusts return to the market. Private investors dominate the transaction scene
The main street of Hastings is trailing Napier after a period rental growth and low vacancies until 2007.
Mr Turley says the unconsolidated Hastings central business district is a hurdle to retail vibrancy but has improved over the past decade.
Hastings prime retail vacancies were at 10 to 15 year record lows to mid-late 2007. Since that time, rentals have softened but less so for the two principal main street blocks.
The westerly-end of the main retailing area is anchored by TSB, Spec Savers and Pumpkin Patch but there are occasional vacancies. The small scale and modest frontages of some main street shops is a deterrent to national retailers.
Since mid-2009, there have been more shop vacancies on the fringe and easterly main street precinct.
Napier main street retailing, especially upper Emerson Street, also enjoyed strong rent rises well into 2008 and there were two instances of substantial key money payments by national retailers for upper Emerson Street leases. But those days are over and side-streets and fringe areas are also seeing some decline in the current conditions.
Havelock North retail rentals have become static or were softening a little by late 2009. McDonalds acquired two adjoining sites to the westerly commercial area last year with plans for the first major chain fast food outlet in Havelock North
http://www.nbr.co.nz/article/hawkes-...ressure-118007