Source: JLL Research

Bulk retail

After strong rental growth of 13.8% in 2022 for bulk retail again showed growth in 2023 of 7.8%. The demand for these spaces remains strong, especially when they are in close proximity to the larger shopping centres, which serve as attractive destinations for consumers who want the full shopping experience. An example of this is the current development of the country’s first IKEA store adjacent to the Sylvia Park shopping mall in Auckland.

Capital markets

At year-end 2023, retail property sales greater than NZD$5 million amounted to NZD$603 million, down by 30% compared to 2022 and 67% from 2021. Consequently, this decline saw the number of transactions drop to 34 in 2023, which is 13% lower compared to total transactions in 2022.

Figure 2: NZ retails transactions >$5.0M

Source: JLL Research

Offshore capital has shown a growing interest in understanding the broader New Zealand narrative and its retail market. This trend provides a firm foundation for the retail asset class as we venture into 2024. Considering our position at this time last year, there is now a cautious sense of optimism for the sector.