Two of Queenstown’s “fringe” commercial complexes are in the doldrums.
“The market is down for fringe properties,” commercial realtor Marty Barwood of Locations Realty says.
Vacancy rates at Gorge Road Retail Centre and Frankton’s Shotover Ridge Business Park appear to be as high as 20 per cent, a Mountain Scene drive-by reveals.
Gorge Rd Retail rents have dropped by as much as 40 per cent, Barwood says, to as low as $200 per square metre plus GST and outgoings – from highs of $280.
Rents on ground-floor units at Shotover Ridge have also plummeted.
“[Some landlords] would jump at getting about $10,000 per annum for them”, Barwood says – that’s as little as $125 per sq m.
“It used to be quite a lot more than that,” he says.
Gorge Rd Retail landlords are also tenant-hungry, Mary-Jo Hudson of Colliers International says: “Because there’s so much vacancy there, they’ll look at deals.”
Both agents agree the tenant profiles of Gorge Rd Retail and Shotover Ridge have changed markedly since the two complexes opened in 2002 and 2004 respectively.
“Gorge Rd Retail Centre started off as a retail centre and never stayed like that,” Hudson says. “There’s not enough retailers there to generate a lot of [shopper] volume, they haven’t got a big anchor tenant.”
Shotover Ridge has also morphed into something quite different, she says.
“It started off as a cluster of small light-industrial businesses … and is now a bit of a mixed bag. It struggles to have a target market suitable for that type of space,” Hudson says.
Both Barwood and Hudson favour Gorge Rd Retail Centre for certain types of tenant.
“It definitely has a leaning towards destination tenants,” Barwood says, citing the success of Southern Hospitality, Print Central, Queenstown Signs and Shipleys.
“Most tenants doing well [at Gorge Rd Retail Centre] require carparking and a close-to-town location but don’t require high foot traffic, relying instead on affordable rentals,” Barwood says.
Hudson sums up the two fringe commercial complexes succinctly: “These sort of places do evolve over time.”