Shopping centre resisting the recession, says Remarkables Park.
Bosses of Queenstown’s Remarkables Park retail and commercial centre remain surprisingly bullish over growth prospects despite the economic downturn.
Developer Alastair Porter: “Probably 75 per cent of the people served by this centre are people shopping for everyday goods, so these types of centres will hold out better in a recession than one that’s got more upmarket shops and is more reliant on the visitors coming.”
Porter’s company last year sold most of the Frankton centre to a division of Auckland-based DNZ Property Group for about $100 million.
In the deal, DNZ committed to completing three more buildings.
The first was the recently opened Dart House, which includes major tenants Postie Plus/Baby City, BNZ, Canterbury of New Zealand, Work & Income and the Southern Institute of Technology.
A second building, in front of retailer Noel Leeming, is in the planning.
Porter says he sold to DNZ because “they’ve got wider retail contacts” and it freed up time and capital for his company to plan further Remarkables Park development – that will include a private hospital, retirement village and possibly an aged-care facility.
He’s hoping Queenstown Lakes District Council will consider a plan change next year to allow more large-format stores, including a proposed 6600 sq m Pak ‘N’ Save supermarket.
Porter: “They’re larger stores and they’re about more affordable shopping, so in a recession they’ll continue to do better than the other end of the market.”
He concedes development may slow “a little” due to the downturn “but we’ll keep developing more retail east, south and west of the existing shopping area”.
Remarkables Park leasing manager Mary-Jo Hudson says vehicle counts are still rising – from 885,000 cars in 2004 to 1.43 million for the year ended November 30.
“There’s no doubt some of our retailers appealing to that ‘nice to have’ spending, that discretionary spending, are feeling it, but across the board we’ve still got growth in our sales.”
She notes the centre is 100 per cent leased on the ground floor and close to 95 per cent overall, due only to some unlet upstairs space in Dart House.
All up, the centre now houses 25 retailers occupying 22,000sq m and 18 commercial businesses covering 4000sq m of office space.
Twelve of the businesses also have interests in downtown Queenstown, such as BNZ, ASB, Flight Centre, Canterbury of NZ and Wild South, Hudson adds.
The largest store, at about 3500sq m, is the New World supermarket – and the smallest Cutting Room at 57sqm.
“We targeted pretty much bog-standard national tenants.
“They’re not some of the boutique-y stores but that will come later as we get bigger.”
All premises are leased except for the centre’s original buildings owned outright by New World, which opened first in 1999, the H & J Smith group’s H & J Smith, Mitre 10 and Element, and The Warehouse.
Hudson won’t be specific on rental prices but says “they’ve always been a lot less than [the CBD] because we’ve had bigger footprints”.
Porter believes the keys to success have been ample free parking – more than 700 spaces – and an emphasis on building design and landscaping.
“A lot of retailers think it’s all about prices of goods on their shelves but it’s really about providing an environment the community likes – because if [customers] like it, they’ll come and stay longer.”