Retail for a golden price
According to prices listed with Pelorus Real Estate, a refurbished retail space of 280 square metres at 50 Customhouse Quay is $84,000 per year – about $300 per square metre. Just a couple blocks away, a miniscule 55 square metres in the Old Bank Arcade is listed for $46,750 per year, or about $850 per square metre. Further along Lambton Quay, another 107 square metre ground floor location is about $1,562 per square metre.
About $1,200 to $1,500 per square metre is average for the “golden mile,” according to one real estate agent who spoke to Capital Times. “Nothing on Cuba is worth anywhere near that,” he says, but, he adds, “A lot of landlords have unrealistic expectations of what their rentals should be. The tenants are changing everything.”
A tough market and issues like earthquake strengthening are giving potential lessees more bargaining power and lots of deals are being settled for prices much lower than the list values. “People are a lot more hesitant to make decisions, a lot more sceptical. It’s interesting what’s really happening,” he says.
John Milford, of Kirkcaldie and Stains, speaking for Wellington Employers’ Chamber of Commerce, says the overall health of the economy more than rental rates seems to drive retail around Lambton Quay. “When consumer spending contracts the vacancy rates get greater outside the Quay and when domestic spending increases the renting outside the Quay increases.”
It’s difficult to say whether high rents for retail affects the shopping experience in Wellington. Visitor spending in the Wellington region increased by eight percent between 2010 and 2011, according to David Perks of Positively Wellington Tourism.
“Possibly the challenge is more local, keeping New Zealanders and Wellingtonians spending in the CBD,” says Perk, and Lambton and Cuba are two distinct zones for shoppers and recent road improvements on Willis would make people more inclined to travel on foot between them. “It’s going to link all the good things about Lambton Quay to the good things on Cuba Street,” he says.
- Amanda Witherell