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Innovation needed to halt grim future for Hastings retailers

Innovation needed to halt grim future for Hastings retailers

Stores going out of business and others relocating to new premises outside of the central business district, along with a general lack of interest in main street retailing has seen Hastings city retail occupancy continue to drop over the past year.

“There has been a distinct lack of demand for retail space in Hastings and the outlook is grim unless a proactive and innovative approach is developed,” says Louise Thompson, author of a six-monthly Hawke’s Bay retail occupancy survey from Logan Stone.

While tenant retail occupancy levels in Napier, Havelock North and Taradale are higher than six months ago, only Taradale is higher than a year ago. Hastings has seen a 3.6 percent drop over the same time and is 8.7 percent lower than the same time in 2014.

“Over the longer term, occupancy is decreasing in the traditional retail precincts of the region,” says Ms Thompson, citing changing retail habits and the increasing supply of competitive premises away from the retail cores.
“Along with this, the current low population growth and increased competition from online activity suggests there is little reason for occupancy levels to increase in the near future.
“Retailers are attracted to places where people are present or can easily access so regeneration and increased activity needs to happen if the occupancy trend is to be reversed.”
While local business associations, regional development entities and councils appeared to be working to resolve the apparent decline of the central business districts, this may not be enough, Ms Thompson says.
“The global trends suggest that in low-growth provincial centres, the structure of central business districts needs to change with a reduced space requirement for traditional retail business. Retail occupancy in our main centres will not improve until shoppers are attracted to the core retail precincts on a regular and repetitive basis.”
Retail occupancy in Hastings had declined to its lowest level since the survey began in the year 2000, says Ms Thompson. “We are expecting further store closures and relocations in the coming 12 months and this, combined with very limited demand for retail space, will lead to additional vacancies in the central retail core of Hastings.”
While Napier’s retail occupancy has fallen from February 2014, the trend appears to have been reversed over the past six months with a small increase in occupancy apparent in the latest survey.
Occupancy in both Havelock North and Taradale has increased over the survey period. Taradale and Havelock North continue to grow as precincts of convenience to the surrounding residential areas. Havelock North continues to attract boutique shoppers and expand its café culture, while also attracting more commercial tenants.
Consistent with international trends, boutique and convenience shopping are two key factors in attracting potential shoppers and the increase in occupancy in both Havelock North and Taradale was evidence of this, according to Ms Thompson.
While Ahuriri is not part of the survey it was providing an alternative to central Napier for hospitality, art, boutique and related traders as well as commercial offices, and Ms Thompson believes it has the potential to provide a boutique precinct comparable to Havelock North.
Relocation of commercial activities to vicinities such as Havelock North and Ahuriri was a threat to the central business districts of both Napier and Hastings, she says.
The following table provides a summary of the retail occupancy rates in the February 2015 survey:

Movement since
LocationFeb 15 ResultAug 2014Feb 2014Feb 2011
Hastings85.9% 3.6% 8.7% 11.7%
Napier87.8% 0.8% 5.7%  4.7%
Havelock North97.2% 0.5% 0.3%  0.5%
Taradale95.3% 3.1% 4.2%  1.6%

ENDS

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