An interesting article yesterday on what is happening in the retail building market in central Auckland.

Cruise ship passengers and Auckland shoppers are providing the impetus for the redevelopment and popularity of the lower Queen St retail area, says Nilesh Patel, associate director of retail services at CBRE.

Following AMP Capital’s announced refurbishment of the lobby and ground floor level of its 15-storey tower building at 45 Queen St, to be occupied by international brands Christian Dior, Prada and Swarovski as well as ANZ bank, two new high-profile retailers are moving into the area.

Patel says that Johnstons of Elgin, a high-quality British brand noted for fine woollen and cashmere cloth, clothing and accessories will open its doors at 90 Queen St in October.

“This will be its first store in the New Zealand market, which is a strong indicator of the attractive nature of Auckland’s retail sector,” Patel says.

“We’re also going to see T2, the boutique tea shop, open at 87-93 Queen St right next to the existing Mont Blanc store, which will add to the increased quality of tenants in the lower part of Auckland’s main street.

It seems that the lower part of Queen St and some of its surrounds are really becoming the hub of high end retail in Auckland. Other big name brands already in the short section of Queen St between Fort and Customs St include Louis Vuitton and Gucci and Mont Blanc. Along with this there has also been some pretty stunning other changes like the upgrade of Fort St and neighbouring streets which has been a massive success on every level, particularly in hospitality which is up 400% on what it was before the upgrade. Some other awesome developments include the likes of Imperial Lane which links Queen St to Fort Lane.

The Imperial by Fearon Hay Architects
The Imperial by Fearon Hay Architects

So what’s causing all of these high end retailers to move to this location, why not instead be located further up Queen St, on High, in Newmarket or even out in a mall in the suburbs?

“The most recent pedestrian count data from the Property Institute show a healthy foot traffic picture, with numbers increasing to multi-years peaks at the lower end of Queen St and at their highest levels since 2009,” he says.

“It’s been a good five to six years since we’ve seen activity of this level in Auckland’s retail property sector. There was strong activity before the global financial crisis but we certainly haven’t seen the market behave like this since at least 2008.”

Patel says changes to pedestrian and vehicular traffic mean there are more shoppers on foot, and more people in the downtown area, including in Fort St where the streetscape has been redeveloped to make it more pedestrian friendly.

So the simple answer is people, and lots of them. Make it nicer and easier for people to walk and around the city and they will do so – who knows, they may even buy stuff. Wow, who would have thought that.

The article also notes that another aspect that is helping this area of town are the cruise ship passengers visiting the city with numbers increasing from 19,400 in 1996-97 to 214,000 in 2011-12 although considering about 50,000 people walk past here every weekday, the cruise passengers are a likely to be a very small number overall. Of course one of the biggest aspects that would have helped in increasing the number of people walking in the city centre, but one that isn’t mentioned in the article has been the increase in the use of public transport. We know that in the morning peak alone there are now over 34,000 people getting off buses, trains or ferries somewhere in the CBD which is up from about 21,000 in 2001. At the same time the number of vehicles entering the CBD has decreased by about 6,000.

Now it won’t just be PT that has driven this change, the revitalisation of other areas including the Britomart precinct, the other shared spaces, the viaduct and a little further away Wynyard have all helped to start making the city more attractive and inviting. All of this doesn’t help building rental prices though.

Patel says the redevelopment of lower Queen St is also driven by the popularity of the harbour area including the Britomart precinct and pedestrian access to the ferry terminal and Britomart Transport Centre.

“All these factors are having an impact on retail rents,” he says. “It’s noteworthy that the collective shift towards the bottom of the city isn’t necessarily being pushed by retailer capital or the Kiwi economy – it’s more about the lack of availability of properties. As a result we are seeing rents being forced up, with lease terms typically six years or more, incentives dropping and core vacancy levels dropping.”

Patel says there are also some clear and noteworthy rent distinctions appearing along Queen St: “Between Fort St and Customs St we are seeing rents average between $2500 to $3500 per sq m; from Victoria St down to the eastern end of Fort St we are seeing around $2000 to $2500 per sq m; and from Victoria St to Wellesley St it comes down to $1500-$2000 per sq m.”

With Electrification, the new bus network and other PT developments that are all meant to dramatically increase patronage I imagine the current trends will only continue. I guess if you are a building owner in lower Queen St you will be very happy with what is happening.

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82 comments

        1. That post of Patrick’s (“Why are there cars on Queen St”) is still one of my favourites. Was a real eye-opener about the lack of entrances, ramps, etc.

          Its depressing to think that 2yrs on (almost exactly) nothing has changed. Why? Arguments around lack of political will don’t seem right – who would argue? There aren’t many car parks that would be lost for retailers to complain about. When you consider the improvement in vehicle flow east-west its even more perplexing.

          The problem with Mayor Len and his council is that they draw lovely pictures about what they ant the CBD to look like, but don’t seem to act on them. CRL aside.

        2. They should try this out over summer using temporary bollards etc. 3mths, say Dec-Feb. That would justify changes to light phasings etc.

          Imagine how busy it would get in the xmas shopping rush and with the summer weather – alfresco dining, etc

        1. as far as I can tell the main reason there hasn’t been significant work on Queen St in the last couple of years is that there was a significant excercise under Auckland City Council renewing Queen St around 6-7 years ago, footpaths were widened and parking reduced, but two traffic lanes stayed in place

          that revamp is still well within its life cycle making another major change unlikely for a few years yet, but I imagine that private vehicles will not get such priority next time around

  1. Cruise ships will play a bigger role than you have indicated, although they might be a small percentage of overall foot traffic, I think you’ll find they are more likely to buy items, especially in these high end market retail stores. These stores are close to the wharf and are a easy shopping destination after they have completed their daily ventures around Auckland. Plus they are on holiday, and you tend to buy stuff when on holiday.

  2. Ahh, T2. I loved it when I discovered one of their Melbourne shops, then was briefly delighted to learn they had a store in Auckland, before being gutted upon finding out it was way out in Botany. It closed a couple of years ago.

    Ecstatic that it’s coming back, and accessible this time!

    1. exactly. Let T2 be a lesson to specialist overseas retailers looking to invest in Auckland: The city centre is where its at for specialist shopping. Even Newmarket is a sickly shadow in comparison to what’s on offer in the city centre. Maybe people are cottoning on to the fact that malls are full of generic crap?

      Aside from general trends, one has to wonder whether our recent pedestrian volumes are at least partly due to the excellent summer and mild winter weather we’ve had in the last wee while … I suspect such weather favours precincts like Queen.

  3. I admit I am personally not the target customer for stores such as Gucci or Dior but I very much welcome the move to more upmarket retailers in this part of town.

    The last time I took overseas visitors down Queen Street I found it faintly embarrassing walking past the many tourist trinket shops and while my guests were polite about it I could see they were not hugely impressed. There may be a market for these but I feel that the CBD is definitely over supplied.

    Queen Street’s name, alone, suggests something a bit more glamorous than we currently have.

    1. Completely agree.

      Poncy luxury stores a city do not maketh, but an absence of such stores (and a preponderance of $2 stores) is not good either.

  4. Hmm, I feel like I’m reading two different stories here. On one hand we have the retail guy saying the the numbers are back up to pre recession numbers and that availability is pushing shops further down the street yet on the other hand the PT guy is saying that it’s due to increased numbers of people taking the bus or train to work.

    In the end I would say it’s a combination of the two however the fare greater cause would be the available money people have to spend.

    In regards to cruise ship travelers, although small in number apparently on average they spend about $1k a day on shore. Compared with your average bus or train passenger who may only spend $20 a day on average and is unlikely to pick up a $3k handbag on the way to work.

    1. I suspect that both recovery from recession and increased foot traffic is driving the general retail boost in the precinct, especially the hospo stats. That’s due to a number of factors but the council spending millions to tart up the area is surely one of them, as is more people moving through the precinct using public transport, and the number of new offices and apartments that have gone in (pretty sure those have a lot to do with the transport terminal too, I doubt a new jumbo car park on the waterfront would have had the same effect)

      The Bulgari and Louis Vuitton boutiques are a second order factor, they respond to the fancy streets capes and ride on the coat tails of a thriving upmarket retail district, but no workaday commuters aren’t buying new handbags for their chihuahuas

  5. I suspect the move to High End retail is because people like to feel the merchandise before they buy at that end of the market. Like SF Im pretty sure the typical designer store customer isn’t popping in on there way to the bus/train at Britomart.
    The global trend in retail seems to be high streets like Queen being deserted of retail in favour of Westfield type Malls or people shopping online, maybe Auckland is bucking the tend however every time I go into Queen street I am surprised at how quiet it is for people and traffic. I mean, we still have intersections that allow peds to cross diagonally. Its not Times Square or Piccadilly circus is it 🙁

    1. “however every time I go into Queen street I am surprised at how quiet it is for people and traffic. I mean, we still have intersections that allow peds to cross diagonally.”

      This comment just, just boggles me. Those intersections (“barn’s dances”) are there to ALLOW people to cross diagonally, and are double-phased for pedestrians, to make it better for pedestrians. They are not a concession given because there were few enough cars there to throw a few crumbs to pedestrians, they were hard-fought-for, against years and years of traffic planner’s opposition (and after almost all having been ripped out in the 1990s*, and are a calculated reduction in car convenience in favour of pedestrians.

      *Just read this article from a decade back

      http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=205462

    2. Intersections that allow peds to cross diagonally… you mean like the one in front of Shinjuku Station in Japan that is used by 3.64 million people every day?

        1. With many, many years spent living in Tokyo, I can say with hand on heart, that pic is definitely not Shinjuku, its Shibuya Kousaten (Shibuya Crossing). jp is absolutely right, there are no diagonal crossings in front of either Shinjuku Station’s East or West Exit points. The only sizeable diagonal crossing in Tokyo used by literally millions of people every day is the crossing outside the Hachiko exit of JR Shibuya Station.

          We could do with a decent design for line markings for the diagonal crossing points at Queen/Wellesley, Queen/Victoria, and Queen/Customs. Follow Shibuya Kousaten’s lead and put in lots of zebra crossing lines. Yes, you have to repaint them but Nippon Paint have developed a pedestrian crossing paint coating for heavy traffic areas like Shibuya Kousaten that only requires a repaint once every 10 years. Make our three diagonal ped crossing points in the AKL CBD, iconic places. More lines, more lines!

        2. We’ll I take you guys word for it, I’ve never been to Japan… but hey Shibuya with a mere couple of million daily users is fine by me!

        3. And yet most cities wouldnt dream of having diagonal or ‘scramble’ crossings. They definately contribute to congestion and they can be dangerous as people invariable run the light down and end up in the middle of a busy intersection thats just gone green to cars.
          That aside, the CBD of Auckland is pretty quiet, as you would expect from its population and geographical location.

        4. “Make our three diagonal ped crossing points in the AKL CBD”

          I can think of far more than that.

          There are at least 5 on queen st, a further 2 on wellesley, one at the uni, and one at the end of victoria by Albert Park, agreed with the ida though.

          @Phil “They definately contribute to congestion” Why is this a problem? They significantly ease pedestrian congestion at the expense of vehicles, in heavy pedestrian areas this is obviously the best solution, and I would think that downtown qualifies as that.

    3. Downtown is so much more interesting. The changes in architecture, the variety of high end, low end (including food) and the ability to just carry on walking to the Viaduct or Wynyard etc. Combined with PT accessibility, it’s much more alluring than a mall.

    4. Don’t be so sure about those global trends in retail, Phil; you may be right to some extent for Europe, where historically they’ve had few malls, and as such there has been more mall-type development compared with the high street.
      For New Zealand – Auckland in particular – I see the trends as being a bit different, and while there are still some mall-type projects in the planning stages around the place, the balance between malls and the high street is by no means one-way.
      Queen St has the highest rents in New Zealand, higher than even the top malls. As the CBD continues to grow its resident and working populations, and tourism, I expect more rapid sales growth there than for most Auckland malls.

      1. You make an interesting point on the growth of residents in the CBD. For sure that will help retail and change the city, imo, for the better.
        What I would like to see is a fully pedestrian Queen Street. We could run a tram from Britomart up Queen Street, Along Krd and Ponsonby and back to Britomart via Wynard qtr. That would move quite a few people around the CBD and be a nice supliment to the CRL even if its pax are likely to be more shoppers and city residents than commuters.
        It would also mean we could have more restaurants and bars with outside seating. That always seems to liven up city areas and while I am far from anti car, there is no reason for cars to have to use Queen Street.
        Hopefully by making Queen Street more attractive it will become a place to linger rather than transit. That will make retailers happy and encourage more investment, beyond the Asian souvonair shops.

        1. Thanks for the link. I agree totally except Id roll it all the way to the top of Queen St. If ever there was a part of Auckland that needed a face lift its uphill after 246. Apart from S&C, the Civic and the Old Town Hall Queen Street is a dog once you get past Victoria St. One of the nicest buildings in upper Queen street is a lap dance bar 🙁
          Also moving the cars out of Queen street would be quite easy, puting in a tram loop would be quite cheap, and the spin off benefits of Queen, KRoad, and Ponsonby would be huge. Im all for this sort of plan, its affordable and gives an immediate improvement that other projects cant deliver for many years and billions to come.

        2. Who are you and what have you done with Phil?

          Completely agree with that loop though, that is how I would prefer we do our trams to start with rather than Dom road.

  6. The city’s major transport hub is also there. Kind of obvious that the follow on would be that businesses would thrive around there

  7. My understanding is that the council have wanted to remove cars from Queen street for years but property owners haven’t let them. What I don’t understand is why the council didn’t just leave Queen Street as a main road as wanted by the property owners and instead make Albert Street or similar a pedestrian mall. If they had done that 10 years ago, Queen Street would be dead (the property owners would now be begging for cars to be removed) and we would have a great pedestrian main street!
    On a similar subject, Auckland Transport are not putting 24 hour bus lanes down Dominion road because the property owners don’t like it. A friend in AT told me that the council have a legal obligation to listen to property owners and pretty much do whatever they say. How ridiculous! Why can’t the council be responsible for planning Auckland instead of property owners and the government?

    1. Exactly. They very retailers on High St who prevented it becoming a Shared Space leading to the curbed and still car dominant refurb of a couple of years ago are now petitioning the Council to come back and do it all over into a Shared Space! While O’Connell and Freyberg Sq are about to be done the Council can’t justify redoing High St so soon. Retailers are so often their own worst enemy.

      1. However, rather than rub it in, why not take a proactive approach, add some Janette Sadik-Khan pixie dust, in the form of planters, paint and bollards (cheap as) and make the place better for people. If the retailers have changed their minds, who are we to hold them back now? They just can’t have the ‘gold plated’ version yet.

      2. The same retailers who banged on about how their custom would be negatively affected by not having front-row seats for cars? Guess they’ve also started to note the striking discrepancy between the average High St customer and the type of vehicles parked there most of the day. I agree with Bryce P, a bit of proactiveness on the retailers’ part could be quite beneficial in the interim; maybe start by having those parklets from a while ago as a more permanent thing.

      1. I’m a ratepayer and I want a 24 hour bus lane down Dominion Road like a lot of other rate payers do. Yes the council should listen to rate payers – but they shouldn’t be mandated to put the interests of shop owners ahead of the interests of the general public.

  8. It will be interesting to see if Aotea station creates a similar effect once it opens.
    I can imagine Aotea square buzzing in a few years time.

    1. It will be busier than Britomart; and drive a retail boom midtown. Hopefully they won’t underbuild the station trying to cut costs and keep following the same hopeless models that start with the standard assumptions that no one actually will use it….

      1. Dare I say it, but they should consider doing Aotea station as a PPP and let someone like MTR Corp of Hong Kong do it. THey are masters of integrating stations and retailing in urban areas. They built half the HK metro for free from the development rights.

        1. Based on what I experienced in HK, if AT and AC do not have the expertise then, yes, that’s a PPP I would go for.

        2. The PPP format is not always ideal (see Australia infrastructure disasters…), but the concept of private-sector involvement is a good one.

          Be it MTR Corp, or be it the Japanese private railway operators, some sort of involvement (consultancy?) from a company that understands station dynamics would be valuable in getting the project built the right way. Similar to MTR, the Japanese private lines long ago worked out that the key is creating a market by driving pedestrian traffic. Facilities can start out basic as long as the ped flow is there, which then drives revenue for improvements.

          The massive ped flow in Tokyo Nick R alluded to above is evidence of that.

        3. The problem with the Australian PPP infrastructure projects is that they were premised on ever increasing traffic numbers, which this blog and countless other sources have shown is a false projection.

          Aotea Square will be based on PT ridership projections which NZ always under values (e.g. Britomart, Northern Busway). Both of those have exceeded expectations (despite certain people thinking that Aucklanders love their cars and wont use PT) so I would imagine any smart company invited to participate in a PT PPP would take notice of that.

  9. I’m on the BC of the Dilworth building and massively frustrated by the quality of (most of the) stores we host. We have no control though, it’s up to the owners who have no vision beyond their investment return. Tarocash and the Jade place are excellent, the rest are pretty mangy. It’s sad when replacing one of the terrible tourist shops with a Burger Fuel is preferable… But when the pretty average Dingwall gets T2 and Mont Blanc and the soulless 45 Queen street gets the ones mentioned in the article it cuts pretty deep.

    Anyone have any ideas on what I can do to convince unit owners to have some vision? Are there any laws about controlling store frontages/appearance, especially for heritage buildings? We’re going to improve/replace the awnings back to their original (1920s) design ahead of other major (needed) works to make them happy, but still, they can’t see past cheap trinket stores. Why not Pauanesia?!

    /rant

    1. Talking about appearances – the very first thing that I always notice when walking near this building (and others) is the proliferance of signs, the ones hanging from the awnings, especially at the Customs St side. Most places succesful at attracting desirable tenants -appear- to have them in lower quantities and they are less intruding and cluttering. I always compare them to vendors you see overseas, trying to lure people into their shops by sweet-talking or even grabbing you – highly annoying. Whenever I encounter a building tainted with this “sign blight” and screaming for attention my first thought is, without looking at what’s actually there, that it’s going to be a collection of $2 stores, tourist shops, dairies etc. and move my attention to something that appears more worthwhile.

      /my rant

      I hope more suitable tenants will find their way there though. Good luck.

  10. Could it be the level of traffic volumes along Customs St compared to Queen St? Customs St doesn’t ‘draw me in’ the same way Queen St does.

    1. It’s a pretty busy stretch still, but probably not the main route between Queen St and the new Commerce Street/Britomart areas (which are obviously very nice now) because Fort Sstreet takes that role. Just positioning I guess. Maybe if it was all a bit less dire and Custom’s street was less awful…. :<

      1. The bus stop / loading bay and left turn lane into Queen St make for a pretty unpleasant landscape, especially if there is a bus or truck there idling so close to the footpath. Loose those and take the lane for ‘other uses’ and some greenery would improve matters I feel.

        1. Mmmh, Customs Street will remain one of the two main “car drags” for the City Centre, according to the projects now being developed out of the City Centre Masterplan. I guess after downgrading both Quay Street and Victoria Street for more ped / cycle / PT purposes, at least the odd street will have to remain with a car focus. So Queen Street seems like your better bet.

        2. That may be so, but if lower Queen St is to be pedestrianised traffic will be confined to an east-west direction on Customs, which creates an opportunity to take out lanes currently used for turning only and use that space for placemaking; I wouldn’t expect alfresco dining here, but landscaping and wider footpaths would go a long way to improving Customs St.

        3. Doesn’t mean Customs St needs to stay a dog though, there is a lot that can be done to improve a street that still maintains a strong vehicular traffic function.

        4. Closing Lower Queen St negates the need for that left turn lane right away. There is also a transport hub across the road. Does that bus stop really need to be one Customs (Q St side)?

        5. “Closing Lower Queen St negates the need for that left turn lane right away. There is also a transport hub across the road. Does that bus stop really need to be one Customs (Q St side)?”

          In the short term? Yes. Bus stops at and around Britomart have been in extremely short supply compared to actual buses using them for many years. I understand there’s some plans to consolidate, but you will keep needing a lot of stops & space.

        6. That bus stop is where the Inner Link stops. Even if you could stick it somewhere else around Britomart, and I doubt you could, would you want to send those buses on a Tiki Tour on and off Customs St?

  11. Really need to expand the pedestrian improvement works.
    Just realised today how bad Shortland St is. Apart from the Queen St crossing there are no pedestrian crossings, and only little pathetic refuge.
    There is nothing at all where High St meets Jean Batten Place which has very high pedestrian volumes.
    Swanson St is another sitter for becoming a shared space.
    And yes Customs St is a dreadful barrier, but guess is all tied up in the Masterplan studies for East-West traffic in the CBD, so might have to wait if we want a long term outcome here.

    1. “There is nothing at all where High St meets Jean Batten Place ”

      I cant believe that area has stayed without traffic calming or pedestrian facilities. It is an accident waiting to happen and belies the claim by traffic engineers that safety is their number one consideration. The only consideration is capacity for motor vehicles.

      Once High Street is made into a shared space that through route to Jena Batten Place will be even busier. I actually think the best option is to close off Shortland Street and have that whole area as a shared space.

      Radical I know, but why not? The other end of Shortland Street is Princes Street which goes to the motorway – why does it need access to Queen Street? Imagine how busy that part of town would be with that whole area a shared space.

        1. Clearly the key to fixing lower Shortland is the removal of private vehicles from Queen St. The bottom of Shortland then clearly becomes a Shared Space like Fort, with much reduced traffic presence as it will no longer be a through route expect for delivery vehicles in controlled times and in emergencies. Sorted.

        2. Planters, bollards and paint. Let’s stop gold plating and get more done. Come back and make it pretty later.

      1. Pedestrianise – Shortland Street between Queen St and O’Connell St (includes pedestrianisation of High St)
        Shared space – Shortland Street between O’Connell St and Fields Ln. Right turn only for vehicles exiting O’Connell St onto Shortland Street and the Shortland Street lane heading west ends and turns into Fields Ln.

        1. I agree, pull the ‘normal road’ right back to Fields Lane. There are zero driveways, loading docks or parking buildings on Shortland between Fields and Queen, so no reason for vehicles to use it except kerbside parking or as a through route.

          People wanting to drive from Shortland St to Queen St would have to bypass the core and drive via Fields/Bacons then Kitchener and on to Victoria St.

          A good move there would be to make the southern part of Kitchener St one lane each way (instead of two lanes northbound). Then that path could function as a bypass to the east of the CBD core (it would also link four or five major carpark buildings to the motorway via Wellelsey St).

        2. Need to start thinking about why the shared spaces need car access at all, outside of deliveries.
          Jean Batten Place is used as a rat run, especially by taxis and couriers. There are no loading docks there at all.
          Elliott St also has issues being used as a rat-run to access the carparks at the northern end. As deliveries are only allowed between 6am and 11am anyway, can close the southern half, and Darby St to all cars except deliveries.
          I guess part of the issue with bollards is they often need to be manned. However maybe retailers and regular delivery trucks could be issued with sensors, or RFID cards that allow them to lower the barriers when need be.

        3. Luke as the de-carring spreads the pressure will come off these spaces. For the CBD, Queen St is key. Take that out as a route and Shortland, Jen B, Fort, Elliott, Darby, will all calm down. We just need to keep spreading the love!

  12. Absolutely it’s the transport hub leading to increased pedestrian count in the area attracting retail stores and investment. It’s a no-brainer (for those with a brain). Adding to this are developments such as the britomart prcinct apartments and other residential developments. I’ve moved into the city and I won’t be moving back to the suburbs again. There’s a few issues but it’s brilliant.

  13. Having a very good idea about these shops I can say that the main reason for their uptake isnt cruiseships but Asians that has moved to Auckland and their visitors. One of the high end French brands had close to 80% of their clients being identified as East Asian. they might arrive through public transport but its as likely that they are found in the parking gaanges etc.

    With migration into Auckland we see new purchasing patterns emerge. the old agrarian kiwis didnt want to spend their hard earned money at luxury boutiques down Queen Street. the new urban population in Auckland, greatly affected by European trends, fashion and shopping habits are much more likely to be interested in this. Add on that the East Asians use European brands as status symbols and we have a greater incentive for these shops to open up here.
    We have seen the same happen with cars. No one believes a new Holden Commodore is a cool car anymore, today we speak about BMW:s, Mercs and the likes.

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