Commercial construction projects are likely headed for some ups and downs, with less new warehouse space being consented but some major retail work in the pipeline.
The latest building consent figures from Statistics NZ show just 92 building consents were issued throughout the country for new warehouse/storage buildings in the second quarter of this year.
That was the lowest number for that type of project since the first quarter of 2016.
Those consents provided for a total of 147,510 square metres of new warehouse/storage space which was the lowest amount of new space consented for that type of building since the fourth quarter (Q4) 2019.
The total value of building work for the new warehouse/storage space was also down sharply in the second quarter of this year at $253.5 million, compared to an average of $346.4 million over the previous four quarters.
Construction of warehouses and other storage buildings has been one of the most robust sectors of the commercial property market over the last few years driven by strong growth in commercial distribution networks, but it is too soon to say if the latest quarterly figures are the start of a declining trend or a one-off.
However while consents for new warehouse space took a dip in the second quarter, there was surge in consents for new retail premises.
A total of 118,903 square metres of new retail space was consented in the second quarter of this year, the highest in any quarter since Q3 2019 and the more the double the average in each of the previous four quarters.
The total value of that building work was $275.5 million, which was a record high for the value of retail premises ever consented in any quarter of the year.
The surge in retail consents in the second quarter mainly occurred in Auckland.
A more detailed breakdown of quarterly building consents issued for retail, warehouse, office and factory buildings, which includes the average size of projects consented and their average estimated cost per square metre, is available on our Commercial Building Consents Analysis page.
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4 Comments
Retail is dead baby. Ask any American how their local mall is performing…. same trends are being seen here.
You’d have to be a mug to put more money in to retail at the moment.
Some Malls might be dieing but they're not the totality of retail.
Based on what I'm seeing, the growth looks to be in large format, stand alone chain stores. The construction of these stores is usually guided by demographic movements or projections.
interesting retail space is booming - just as NZ goes into an economic downturn - first area hit in all recessions is retail.
Cant comment on other city centres - but Wellington and Lower Hutt seem to have a growing number of empty shops - with several large retailers/ hairdressers and cafes - closing up shop permanently. Still waiting 14 months after David Jones left Lambton key - for anybody to move into that building.
More retail space: why?
We have too much retail space now and with things moving ever-more online, that's only going to get more pronounced.
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