Wellington's Golden Mile losing lustre as shopping evolves

More than eight per cent of the Wellington region's shop space is vacant, Bayleys real estate research has revealed.

It reports a wide disparity in vacancy rates with lower levels in prime locations but the overall rate has risen from 6.5 per cent to 8.2 per cent since 2013.

Bayleys also reported a growing influence of internet shopping, growth in hospitality and service retailers and a decline in traditional retailing.

However, bulk retailing is set to grow with a proposed expansion of Wellington Airport's retail park in Rongotai and new development in west Petone.

A-grade retail property fared best with a vacancy rate of 5.3 per cent, while vacancies in B and C grade retail properties sat at 9.8 and 10.5 per cent.

The retail mix continues to be dominated by cafes, restaurants and takeaways along with clothing retailers.

Research analyst Ian Little said it was noticeable that service retail occupiers were increasing their share of space.

"Hairdressers and beauty salons are on the increase and becoming quite prolific in main retail centres."

There was a strong demand for specialist destination type retail properties but tenants were waiting until properties that met all their requirements came up.

Bayleys reported an unexpected rise in vacancies in the CBD's Lambton Quay premier retail precinct with the rate rising from 3.7 per cent in 2013 to 12.5 per cent in 2014. The increase was largely the result of earthquake damage and strengthening, and the completion of fit outs which brought premises back into the rental pool.

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Wellington's Golden Mile losing lustre as shopping evolves