New Zealand

New ZealandNew Zealand lies in the southwestern Pacific Ocean some 1,500km (900 miles) from Australia, and comprises North and South Islands, plus many smaller islands. It is a small market of some 4.4 million New Zealanders (informally known as Kiwis). Over three-quarters of the population live in the North Island, with one-third of the total population living in Auckland. The other main cities are Wellington, Christchurch and Hamilton.

Some 2.9 million people visited New Zealand in the year to March 2014, predominantly from Australia (1.2 million), followed from China (the largest growth market with 295,552 visitors) and the USA (226,960). Tourists spent some NZ$ 10.3 billion in 2014.

The New Zealand economy is in relative calm, against a backdrop of increasing global uncertainty. Growth will be respectable at around 3% in 2015. But the headlines will hide big shifts in the composition of growth, global influences and local policy reactions.

2015 will be a year of contrasts. The effects of the Canterbury rebuild will begin to fade, but recent increases in net migration will finally begin to drive growth. The RBNZ faces no inflation, but will be increasingly trying to cool the housing market. Cheap global money will work against these efforts. Domestic demand will be strong, but exports will suffer.

Retail spending nationally is trending upwards, having recovered from subdued levels in2012. The retail sectors experiencing strongest spending growth are mainly in the food and hospitality sectors, including supermarkets, food and beverage retailers and accommodation.

ECONOMIC INDICATORS*2012201320142015F2016F
GDP growth
Consumer spending
Total Private Investment
Unemployment rate (%)
NZ$/€ (average) 0.630.620.620.630.56
NZ$/US$ (average) 0.810.820.830.730.72
Interest rates 3-month (%)
Interest rates 10-year (%)

Note: *annual % growth rate unless otherwise indicated. E estimate F forecast
Source: Statistics New Zealand, Reserve Bank of New Zealand, New Zealand Institute of Economic Research & Westpac Institutional Bank

Population 4.58 million (2015)
GDPNZ$ 240 billion (Dec 2014)
Public sector balance -3.3 % of GDP (Dec 2014)
Parliament National-led Mixed Member Parliament (MMP)
Head of State Queen Elizabeth II
Prime Minister John Key
Election dateNovember 2017

Source: Statistics New Zealand

NEW ZEALAND2012201320142015F2016F
Retail Volume3.2%3.5%3.8%n/an/a
Retail Value4.1%2.4%3.6%4.5%5.6%

Source: NZIER

Auckland1.52 million

loading map - please wait...

New Zealand: -40.580585, 172.573242


Pak n’ Save, Countdown, New World, Nosh


Progressive Enterprises (Countdown)


Farmers, The Warehouse, K-Mart, Harvey Norman, Briscoe Group (Rebel Sports, Briscoes)


Gucci, Louis Vuitton, M.A.C, The Body Shop, Kathmandu, Nike, Adidas, Esprit, Apple, Michael Hill, Cotton On

Food & Beverage Operators

McDonalds, Burger King, Wagamama, Starbucks, Domino’s, Wendy’s, Pizza Hut, Subway, Dunkin’ Donuts, Carl’s Jr.


New Zealand has a heavy weighting towards shopping center retail, with only the most well-established strip retail areas outperforming their large-format counterparts. Total shopping center retail stock is approximately 1.74 million square meters of rentable area. The dominant format is department-store anchored centers with a good supply of national or international chains, usually organised in a precinct format.

Large format, or bulk retail, is another popular retail format, with the many homeware retailers that bulk retail accommodates supported by a population with a keen interest in residential investment. Bulk retail centers are popular and are usually accompanied by a food and beverage offering.

New Zealand’s retail market is becoming more diverse as an increasing number of international retailers, particularly well known international brands, are looking at New Zealand as a market with enough population density to support a store. This has become increasingly evident given New Zealand’s relatively strong economic situation.

New Zealand has a mature factory outlet centre market, which is an established and popular aspect of the retail market.

E-commerce is developing rapidly in the New Zealand market with burgeoning usage of multi-channel strategies including internet and mobile retail. Robust competition from international retailers has added another facet to the market in New Zealand as a strong currency makes international online shopping increasingly affordable. Other contributing factors are the high level of internet penetration, high levels of credit and debit card usage, rising levels of confidence in security.

It is possible to enter the New Zealand retail market direct, though many also franchise and enter via concessions/shop-in-shops.

There are no restrictions on foreign companies either buying or leasing property in New Zealand, for most classes of property. It is generally believed that the New Zealand lease structure is more orientated toward landlord than tenant: but recently landlords have become more amenable to tenant requests.

Although it is possible to occupy a new building within a few weeks, it is more realistic to expect that on average it will take 6-9 months from starting the property search to taking occupation of an existing property.  This includes time for considering location options, the identification of buildings or sites, negotiating leasehold or freehold terms, drafting of the appropriate legal documentation and completing fitout, if required.


New Entrants to the Market

Seed HeritageDKNYTop ShopZaraJamie’s Italian

Top Shopping Centers of New Zealand

Sylvia ParkAuckland71,2672006
Westfield RiccartonChristchurch55,3731965
Botany Town CentreAuckland57,5442001
Westfield AlbanyAuckland53.3262007
Westfield QueengateWellington51,2721986
Westfield ManukauAuckland45,5381976
CoastlandsKapiti Coast42,2522012 (remodeled)
NZRPG WestgateAuckland44,9041998
Westfield St LukesAuckland39,7931971

Lease TermsLease terms in New Zealand are traditionally for between six and eight years as an initial term. It is common for the lease to include rights of renewal. There are typically two rights of renewal offered and they are usually for the same term as the lease. In the current economic climate, it is common for incentives to be offered in order for a leasing deal to be completed. Common incentives are either a cash payment from landlord to incoming tenant or for a rent-free period, which is typically one month per year of lease term certain. Incentives are negotiable though and vary depending on quality premises. The use of incentives is a far divergence of the pre-recession conditions whereby tenants were commonly paying key money to secure prime premises.
Rental PaymentRent is paid monthly in advance with a two month deposit required upfront. Turnover rent is not common in general retail lease deals, although it is prevalent in supermarket leases. In shopping centres, tenants are typically required to pay a sizable base rent as well a percentage-of-turnover rent. Guarantees and bank bonds are not normally required for national or multinational tenants – company guarantees will usually suffice. For independent retailers, a guarantee is a requirement.
Rent ReviewBoth market and CPI reviews are used equally and occasionally in conjunction, as in the review mechanism will be by CPI or to market ‘whichever is greater’. Given the prevalence of the Auckland District Law Society (ADLS) lease, most have a soft ratchet clause, whereby the rent can decrease at review, but never below the initial rental determined at the outset of the current term.
Operating Expenses (OPEX)A service charge is usually payable in multi-tenanted buildings and covers management fees, security, cleaning, landscaping, internal maintenance of common parts, external maintenance and insurance, servicing of elevators, water, heating, air conditioning, management fees and property taxes. It excludes internal maintenance and insurance of rented accommodation, utility charges and GST. The landlord is responsible for external/structural matters in shopping centres (charged back via service charge) or tenant (except in multi-let buildings). The tenant is responsible for internal matters. The landlord usually insures the main structure and external fabric but will charge this back to the tenant. Insurance for common parts is also paid by the landlord and charged back. The tenant usually pays for internal insurance directly.
RatesThe local government authority charges rates, the local property tax, which is payable on commercial property. The local government authority resets the rateable value of the property every three to four years, depending on the area. With respect to payment, the tenant will pay a fair proportion of rates (including, without limitation, the relevant local authority rates) which is calculated as the fair market value of the premises as a proportion of the fair market value of the property. The fair market values of the premises and the property respectively must be agreed between the parties.
Disposal of a LeaseSub-letting is usually possible under the terms of the lease, subject to landlord’s approval. Assignment rights are not normally barred in the lease but will also be subject to consent – which should not be unreasonably withheld. At lease end, the tenant is not obliged to re-instate the premises to the same condition as at the start of the lease. All tenant improvements must be approved by the landlord subject to the alteration covenant in the lease and in accordance with local authority planning rules and regulations. Older leases may have Privity of Contract whereby all former lessees can be held liable for any default by a later tenant under the same lease. In this situation, the same reinstatement of premises clauses would apply.
Valuation MethodsShops are valued on a 'zoning' basis, using unit metre frontage rates. The retail zoning principle recognises that the area at the front of the shop, adjacent to its primary window frontage is the most valuable in rental terms. The rate per square metre is then assessed on a reducing percentage of the shop frontage rate, using a calculation based on the shop’s depth, Upper and lower sales floors are similarly valued as a proportion of the shop frontage rate. There will occasionally be local variations to these rates, which will also depend on the quality and functionality of the accommodation, relative to the market norm. For corner units, it is usual to add a small percentage to the value of the ground floor, the amount of which will depend on the degree of overall prominence.
LegislationProperty Law Act 2007, in effect from 1 January 2008. A deed of lease must be in writing, executed by signing by an individual and witnessed, and delivered. There are two standard commercial lease documents used – the ADLS lease and the Property Council of New Zealand (PCNZ) Shopping Centre lease. It is common for an Agreement to Lease is used as the negotiating document prior to the final terms of the Deed of Lease being determined and signed.