Skip to main content

2018 - A competitive year ahead for retail and retirement villages

Paul Keane
Kiwi Shoe Polish

It’s been a great summer and holiday period, in fact despite a couple of stormy days just after the start of the New Year, one could say the holiday break has been outstanding.

I did a bit of reading over the break and included in that was a book given to me which reflected on some traditional Kiwiana. It got me thinking and reflecting and I thought I would share with you some highlights of some of the Kiwiana which I related to and also some thoughts on what may be ahead for us in 2018.

I recall Sir Edmund Hillary climbing Mount Everest and the excitement generated in New Zealand from this event which was all over the radio waves that we glued our ears to. Dominion Bitter was the drink of the 1950s and beyond and I recall the 6 o’clock swill which restricted drinking in bars until just 6pm. I recall Milk Bars which offered ice cream sundaes and milkshakes and were the gathering places for teenagers.

 

buzzy bee

"I recall the use of Kiwi Boot Polish and my Dad using it every morning to polish his boots, the brand is still about to this day."

I recall drinking milk out of a glass bottle at school through a straw and also the cream that had curdled at the top. I recall going to the Dental Clinic Nurse at the "murder house" as it was called. I recall the quarter acre section that we all aspired to and the weekly need to "mow the lawns". I recall the "Edmonds Baking Powder tin" and the fact that my older brother used it to store his money in which was then borrowed with IOUs from my sisters. I recall the "Four Square" stores and the friendly neighbourly treatment received from the owners who effectively invented a "credit system". I recall sport on Saturdays and the thrill of having our parent’s watch you score that important try or hit the winning runs. I recall the train rides to Auckland and the NZR cups that were unbreakable and of course the Tangiwai disaster which took the life of one of my school friends.

"Great recollections and all without the use of an iPad or an iPhone!! So what's up for 2018?"

I think it will be known as the year of the shopping centre decline, the year of improved profit sharing in retirement Villages, and the rise of women in industry.

Major shopping centres will flourish, however the pressure on securing quality tenants will be a major challenge and expertise in retail planning will be a dominant factor in the success of this industry. By retail planning, I don't mean pretty stores and images, but rather the ability to select retailers who can offer a point of difference in a challenging competitive market. Certainly second or third tier shopping centres will be at risk and their property values are likely to decline as a result. No retailer can be considered a secure tenant give the competitive and changing nature of that industry.

Retirement Villages will continue to prosper and grow in popularity. However, there will be a more detailed watch on costs by purchasers as to the development margin and its sharing into the future. No longer will purchasers in Retirement Villages be satisfied to simply accept what they offer without question and will debate the sharing of profits. Certainly, huge profits to the Village Owners will be a point of debate.

Certainly, women will dominate 2018 with an "attitude" towards equality and management skills. This year more than ever will women demonstrate their prowess in all levels of business activities and their competitive natures. This will be apparent in all levels of activities and even in areas that have previously been dominated by males.

So welcome to 2018, we wish you well. Maybe, we can pause from time to time and "recall" what it was like in the past. Time to think and reflect is good for all of us, and in doing so, maybe dispense with the iPad or iPhone for a while!!

Sharewatch | Auckland Airport

It’s been years since Share Watch has written about Auckland Airport, but they’re sure keeping busy. Passenger numbers hit 19 million in 2017, up 35% on five years ago (and they continue to grow).

The airport owns 1,500 hectares of land, and a growing range of hotels, offices, shops and other facilities. Their investment properties are now worth $1.3 billion, and they’re spending more than $50 million each year on adding to them.

The international and domestic terminals contain thousands of square metres of retail space, trading at very high levels. Auckland Airport has been in a near-constant state of renovation and expansion for this space, and is currently working on the main moneymaker – the international departures area. Revenue rose 3.4% for the year. This will “deliver a 65% increase in [retail] area” there

Auckland Airport brings in more than $160 million a year from “retail income” (tenants in its terminals), and another $56 million from parking revenue. These revenue streams, plus $68 million in rental from other properties across its land, helped to boost the airport’s revenue to $623 million in the last year.

Auckland Airport

 

In the press

Local media highlights Monday 8 January to Monday 15 January 2018

 

Office towers sell in biggest property deal Auckland city centre since 2010

Two Queen Street office towers have sold to an overseas buyer in what is being billed as the biggest property deal in Auckland's central business district since 2010. The buildings, at 205 Queen Street, are formerly known as National Bank towers and are located on one of the busiest intersections in the central city. One tower has 22 offices level and the other has 17.

(Source: NZ Herald)

A new eatery almost every week: Wellington's competitive food scene

Wellingtonians had a new bar, cafe or restaurant to sample almost every week last year, with council figures showing 48 eateries opened or changed ownership during 2017. Some of the most notable arrivals included Neko Ngeru, Wellington's first cat adoption cafe; PhotonFlux, a sci-fi themed bar on Victoria St; and British pub The Churchill.

(Source: Stuff)

House price drop could prompt interest rate fall

Market expectations are for the Reserve Bank to hold its official cash rate steady this year or to increase it, but a contrary view put forward by Australia's Capital Economics suggests rates may actually fall, with a cooling real estate market acting as a catalyst. Forecasts from the big four banks range from two hikes this year to none all until late 2019.

(Source: NZ Herald)

Third generation dairy farmers turn to hemp

Forget about white gold and our massive dairy industry, green gold could be the new king of the crop.  As the hemp industry opens up in New Zealand, a Rangitikei family is giving hemp a shot as they try get off the herd and diversify their dairy farm in hemp and pumpkin for the first year.

(Source: NZ Herald)

 

 

Looking for a strategic design and property partner?
Let's talk

Looking to buy, sell
or lease a property?
Talk to RCGR