Published 2 May 2008
Retail real estate specialist Match Realty Ltd (Aubrey Cheng, Georgie Clatworthy, Mike Hammer & Fiona Newton) is celebrating 4 years in business with a string of sales, opening of a Christchurch branch and expectations that a market downturn will yield good returns as international brands see openings here.
Looking back, director Mike Hammer said this week: “We set up at a time in the cycle when car salesmen & photocopier salesmen were turning to real estate and we perceived a need for quality advice.”
Now retail property is heading into a cyclical downturn, Mr Hammer and his partners believe addressing the same demand for quality advice is what will win market share: “B, C & D-grade buildings have been leasing for A-grade rent but, as the pressure comes on, a lot of the ‘rates & mice’ of agency will drop out.”
The irony of that is, a more complex market is starting to offer opportunities that were not around during the easier leasing times. Match partner Aubrey Cheng said more international brands were starting to look for space in New Zealand because of limited opportunities for growth back home – and also because they can get high turnover here.
“Dick Smith turns over more in New Zealand than it does in Australia. Obviously there’s more competition in Australia, but New Zealanders also happen to be big technology spenders. There’s a market, it’s reasonably lucrative, rents are cheap and the return on capital employed is attractive.
“For comparable spaces you’d pay $6-8000/m² in Melbourne, but $2000/m² on Queen St. In retail economy terms, the message we’re trying to sell into Australia is that New Zealand’s the size of Queensland.”
Match has been nurturing interest in New Zealand since it opened in 2004, the directors crossing the Tasman as often as 10 times/year to grow their potential Australian clientele: “It might be 2-5 years’ incubation before they step up,” Mr Hammer said. “But in this market quality retailers will continue to expand because, for the first time in about 7 years, they can get their foot on a site they want.
“In the past year key money was 6 figures in Queen St, High St & Broadway, and on Lambton Quay in Wellington. We’re still seeing some key money being paid, but down to 25% of the figures at the peak.
“The other factor in opening up potential tenancies is the time lag before tenants have to pay an increase in rent, calculated off the rises in turnover, meeting a fall in sales.”
Contrary to the common perception of market gloom, Mr Hammer said Match handled a dozen lease agreements in the fortnight after Easter, throughout New Zealand & across retail sectors, ranging from overseas & local fashion chains to homeware, electrical and food & beverage operators.
These new tenants include Gucci, which has opened in the refurbished former Farmers’ & Deka space at the foot of Queen St, Louis Vuitton, moving there from the other side of the street, and Mansor’s jewellers, which will open a Rolex concept store fronting Queen’s Arcade.
The new Christchurch branch is headed by former Colliers International & Livingstone’s agents Jeff Vesey & Grant McIver.
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Attribution: Interview, story written by Bob Dey for this website.