CBD block developer says national retail chains are queuing up

Wednesday, 10 July 2019

Artist impression of the Esk St entrance into HWCP Management Ltd's proposed inner city block development.

Those behind the CBD block development say national retailers are queuing up to come to Invercargill, although few signatures have yet to be put to paper.

HWCP Management Ltd - a joint venture between the Richardson Group and Invercargill City Council - has been granted resource consent to demolish an almost entire inner city Invercargill block and build a new undercover retail and food and beverage precinct.

03122017. News. Kavinda Herath. Southland Times/Stuff-HWCP director Scott O'Donnell outlines plans for the new Invercargill CBD development

An agreement was in place with a yet-to-be-announced anchor tenant to have them operating by November 2021.

HWCP director Scott O'Donnell said once the project's funding was confirmed, and the anchor tenant announced, he expected the other spaces in the new precinct will fill up fast.

* CBD business shift continues as demolition looms

* CBD developer targets November 2021 for anchor tenant opening**

'They'll be jostling for positions,' he said.

A common public concern was that many national chains would not come to Invercargill and the new $180 million retail and food and beverage precinct could struggle to be tenanted.

At the same time as HWCP Ltd planned to demolish and rebuild an entire CBD block, a Kmart store was being constructed in Clyde St as part of a new complex. The complex will include another eight smaller stores, as well as 147 undercover carparks, and has been described as a shopping mall.

O'Donnell believed Southland was attractive for national chains and was confident there was enough demand in Invercargill.

'They are queuing up to come because all of the other retailers, the Briscoes, the Farmers, those guys give the feedback that they are trading well above expectations.

'The Southland market is quite affluent. The amount of spare cash the average Southland family has is a hell of a lot more than the average Auckland family because of the housing costs.

'At the moment a lot of people spend their money in Dunedin, Queenstown, or online, because it's not a nice environment to go and shop in Invercargill.'

O'Donnell believed there were a couple of key reasons why many national chains had not already set up shop in Invercargill.

'One: They are only opening up in that mall environment because of the foot traffic from the food and beverage and also car parking. We haven't got that at the moment so they are not coming.

'Two: Their national building managers stipulate the buildings must be 80 per cent of NBS [National Building Standards] or above, we don't have any of those buildings.'

O'Donnell acknowledged the $4.5 million budget blow out attached to the Invercargill City Council's Don St property development did have a few people worried about the council's potential investment and involvement in the CBD block.

Part of the budget blowout was on the back of the council budgeting for 100 per cent occupancy but opened with 66 per cent occupancy.

'I know there is a fair bit of scuttlebutt around that the council are getting involved and will cock it up. They haven't got the ability to cock it up because I'm managing it.'

Despite the problems attached to the Don St development, O'Donnell said tenants in the building were trading well and places were starting to be filled.

He said it again pointed to the Invercargill market being strong.

The council was consulting the public about if it should invest up to $30 million in the CBD block.

Oral submissions will be heard on Tuesday with a decision expected next month.