In 2007 commercial realtor NAI Harcourts joined the exodus of businesses leaving the struggling CBD. The central city is undergoing a renaissance and NAI Harcourts is glad to back.
NAI Harcourts managing director Mike Neale only has to walk a few metres from his Victoria St office to be reminded how good it is to be back in the CBD.
“You can’t walk anywhere without bumping into someone you know, someone in business among all the professional and office space surrounding us here,” he says.
He jokes that while access to so many contacts and the close proximity of great cafes hasn’t been good for his waistline, it has certainly been good for business.
In 2007, NAI Harcourts left its building on the corner of Victoria St and London St and moved to a new office on the corner of Forest Lake Rd and Te Rapa Rds. The CBD was struggling at the time with retail vacancy rates hitting a high of about 15 percent.
“We sold this building and it wasn’t in our plans to come back here,” says Mike.
Times have changed though and as the CBD began to undergo a resurgence in the last two years or so NAI Harcourts began to rethink its plans. An approach from developer Matt Stark who was redeveloping the old Harcourts building proved the pivotal moment.
“He said one day ‘do you guys want to come back into town?’
“We wanted a contemporary building and knowing the quality that Matt brings to buildings we were immediately tempted. Our lease still had more than a year to run but we thought if we don’t move now we probably won’t find a spot we really want. Things were beginning to move pretty quickly again in the CBD.”
NAI Harcourts is now back in its redeveloped old building and couldn’t be happier with the outcome.
“We just love the location,” says Mike. “We are surrounded by so many offices, so many professional services. There is so much interaction with other businesses, people pop in all the time. This is absolutely the place to be.
“There’s so much going on and I think we really wanted to be part of it. Coming back to the CBD has been much better for our business. It’s like coming home again.”
Mr Neale acknowledges that a decade ago the CBD’s situation was “pretty dire”.
“But it’s now redeveloping on a vast scale really, much more so than we’ve ever seen before”.
A Retail Occupancy Survey released by NAI Harcourts and CBRE Research this month shows that the CBD’s vacancy rates have steadily declined since they were at 14 percent in June 2012. In the six months to June they rose slightly from 6.2 percent to 8.3 percent which is partly due to the removal of retail stock in that period for refurbishment, redevelopment and earthquake strengthening.
“We’ve seen some real gains in this area over the last few years. It’s been gradual but it’s been sustained.”
Overall office vacancies reached an all time low of just 6.3 percent in June having been as high as 12 percent in 2010.
Mr Neale presented the report at Hamilton CBD Association’s AGM in October and said there wasn’t one silver bullet to the CBD’s revitalisation, but a number of “moving parts”.
Key drivers to it success included Hamilton City Council’s remissions for development contributions. He said he knew of a building vacant for 10 years which had a $5 million redevelopment as a result of that remission.
Two hours free parking in the CBD was another factor.
“I can’t remember seeing so many available car parks in the CBD than we have seen in the last two weeks,” he said.
New district plan rules encouraging residential development in the CBD and earthquake strengthening laws which encouraged landlords to refurbish buildings were also significant factors.
CBD Association chairwoman Sarah King said an August indicator report showed the spend in the central city is up 10 percent in the last year.
“There is a general feeling of activity and modernisation happening in the CBD contributing to a feeling of positivity and business buoyancy.”
Significant commercial developments underway in the city included:
– The Genesis building on the corner of Tristram and Bryce Sts
– The Anglesea medical development
– The DHB Farmers building
– The ASB building on the corner of Bryce and Barton Sts
– Victoria on the River
– The Sudima Hotel, Victoria St
– The development on the Corner of Ward and Victoria Sts
“These developments will see 1700 workers centrally located in the CBD plus additional customers and clients visiting these businesses,” she said.
Ms King said significant challenges previously identified by members had seen movement in the past six months. These included the issue of parking which was being addressed by the two-hour-free parking trial which started in October, improved perceptions on CBD safety and concept plans put up to redevelop Garden Place.
She said the commercial sector had identified a demand for smaller boutique retail spaces which support the start up or smaller retailer.
“There is a strong demand for premises with kitchen facilities and the proposed new theatre site has added additional interest to the hospitality precinct in the south end of the CBD. Office space is in demand from smaller businesses outside of the CBD looking to capitalise on CBD facilities of cafes, eateries, restaurants, gyms, retail offering and other services.”
Disclaimer: Geoff Taylor is also a Hamilton city councillor.