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I don't know where the Head of Research at JLL, the commercial property company, I does his shopping, but it cannot be anywhere that I go. If you've ever wondered what the definition of gaslighting is, you may well have heard it this morning. Chris Dibble —the Head of Research at JLL— was on the wireless claiming that we have a critical under-supply of retail space in this country, and that to keep pace with population and demand we need to come up with a quarter of a million square metres in the next five years. Shopping centres and large format retail are experiencing solid demand, he reckons, and he told Mike Hosking CBD’s strip vacancy rates are the lowest in Australasia.  

“The way that we've attacked this research is looked at basically the ratio between how much retail space we currently have and the population at the moment as well. And so when you look at that ratio, which is around about 0.5 square metres per person across the country, then when you look at the population growth that New Zealand's going to go through over the next sort of five years, we can understand that to keep their ratio we just need more space.  

“And so we are seeing a bit of development across the country, which is positive. It will help to start, I guess, eat away at some of this growth forecast that was required in retail floor space. But yeah, there will need to be a lot of that around in Auckland. They've got around about a third of all the retail supply across the country so from that perspective, it is a significant amount that will probably happen in Auckland.” 

I was listening to this, and I was thinking why don't we use the retail space that's vacant right now before we build anymore? The way he was talking it was that demand is such that you've got queues of retailers hammering on the doors of existing retailers, begging to take over the space, and that is simply not what I am seeing. I would love to know what your main street looks like? I know JLL is a commercial property leasing company, you have to talk up your business, but there's talking up and then there's downright delusional. If you have ventured into your local mall, how many sites are boarded up or being used as displays for the stores that remain or have these poor people sitting there gazing at you as you walk past, willing you to come into their store? They'd be lucky if they have four or five customers in a day. I've never seen it so bad.  

It's not just my anecdotal experience either. I thought it might have been, but according to OneRoof, New Zealand's commercial property market in 2024 has been one of the toughest in two decades. High interest rates, remote working online shopping leading to higher vacancy rates and soft rental growth. Bayley's commercial and capital figures show commercial property sales plummeted since 2021 in both volume and value, and we're sitting back where the market was in 2001 and 2002. Westpac said in early December the market had fallen around 10% since its peak in 2021. The value of sales dropped below $6 billion over the 12 months to June 2024, the lowest in more than a decade.  

So who's right? How can we possibly need up to a quarter of a million square metres of retail space in the next five years when so many shops are sitting empty? What are you seeing, because I am not seeing what Mr. JLL is seeing. The one thing I would agree with in the report is that along with the fact that we need three or four new 277’s, is that Kiwis still value in-store experiences. And for those stores that remain, by crikey I do, I love a good in-store experience, and I get them. Where you've got people who've been in business for years who know their business, who know that there is online, so they upgrade their websites, they get with the programme. I was in Tauranga on Friday. There's a store called Wendy's there that's been there since 1984, and it's still doing a roaring trade. Great website, it was absolutely packed, knows its customers, and the staff were incredibly helpful. It's seen off recessions, it's seen off online shopping.  

If you know your stuff and you will have stores like that up and down the country, you stick with your knitting, you adapt with the times, you know what you're good at, you take on board what you need to grow with your customers, you'll be fine. And you cannot beat a good in-store experience, but bloody hell, it's tough out there. So how on Earth can we fill four or five massive new shopping complexes, which is what Chris Dibble was saying? Would it not be best to start with filling the existing stores that have vacant right now and have been vacant for far too long?