Auckland Retail Market Dynamics Q2 2026

• Retail vacancy tightened slightly across Auckland, while supply remained relatively stable. Premium international brands continue to target high-profile flagship locations in core precincts.
• Prime CBD rents were steady during the quarter, with modest rental growth expected ahead. Incentives are likely to remain elevated as some areas continue to face leasing pressure.
• A continued “flight to quality” is expected to support stronger retail precincts with high foot traffic and connectivity, although weak consumer confidence is likely to keep broader retail conditions challenging through 2026.

Over the past six months, vacancy has tightened slightly across Auckland’s retail markets. CBD retail vacancy declined to 12.9%, representing a reduction of 20bps, while suburban retail vacancy also eased, falling to 13.5%, a decline of 80bps. Luxury jewellery brand Cartier is scheduled to open its first New Zealand flagship store later this year at the prominent corner of Queen and Fort Streets. The boutique is housed within the restored Imperial Hotel, a Category 2 heritage building redeveloped into an upscale two-storey store. Overall retail supply remains relatively stable, with new additions primarily being delivered through ground-floor retail tenancies incorporated within mixed-use office, hotel, and residential developments.

CBD prime average net rents held steady in 2Q26 at NZD 2,475 per sqm p.a., unchanged from the prior quarter. This figure sits midway between the upper end of NZD 3,775 per sqm p.a. and the lower end of NZD 1,175 per sqm p.a. An increase in CBD prime average net rents is anticipated by year-end. Incentives for prime CBD have been unchanged at 7.8% since early 2023, while prime suburban incentives have consistently been 9.0%. Vacancies, notably away from waterfront areas, are expected to push prime CBD incentives to 8.0% in 2026. Average prime CBD and suburban retail yields softened by 25bps over the quarter, moving from 6.88% to 7.13%, and are expected to remain stable throughout 2026.

A distinct "flight to quality" is expected to continue, where well-capitalised brands take advantage of softer market conditions to secure prime, flagship locations. As a result, precincts with superior connectivity and high foot traffic are anticipated to lead a recovery in occupancy rates. However, the near-term outlook for the broader sector remains challenging. Weak consumer confidence, driven by persistent high living costs, is dampening discretionary spending. This is expected to create a cautious retail environment throughout the remainder of 2026.