Owners of Auckland's $1 billion Commercial Bay mall upbeat despite reports some shops doing it tough

The owner of Auckland’s newest mall Commercial Bay says most tenants are pleased with their sales turnover and the numbers of people walking through the mall, despite some tenants saying they're doing it tough amid the Covid-19 pandemic.

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CEO of Precinct Properties Scott Pritchard says rent holidays are common for new tenants, regardless of a pandemic or sales performance. Source: 1 NEWS

Scott Pritchard, CEO of Precinct Properties which owns the $1 billion development housing more than 120 shops in the central city, said pre-Covid-19 turnover forecasts were being exceeded. 

“Seven or eight weeks in, we’re really, really delighted with the sales turnover and really pleased with the pedestrian count … it’s better than we expected.”

The mall opened on June 11 soon after the country moved to Alert Level 1. Mr Pritchard said there was always a bit of uncertainty when opening malls, even without a pandemic. 

Mr Pritchard said tenants were “broadly” happy with their sales turnovers. 

“It’s a mix. Like any centre, you’re going to have some going really well and some that aren’t going quite so well,” Mr Pritchard said.

He said the precinct’s hospitality joints and new-to-New Zealand fashion brands were doing “incredibly well”.

“There’s one or two that are still finding their feet. So, two months in post-opening, I’m sure they’ll soon learn how to leverage their own products.”

Mr Pritchard said there was some uncertainty given people were still in lockdown overseas.

“I think it’s that level of uncertainty that’s sort of providing the most angst. But at the same time, they’re [the tenants] taking quite a lot of comfort about the fact that they’re getting regular turnover.”

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The new shopping mall boasts a range of international retailers and dining options. Source: 1 NEWS

It comes as RNZ this morning reported some businesses in the mall were struggling. Precinct Properties has offered some shops a rent holiday. 

Businesses struggling at Auckland CBD's new $1b Commercial Bay shopping precinct

Cali Press owner Chris Monaghan told RNZ sales were half those expected. The café is among those who received a rent holiday.

"The revenues aren't there, the sales aren't there so it takes a collaborative approach from a landlord. 

“Shops will close if you've landlords that take a shortsighted approach."

Another tenant, health and beauty store Aotea, was also struggling without tourists coming into the country. 

Founder Tama Toki told RNZ his focus was on domestic sales, which were going well. But, he was still uncertain about the future. 

"Who knows how it's going to shake out. I'm hopeful, but anticipating some slowdown."

But Mr Pritchard told 1 NEWS the offer of a rent holiday was made before lockdown. He said Precinct Properties was being proactive and wanted to support its tenants in the long-term as the pandemic was taking hold overseas.

“For us as a landlord who owns quite a lot of real-estate, we’re very keen on supporting our occupiers.”

He said Precinct Properties was taking a long-term view and was wanting to support its tenants “across the board”. He said offers of rent holidays were normal for new tenants as an incentive.

“That doesn’t mean that trading is not going well. This was done before lockdown.”

Across Precinct Properties’ portfolio, it was offering rent relief and abatement where necessary to everyone who needed it, Mr Pritchard said.

However, he would not say how many shops in Commercial Bay were accessing rent relief. But, he said there were no more tenants in the mall asking for help. 

Addressing the lack of tourists and cruise ships coming into Auckland, he said because the concept for the mall started eight years ago, it targeted locals too.

“We sort of think about cruise ships being the icing on the cake, and we don’t have that icing at the moment," he said.

Mr Pritchard was confident Commercial Bay would “definitely prosper in the future” with its prime location near the waterfront. 

"Tourists will come back. And a business like ours will own this real estate for the next 50 years.”