Rise of the mega-malls hits Tauranga’s city centre

They’re the city’s mega-malls and they have grown hugely, offering not just shopping but a dining and entertainment experience.But what does the growth of Tauranga Crossing and Bayfair mean for the city centre?

In the second of a two-part series on the rise of the malls, Zoe Hunter investigates the impact on the CBD and finds out how retailers and the city’s leaders are responding and what the future holds.

It is mid-morning on a Saturday in Tauranga’s city centre and there are few shoppers around.

I’ve just come from the hustle and bustle of the city’s newest mega-mall at Tauranga Crossing where almost every store has a waiting customer.

It’s the same at Bayfair Shopping Centre, where many people are shopping and dining inside the enclosed mall.

I can see the odd person in the CBD with a shopping bag in hand, but it appears they are on a mission with their heads down and walking at a fast pace.

Scaffolding is up at almost every turn and orange road cones block entrances to some of the streets.

In the heart of the city centre sits the new Waikato University campus which many people hope will inject new life into the CBD.

The massive Farmers building is taking shape on Elizabeth St, promising to deliver 8000sq m of retail on two levels, 23 townhouses and 96 high-end apartments in two towers, plus 322 car parks.

Under pressure from the malls which are expanding their footprint and drawing more shoppers, Tauranga’s CBD is in the middle of a period of upheaval and transition.

Empty shops are visible, with signs up for lease – but the cafes are busy with people sipping on their morning coffees and having a bite to eat.

Empty sites, less money

Downtown Tauranga’s data shows of the 704 sites in the CBD, 550 are occupied and 154 are available for lease.

The figures only relate to the Mainstreet boundary and not the full CBD as defined by the Tauranga City Council, which stretches from Second Ave to Monmouth St and from Cameron Rd to The Strand.

So let’s do the maths.

Downtown Tauranga’s chairman, Brian Berry, uses this example: If we allow a rental rate of an average of $250 per sq m (across retail and office space) and an average tenancy size of 125sq m that equals $31,250 a year across 150 vacancies.

That’s a total of $4,687,500 in potential lost rental income.

Add an allowance for operating expenses (rates, insurance and other costs), at $40 per sq m and that equals $750,000.

That means the total lease and operating expenses being missed out on is about $5.5m, plus any further spend associated with the tenant, staff and customers, Berry says.

It is a challenge long-time retailers in the city centre are trying to overcome, with talk of late-night shopping to bring back customers.

Retailers and a late-night option?

Murray Clode, of Macandmor Art Space in the Goddards Centre, is one of the retailers involved in discussions for late-night CBD shopping.

“Our challenge is to make the CBD still interesting and engaging to the people and give them some reason to come in to do their shopping or for a social experience,” he says.

Opening later would attract people who want to shop after work, combining shopping with the social experience of going to dinner and the movies, Clode says.

“It is really around giving another future to the CBD,” he says.

Clode says the later hours until 7.30pm or 8.30pm will be trialled for “a considerable amount of time” and will be up to the individual businesses.

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