Tauranga CBD Pedestrian Counts 2019

By Paul Higson, Telfer Young Property Valuers

The Property Institute of New Zealand (PINZ) conducted its most recent count of pedestrians at 37 Central Business District (CBD) locations, in September 2019. The main headlines from this data include:

  • The 2019 counts showed approximately a 15% decline from the 2017 figures.
  • The 2017 counts showed approximately an 11% decline from the 2015 figures.
  • There has been a movement of pedestrians away from Devonport Road and the beneficiary of this has been Grey Street.

The Property Institute holds data on CBD pedestrian counts which extends back to 1975. This gives these counts the advantage of showing trends throughout time. Since the early 2000s the counts have been conducted in the morning for half an hour and again in the afternoon for half an hour. Since 2011 the counts have been conducted every two years. Whilst before this time counts were often done annually.

Three of the top five spots were on Grey Street and a fourth was on the corner of Grey and Spring Streets. Rounding out the top 5 was a spot on the lower portion of Devonport Road.

The following graph visually shows the decline in counts from 2006 till the present:

Interestingly the count figures in 2006 were on par with the counts recorded in the late 1970s and early 1980s.

This data does not bode well for the CBD in terms of its raw numbers. However, similar trends have been seen in many other centres. Further, there has been a changing shift in consumer patterns with the effects of these changes being increased significantly in the last ten years. This has led to the changing nature of ground floor space within CBDs across the world. These changes have brought challenges, but also opportunities. Whilst the baby boomer generation has held sway over the NZ economy in recent decades, the next generations are now starting to drive consumer patterns. One of these patterns is a mission based consumer. That is, consumers that have already researched online the product or service that they are wanting to buy. Therefore, their trip to the physical store is far less about browsing and more about getting what they want and then leaving. This is an issue for shopping malls as well as CBDs. One of the responses to these patterns is for retailers to offer events in store that may involve free food or drinks.

Another aspect to consider when weighing up the pedestrian count trends, is that rental rates for ground floor accommodation within the CBD have generally not increased at a rate commensurate with that in shopping malls. When looking over the last ten years or so, rental rates within the CBD have become relatively more affordable (in the context of the increases in rentals within Tauranga’s modern shopping centres).

Over the next few years or so, the CBD will continue to see rejuvenation projects and there is some significant money committed or being spent. A major project presently underway is the circa $100 million Farmers site redevelopment. This is likely to draw consumers back into the CBD as Farmers is a destination store. Other positive trends are for more people living in and close to the CBD. Over the next few years, these initiatives should be drivers for increased consumer levels in and close to the CBD.

The PINZ survey of Pedestrians is undertaken at 10 am and again at 2pm for half an hour each. As buying patterns change though, it is likely that this time slot is now less attractive to consumers than it was in the past. The trend though is shown in these counts and will require tenants and property owners to think more laterally about what sort of property is going to be in demand in the future.

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