Commercial Bay one year on: Surviving a global pandemic and recession
Thursday, 10 June 2021
A city centre shopping precinct will celebrate its one-year anniversary after surviving through a global pandemic and recession.
Commercial Bay opened its doors on June 11, just two months before Auckland was plunged into a second Covid-19 lockdown.
But one year on, the billion-dollar precinct, which is home to 120 retail stores, is experiencing a strong recovery.
Scott Pritchard, the chief executive of Precinct Properties, the developer behind Commercial Bay, said Covid-19 brought an “enormous” amount of uncertainty.
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“It was pretty challenging times, we couldn't really believe what was happening,” he said.
“But you just have to stay really level-headed, deal with facts and control what you can control. That was really the focus of the team at the time.'
Commercial Bay opened on June 11 after the Covid-19 pandemic and subsequent lockdown delayed its March launch.
Pritchard said it received an “amazing response” from the public in its first two months, but the second lockdown 'knocked the stuffing” out of the industry.
“In the first two months we had a couple of million people through the centre which was really quite remarkable, particularly given people were very wary of Covid-19,” he said.
“To go into that second lockdown was a real disappointment, I think we realised we weren't through Covid-19 and at any point we could be plunged back into lockdown.'
The latter half of 2020 saw foot traffic decline due to further lockdowns and more people working from home, Pritchard said.
New Zealand was also plunged into a recession during this period, but rebounded in the September quarter.
An interim financial statement for the six months to December 31 revealed retail at Commercial Bay recorded a loss of $10.8 million.
But Pritchard said he remained calm, and his team took a long term view. Rent was deferred for some struggling retailers.
“Covid-19 is not the first pandemic that the world has been through. You have to have a bit of faith in medicine, and we’re seeing that now with vaccinations becoming really effective,” he said.
“Just forming a view that we have to make our way through the first 12 months perhaps. The worst thing you can do is react, you just have to deal with the facts and make your way through it.'
Pritchard said since the America’s Cup he has observed the number of people in the city centre and Commercial Bay increasing week by week.
He said the shopping precinct is now experiencing a 'really strong recovery”.
'When we designed Commercial Bay, 30 per cent of our market was intended to be international visitors, and so the market that we’re participating in has really shrunk quite drastically,” he said.
“We also thought we’d get around ten million visitors each year, and here we are a year later, and we’ve had around nine million visitors, so our view is that it is performing really well.'
Pritchard said the precinct has been supported well by Aucklanders, and Kiwis visiting from around the country. The trans-Tasman bubble has also resulted in a “good lift”.
When borders open to the rest of the world, Pritchard is confident the city centre, and Commercial Bay along with it, will thrive.
“Billion-dollar projects don't come around very often in New Zealand,” Pritchard said.
“To do that, and at the end of it have a global pandemic come and impact how you open, and how it trades thereafter, it's been quite remarkable really, and the lessons and learnings along the way have been immense.”