Deficit of big spaces keeps firms away

Tomoana Warehousing managing director Stewart Taylor has fielded enquiries for distribution businesses but the region has a lack of large modern premises. Photo / Warren Buckland

The lack of large buildings is a barrier to attracting new businesses to Hawke's Bay, says Tomoana Warehousing managing director Stewart Taylor.

A recent inquiry stalled because the Auckland company was looking for a large format distribution centre it could move into in six months' time.

"They quickly established there were no suitable buildings around the 5000sq m mark," he said. "Often Hawke's Bay can stack up quite well, apart from the fact we don't always have vacancies in suitable buildings."

He said in Auckland and Tauranga, markets often had new large buildings waiting for tenants.

"I don't see that happening here in Hawke's Bay."

Turley & Co property consultant Pat Turley said currently the only available space bigger than 5000sq m for a distribution centre was "more-or-less obsolete and defunct".

"If you want large contemporary space you are pretty-much talking about a new build," he said.

Speculatively-built properties were uncommon for provincial New Zealand, unless the market was bullish.

"We had a bit of that going with office accommodation in Hawke's Bay in the mid-to-late 2000s, where a developer would have a tenant and build 30 per cent to 50 per cent more than required.

"It doesn't happen a whole lot. When a market starts building accommodation on spec it is usually a sign it is getting overheated."

He said there was no shortage of land readily available in Napier and Hastings, with more land banked.

"If demand is there, there is land to be got."

Mr Taylor said a number of Tomoana Warehousing customers started shipping from Hawke's Bay because of Heinz-Wattie's.

"They run a few pallets down to the Wairarapa and to Wanganui and understand it is far more cost effective for them than Auckland - we often grow the business on the back of that - but it is always hard to get them across the line in the first instance.

"It could be a privately held importing company based in Auckland and if we put it forward to them, that if they moved their business to Hawke's Bay, these benefits would come to them.

"They often take the view, 'We are quite settled in Auckland, thank you'."

Hawke's Bay Chamber of Commerce CEO Wayne Walford said there may be an opportunity to target large distribution centres with building plans and consents in place.

Economic development agency Business Hawke's Bay CEO Susan White said the region needed to make it easy to do business in Hawke's Bay "but ultimately someone has to take the risk".

"You have to know your target market, be able to market the pull factors, on why locate a business in Hawke's Bay, and also identify any push factors."

There was no simple secret to business attraction. "We don't always rule with our heads, we also rule with our hearts."