Growing city reaching limits

A shortage of commercial real estate in Auckland has reached crisis point with fears all available land could run out in just 10 years.

There is only 2000 hectares zoned for commercial purposes left in the Auckland region - with conservative estimates showing that is being used up at a rate of 130 hectares a year.

According to a best-case scenario prepared by the Auckland Regional Council, this land will last only until 2021 - and only if all city councils optimise current business land.

But Manukau City Council, which has the most greenfield space available in the region, is not as optimistic, saying commercial land in the area could run out within 10 years.

Big investment companies were aggravating the land scarcity problem by snapping up greenfield areas when they appeared on the market, the council said.

While some created business parks and on-leased facilities to tenants, others were waiting for values to rise so they can sell at a profit.

"It's perfectly legal," said Auckland Regional Council strategic policy analyst Michael Tucker.

"We can't stop them, but it means if councils did release more greenfield land, they would probably just buy that as well."

Mr Tucker said councils were looking at a range of ways to combat this issue. One option was for councils to buy land in commercial zones.

Manukau City Council spokesman Leigh Auton also confirmed this was a possibility. The lack of greenfield space was at "crisis" point and one of the most significant issues facing Auckland.

"It needs to be addressed now to enable New Zealand to have ongoing competitiveness within the Australasian market," he said.

In the meantime, the regional council is asking city councils to optimise use of existing vacant business land as well as any new greenfield land. It also wants councils to consolidate or intensify use of land in existing business areas.

But Mr Auton said the Manukau City Council was sceptical about how consolidation in town centres would help resolve the problem.

"I don't think the councils discussing this as an option understand the dynamics of business, how much space is needed, how important it is to have infrastructure like airports and motorways nearby."

But Auckland City Council economic development spokeswoman Karen Lyons said the types of businesses it wanted to attract were industries such as retailing, ICT firms, professional services, creative firms and niche manufacturing which were not land intensive.

She said encouraging more intensive and efficient use of land particularly in priority growth areas like the CBD, Newmarket, Avondale, Ellerslie, Penrose, Mt Wellington and Panmure would ease the shortage. "We can't grow outwards but we can go up and we can improve on intensive land use; a lot of growth can be accommodated by redeveloping older or under-utilised buildings."


- HERALD ON SUNDAY