Ports a catalyst for industrial property

Sales of land for logistics purposes related to its port operations are booming at Napier. Photo / Supplied

The growth in tonnage volumes being freighted through New Zealand's major sea and inland ports — combined with greater operational efficiencies initiated by logistics firms, importers and manufacturers — is creating new opportunities for the country's regional industrial property markets.

The New Zealand Ports and Freight Yearbook 2018 produced by accountancy firm Deloittes, says the country's two major container ports — in Tauranga and Auckland — continue to be the dominant players in the market, with a combined market share of 62 per cent of all containers handled last year, while all New Zealand ports increased container throughput in 2017.

National director for Bayleys Real Estate's industrial and logistics division, Scott Campbell, says regional New Zealand's industrial property sector had already benefited as a consequence of not only the growth in port activity, but also the way in which goods were being transported in to and out of the country. "Previously it was a case of a wharf-to-warehouse supply chain for imports, or vice-versa for exports. Now though, with bigger volumes coming in, we are seeing the rise of intermediary in-land ports," Campbell says.

"And for both import and export-reliant firms, we are seeing much bigger warehousing facilities being built to accommodate stock, either once it has been unloaded from containers, or in advance of being containerised.

"That has seen a greater prevalence of ultra high-stud 'drive through' warehousing rather than the traditional dock and platform loading bays. "Warehousing facilities are buying bigger landholdings capable of storing substantial numbers of both 20 and 40-foot containers."

Artist's impression of Tainui Group Holdings' plans for a 480ha inland port and logistics hub at Ruakura. Photo / Supplied

Ports activities analysis from Bayleys' research division has identified significant commercial property activity expansion in three New Zealand regions which have seen their shipping, rail and trucking transport volumes increase over the past decade — in the Waikato, Hawke's Bay and Canterbury.

In Waikato, Tainui Group Holdings is embarking on an ambitious 480hainland port and logistics hub development at Ruakura.

Project general manager Blair Morris says due to demand, the Ruakura initiative is moving along much faster than anticipated — with full build-out in less than 30 years versus the company's initial estimate of 50 years.

"We forecast up to 2.6 million TEU (twenty foot equivalent container units) would be moving by 2044. However, the pace of growth is ahead of forecast as the two major North Island ports are already moving circa 2.2 million TEUs, only four years on from the forecast", says Morris.

Inquiry about industrial property sites at Ruakura is coming chiefly from major warehousing and distribution businesses looking to relocate outside of Auckland and includes significant players in the construction, food and beverage processing, and retailing sectors.

Meanwhile in Hawke's Bay, Napier's business development manager, Andrew Palairet, said the company has acquired a large block of land at Whakatu for potentially creating a freight hub. The site is leased to a third party in the interim.

Largely unseen by the public, port operations continue 24/7. Photo / Supplied

Two years ago the port acquired 4.5ha site in Napier's Pandora industrial precinct, primarily to enable expansion of its existing empty container handling depot adjacent to the new site.

"There are large, medium and small land blocks available for purchase or lease within Napier, Hastings and surrounds. Land values are on the rise and the economic mix should provide a steady stream of tenants," Palairet says.

Rolleston, just south of Christchurch is the pre-eminent industrial growth area in Canterbury, underpinned by the two inland ports — MetroPort and MidlandPort.

industrial development firm Carter Group is behind Rolleston's evolving IPort Business Park which occupies 95ha of industrial land, part of which has an boundary with Lyttleton Port of Christchurch's MidlandPort.

Lyttelton, the port serving Christchurch, purchased 27ha of the original 122ha MidlandPort industrial site for its Rolleston-based operations. Around 92 per cent of Canterbury's exports transit though Rolleston.

The land parcels IPort is selling adjacent to the MidlandPort operations offer huge scope for owners/developers looking for large shed properties on sites up to 7ha each. Around 18ha of IPort land has also been set aside for large format retail.

The balance of the industrial land is being carved up into sites ranging from 800sq m to 3ha — with Carter Group targeting businesses which may never have considered purchasing industrial land before.