Developments in and around inland freight hubs are in hot demand as investors and occupiers place high value on warehousing and industrial sites that are secure and easily accessible via key transport links.
In recent years New Zealand’s two largest seaports, Ports of Auckland and Port of Tauranga, have invested in multiple regional sites around the country to expand their off-site storage capacity and allow them to manage increasing freight volumes.
Bayleys national director industrial and logistics Scott Campbell pointed to these sites, and land adjacent to them, as offering excellent investment fundamentals such as robust infrastructure, high demand from occupiers and growing need from the country’s biggest ports.
“There’s always been interest from investors in this category of development and it has always been of higher value because it offers speed to market and lower freight costs,” said Campbell.
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Bayleys insights research analyst Ankur Dakwale said land is often scarce around traditional ports, making inland freight an appealing alternative.
“Ownership of industrial properties near the ports is generally tight and seaports are often located alongside urban areas, so have limited opportunity to expand.
“In some cases, the opportunity for third parties to purchase freehold properties is also limited because the port companies own some of the properties around the port, or leasehold structures have been put in place so that only leasehold interests are readily available.”
Bayleys head of insights, data and consulting Chris Farhi said freight hubs are typically in highly desirable locations with well-established infrastructure which can simplify logistics and lower transport costs.
“There’s also security for investors because the ports these freight hubs serve represent huge infrastructure and are unlikely to move in the short term,” Farhi said.
Ports of Auckland now has freight hubs at Wiri in South Auckland, Northgate in Waikato, and Longburn near Palmerston North (a joint venture with Napier Port and Icepack cold storage).
Port of Tauranga has MetroPorts in Auckland and Rolleston, a container hub in Timaru, and the Ruakura Superhub near Hamilton, a joint venture with Tainui Group Holdings.
Bayleys Waikato commercial director David Cashmore said that region’s central location makes it a sought-after location for freight, storage and logistics operators.
Tainui Group Holdings has leased approximately 19.5ha of logistics and industrial-zoned land via a combination of design-build and lease projects, at the Ruakura Superhub which includes the joint venture Ruakura development with Port of Tauranga.
“The accessibility, with access to major expressways, is key, but there is also a snowball effect. The more businesses that locate in these industrial freight hubs, the more appealing they become to other businesses,” Cashmore said.
Campbell says Wiri and Drury, south of Auckland, have the added advantage of being adjacent to Auckland International Airport as well as Ports of Auckland and inland freight hubs.
Key industrial and logistics developments in the region include the Logos Wiri Logistics Estate, and Drury South Crossing, a master-planned industrial estate. Both have experienced much faster uptake from occupiers than predicted, particularly from food sector businesses, he said.
Campbell identified Basalt Business Park as the next area of interest.
While Port of Tauranga expanded its freight storage capacity around the country, business parks in satellite areas are generating interest among businesses wanting land within manageable distance to the main port, said Bayleys Director Commercial Industrial Tauranga, Mark Walton.
“The amount of enquiry we’ve had for industrial buildings over 2000sqm in the last few months in transport, logistics and warehousing is huge, but there is very little supply, Walton said.
Most new land is at Tauriko Business Estate and the soon-to-be completed Rangiuru Business Park, a Quayside development due to be released late 2023 or early 2024, he said.
In the South Island, inland port developments in and around Rolleston, near Christchurch are turning the satellite town into a thriving commercial and industrial hub, says Bayleys general manager Commercial and Industrial South Island, William Wallace.
The town is home to the 15ha Tauranga Metro Port, as well as Lyttleton’s MidlandPort with 27ha of industrial land, and Tawhiri, the Ngai Tahu industrial subdivision which sold out in approximately 18 months. That is adjacent to the Izone Industrial Park, and IPort business park which connects via road and rail to both Lyttelton Port and Christchurch Airport.
“We have seen a huge growth in demand for industrial land, particularly from the big supply chain and logistics companies,” said Wallace. “There aren’t many parcels of land available now. Most of those on the market are now on-sales.”
- Article supplied by Bayleys
