colliers international - the industrial evolution

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How do you deliver a $40 billion rebuild into Canterbury? The industrial sector has been a stellar performer in recent years and the rebuild is fuelling continued growth this year. Industry is the power behind the throne, a powerhouse of Canterbury's burgeoning economy.

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  • COMMERCIAL INSERT

    THE INDUSTRIAL EVOLUTION

    CANTERBURY. THE GROWING TRANSPORT AND LOGISTICS POWERHOUSE

    South Island Commercial (2004) Limited Licensed under the REAA 2008

    Rebuilding Christchurch

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    COLLIERS INTERNATIONAL 06.06.15

    Colliers International Industrial Brokers lead the way as the top real estate providers, call us today.

    Sam Staite: 021 738 245 Oliver Salt: 027 838 6494 Christian Kellar: 027 333 4057Sally Ryan: 027 483 3311 Paul Marhall: 027 221 9994

    While the Christchurch central city occupies centre stage in the rebuild, the industrial property sector is the unsung hero of the market and is continuing to attract enormous interest.

    We believe that considerable unsatisfied demand this year is set to further fuel the sectors already stellar performance and we expect to see continued pressure on investment yields.

    Interest rates are cyclically low and early indications in 2015 suggest they are likely to be lower for longer yet. This has enabled a re-rating of risk margins. Average prime industrial yields pushed below 7% at the end of 2014, the first time in our 20-year historical time series. Investors and owner-occupiers have bolstered the markets

    exuberance, both confident that industrial property is a solid bet at current margins.

    In Canterbury, arguably the biggest winners of post quake activity are Hornby and Rolleston, both from a residential and industrial perspective. The Rolleston area is booming and business parks such as Izone and the new Carter Group development, IPORT, are in strong demand. Such activity is in no small part helped by the $900 million upgrade of Canterburys motorways, part of the National Roads of Significance project.

    The development of Stage 2 of the Southern Motorway is certainly fuelling interest in the western areas, as freight transport is made easier from Lyttelton Port right through to Rolleston. Construction of Stage 2 will be

    tendered early in 2016 and, once complete, is estimated to halve the travel time between Rolleston and the central city.

    In industrial leasing, weve seen rentals begin to plateau as the market has become more competitive with increasing availability of existing and new stock. Demand is still steady and Colliers has recently leased a number of significant warehouses in the 1500-5000m size range.

    The future of industrial property in Christchurch is bright with opportunities aplenty.

    Sam Staite

    Director of Industrial Sales & LeasingColliers International - Agency, Christchurch

    INDUSTRIALFORGESAHEAD

    INDUSTRIALFORGESAHEAD

    South Island Commercial (2004) Limited Licensed under REAA 20082 Colliers International The Industrial Evolution

    Sam Staite, Director of Industrial Sales and Leasing

  • COLLIERS INTERNATIONAL 06.06.15

    While work on the ambitious programme began before the earthquakes, the undeniable advantages of the new highways are a godsend for those involved in the rebuild.

    Rapid growth in and around Christchurch, particularly in the Selwyn and Waimakariri Districts, is placing demands on the state highways to the north and south of the city and around its western edge. The most ambitious such programme ever undertaken in Christchurch will improve access to Christchurch City, the International Airport and the Lyttelton Port of Christchurch (Lyttelton Port).

    This investment will not only increase the capacity of Canterburys roads to handle increasing freight traffic, but will improve safety for all road users, said the NZ Transport Agency.

    The Christchurch Roads of National Significance project covers three corridors, which have been broken down into a number of smaller projects.

    Southern Corridor The Southern Corridor provides access to Lyttelton Port and the Christchurch CBD for people and freight from south of Christchurch. The corridor includes the Southern Motorway from Barrington St to Halswell Junction Rd (Christchurch Southern Motorway Stage 1) and the extension to rejoin SH1 south of Waterholes Rd and widening the existing highway to just north of Rolleston (Christchurch Southern Motorway Stage 2).

    Stage 1The Christchurch Southern Motorway Stage 1, a four-lane median-separated motorway

    between Collins St and Halswell Junction Rd, opened to traffic in mid December 2012 and now provides a safer, more efficient and reliable route between the central city, Lyttelton Port and southwest Christchurch.

    Stage 2The Christchurch Southern Motorway Stage 2 will be tendered in early 2016. Construction is likely to begin in the summer of 2016 and is expected to take three to three and a half years.

    Western Corridor The Western Corridor, SH1, provides access to Christchurch International Airport for people and freight from throughout Canterbury and the South Island.

    Traffic volumes on the Western Corridor are increasing and this is expected to continue as commercial and industrial activities grow, particularly in Hornby and at the airport. There is insufficient capacity in the existing two-lane roads to absorb this future traffic growth. To ensure businesses based in and outside Christchurch are able to get their goods to and from suppliers, customers and the airport, the current road needs upgrading.

    The existing Western Corridor runs along Johns, Russley, Masham and Carmen Rds. When the Western Belfast Bypass is built, the Western Corridor will run from the Northern Motorway and join Johns Rd near the Groynes. The Western Corridor will be a four lane highway (two lanes in each direction) with a median separating on-coming traffic; selected main road intersections will also be improved.

    Northern Corridor The Northern Arterial is a planned new section of four-laned, median-separated state highway between the existing Northern Motorway and QEII Drive. As part of this project QEII Drive will be four-laned, between Main North Rd and Innes Rd and the Waimakariri Bridge will be widened to three lanes heading north through to Tram Rd.

    3 Colliers International The Industrial Evolution

    NEW MOTORWAYSPAVE THE WAY FOR GROWTHNEW MOTORWAYSPAVE THE WAY FOR GROWTH

    Christchurchs burgeoning transport and logistics sector will be one of the chief beneficiaries of the $900 million upgrade of Canterburys motorways, part of the

    National Roads of Significance project.

    In The Fast LaneAround 44,000 vehicles a day use Main North Rd, north of Johns Rd. This drops to 32,500 in the Redwood area, while QEII Drive currently carries more than 20,000 vehicles a day.

    Information compiled with the assistance of the NZTA

    NZTA traffic modelling shows that by 2031 the daily number of vehicles in the Redwood area of Main North Rd will rise to 40,000 if the Northern Arterial is not built and 22,000 if it is built.Currently there are 15,200 vehicles a day on Marshland Rd near Prestons Rd; by 2031 there would be 23,100 vehicles a day without the Northern Arterial or 12,200 if the Northern Arterial is built.By 2031 the Western Belfast Bypass will carry 27,700 vehicles a day without the proposed Northern Arterial in place and 23,000 with it.

    Without the second stage of the Southern Motorway, traffic on Main South Rd is likely to double in the next 15 years. Its construction will halve the travel time between Rolleston and the end of the motorway in Christchurch at peak-times (from around 30 minutes down to 15 minutes). NZTA also expects a 40% reduction in fatal and serious crashes.

    The project will reduce the high traffic volumes on State Highway 1 (Main South Rd) through Templeton by separating local traffic from traffic heading to Lyttelton Port and the central city. There will be 2000 fewer trucks a day through Templeton.

  • Indicative impression of how a rail siding will operate at the Port of Taurangas International freight hub at Rolleston

    COLLIERS INTERNATIONAL 06.06.15

    The rapid growth of Canterbury as a transport and logistics hub has been given a major injection with the construction of hefty new inland ports for Lyttelton Port Company (LPC) and Port of Tauranga respectively (PoT)

    While the rebuild may have hastened decision making, the hub port strategy had already been earmarked to cope with the rising demand in the industrial sector and the consequent need for efficient transport of cargo particularly around the lucrative dairy export trade.

    Rolleston, with its excellent road and rail connections, is the beneficiary of both new inland ports LPC buying 27ha next to Carter Groups new development and Port of Tauranga taking 15ha at Izone Industrial Park for a freight hub, after last year buying a half-share of Prime Port Timaru for $21.6 million.

    Both sites are in the middle of a dairy

    mecca, north of one of Fonterras largest sites, Clandeboye, processing up to 13.2 million litres of milk a day, about 40 per cent of all Fonterra South Island milk. Synlaits plant is south at Rakaia and Westland Milk Products is also at Rolleston.

    Scheduled for completion in June, Taurangas new Rolleston site will be an export hub for primary products and particularly dairy exports, fish and fruit. The business will spend in excess of $20 million on the land and infrastructure.

    The Christchurch, Rolleston and Environs Transportation Study (CRETS) completed for Environment Canterbury in 2007 identified the need for an inland port for greater Christchurch.

    Izone was able to use CRETS in its negotiations with Port of Tauranga, resultingin its land purchase late 2013. Design was undertaken and a resource consent process worked though by October 2014. A

    construction contract was let shortly after and work began in February this year. The tran