Our biggest city is facing a shortage of available industrial and commercial land, writes Colin Taylor
Auckland is the nation's business powerhouse, contributing 36 per cent of the nation's GDP but, it needs to do better, according to Mayor Len Brown, at the launching of a new Economic Development Strategy.
Hailed as "a 10-year roadmap for Auckland" the goals in that strategy included an average increase of regional exports of more than 6 per cent a year, average annual real GDP increases of greater than 5 per cent, and average productivity increases of more than 2 per cent annually.
However, there is a major problem with expanding industry and creating more jobs - a lack of suitable land.
According to Auckland Council's Economic Development Department, there are more than 8000 hectares of business-zoned land in the region. Of this just under 1000ha is now classed as vacant, mainly in south Auckland, and this land is generally in small land parcels distributed within the metropolitan urban limits. Around 450ha of new business land is progressing through the planning process.
Taking a longer-term view, the Auckland Plan says the region will need at least 1400ha of additional business-zoned greenfields land to meet projected employment growth over the next 30 years.
"We must support and sustain the continued growth of Auckland and the process of economic transformation we have initiated, to develop a more export led and globally competitive economy," says Harvey Brookes, manager of Auckland Council's Economic Development Department.
"The provision of additional greenfield business land can be seen as an important part of the growth and development of Auckland's economy,"
Similarly, a statement from his department says: "Importantly it is expected that around 71 per cent of this future business land need (1000 hectares) would be for industrial activities (including manufacturing, warehousing, logistics and wholesale trade activities) given the larger land requirements for such activities. These activities usually require greenfield sites where purpose-built premises can be developed."
Earlier this year, in commenting on the release of the new Auckland Plan, Property Council chief executive Connal Townsend called for "a balanced and rational approach" to the provision of greenfields and brownfields land.
"The Property Council is yet to be convinced of the provision for adequate business land," he said.
Zoltan Moricz, senior director of research and consulting, for CBRE is an expert in the field of land availability.
He conducts regular six-month surveys of all land in the Auckland region zoned for industrial use which analyse vacant land supply and "take-up" trends over the past three years.
"While the emphasis of the report is on industrial, rather than overall business land, industrial is the area of most focus and concern in relation to land shortages and location," says Moricz.
His latest survey shows there is 1148ha of vacant land in the Auckland region contained in 1362 parcels and classified in three categories:
Full vacant greenfield parcels with no buildings;
Potentially vacant parcels that are underdeveloped or with some vacant land that could be made available for development; and
Brownfield parcels usually occupied by outdated industrial buildings or vacant land used for yarding.
"However, not all these parcels are available for development," Moricz says. "For example, some fully vacant parcels have been set aside as reserves.
"And some brownfield or potentially vacant sites may not be developed because their occupiers require large amounts of outside yard space or a big area for the storage of containers, vehicles or materials.
"Land might also be held for expansion by an existing tenant or it might be brownfield land that currently has a lease in place."
Though the majority of business-zoned land has been taken up for industrial use, 20 per cent has been taken for other uses.
Retail has taken up 11 per cent of the non-industrial land, and other uses include churches, educational facilities and recreational buildings. The take-up of vacant property also includes land for roads and parking.
Another problem for big companies is that 61 per cent of available industrial land is in parcels of less than 0.5ha.
"While there are 1362 fully, potentially, or brownfield 'vacant' parcels across the Auckland region, only 240 sites are larger than one hectare," Moricz says. "And if an industrial user requires a site for development right now, the number of sites available reduces to only 103 property options with the majority not currently available for development."
For firms seeking sites of 4ha or more, the number of options reduces to 21, and if the need is for heavy industrial use, there are only seven properties now available in the whole Auckland region.
Another impediment to zoning more land for industry and business is alluded to in the statement by the council's Economic Development Department. "These greenfield areas present development opportunities that would provide considerable economic benefit to the local area and the provision of new jobs. However, this will inevitably require trade-offs as local residents may want to keep existing areas on the urban fringe rural.
Such examples include the recent private plan change lodged by the Stevensons Group to rezone approximately 360 hectares of rural land in Drury South for industrial activities."
A residents' group called the Drury and Ramarama Protection Society has waged a highly publicised campaign against the Stevensons industrial park proposal, with its chairman Peter Mathias claiming at least 90 per cent of local residents are opposed to it. The society even set up "clinics" to help locals with submissions against the project before an October 16 deadline.
A stated aim of the society is: "To protect and preserve the rural environment of the Drury and Ramarama area to ensure the rural integrity is not compromised."
With metropolitan Auckland marching inexorably into the countryside, and the increasing demand for more business land to feed the region's economic growth, there are likely to be many more such residents' protest groups seeking to protect their rural and lifestyle block environments.
"Which effectively places Auckland Council in the unenviable position of being between a rock and a hard place.
Auckland's land snag
Situation: Auckland has 8000+ha business land
Available: 1148ha of vacant land
Problem: Mostly small blocks, few big sites
Required: At least another 1400ha
Opposition: Rural residents oppose rezoning