Juliet Rowan is a reporter for Bay of Plenty Times Weekend

Bay's billion-dollar building boom

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The value of building projects in the Bay is expected to reach $1 billion this year as the region basks in a record-breaking construction boom.

Almost $800 million in consents were issued in Tauranga and the Western Bay for the nine months to the end of September, shattering by nearly 30 per cent last year's record for the same period of $600m.

"We have a very good chance of reaching a total of $1 billion for the year," Priority One interim chief executive Greg Simmonds told the Bay of Plenty Times.

Mr Simmonds said the region was on track to hit the billion-dollar mark if similar values of consents are issued for the rest of the year compared to what was issued in October, November and December last year.

Priority One interim chief executive Greg Simmonds says consent figures for the year are likely to reach $1 billion. Photo/John Borren
Priority One interim chief executive Greg Simmonds says consent figures for the year are likely to reach $1 billion. Photo/John Borren

Last year, consents for the year totalled $850m.

The latest figures, provided to the Bay of Plenty Times by Priority One, showed almost 50 consents for commercial developments worth more than $1m had been issued so far this year.

The highest-value development is a $14.7m office complex in central Tauranga.

Tauranga City Council had already issued seven consents for commercial developments worth $4m or more this year, and Mr Simmonds said the focus on commercial construction was particularly pleasing.

"It shows strong confidence in the business community, with companies expanding or moving their operations here from elsewhere."

Tauranga Chamber of Commerce chief executive Stan Gregec said it was great to see big projects and a mix of commercial developments.

"It shows that Tauranga is maturing in all sorts of ways and becoming a more sophisticated and grown-up city."

Tauranga MP Simon Bridges said the hefty projects were a pleasing sign that large investors back the long-term prospects of the region.

Tauranga MP Simon Bridges says investor confidence is the Western Bay region and economy is very high.
Tauranga MP Simon Bridges says investor confidence is the Western Bay region and economy is very high.

"That shows that this isn't just some housing boom. It's also serious commercial players operating in the Bay, and that's important because as we have more people, we need more and better jobs."

The consent figures are the highest for the period in any year since Priority One began keeping records in 2003.

They show $773m of consents were issued in the combined Western Bay/Tauranga region in the first nine months of the year.

This represents a 29 per cent jump from the total for the period last year, which already saw the figures reach record highs.

So far this year, Tauranga City Council has issued $564m in commercial, residential, government and community consents, 16 per cent more than in the same period last year.

Forty-eight consents for commercial developments each worth more than $1m were issued, and in three separate months, six or more consents for such developments were issued.

The value of commercial consents issued by Tauranga City Council jumped from about $80m in 2007 to $200m last year, and already this year, the council has issued commercial consents worth a total of more than $160m.

The latest high-value project is a $3.2m factory and coolstore development at Tauriko Business Estate.

Mr Bridges said confidence in the local economy was high, perhaps the highest it's been, and the figures proved there was a boom.

"When you combine it with kiwifruit, it makes it pretty clear why we're probably sitting on the strongest regional economy in New Zealand."

The boom also differed from past growth spurts, which had been cyclical and up-and-down.

"This seems like it's going to be with us for some time to come because it's based on a number of other sectors in the local economy going well, and also very strong population growth."

GROWTH AROUND TAURANGA

Western Bay of Plenty District Council issued consents worth $209m in the nine months to the end of September -- an 81 per cent jump from 2015.

The council's outgoing mayor, Ross Paterson, said the high number of consents reflected an influx of city dwellers taking advantage of high property prices to cash up and move to coastal locations such as Katikati and Omokoroa.

"They want an environment that they are in touch with - close to the ocean beach, close to the bush [and] all that sort of social rewarding stuff."

Western Bay of Plenty District Mayor Ross Paterson says a thriving kiwifruit industry and desire for coastal lifestyles is fuelling development in his region. Photo/John Borren
Western Bay of Plenty District Mayor Ross Paterson says a thriving kiwifruit industry and desire for coastal lifestyles is fuelling development in his region. Photo/John Borren

Mr Paterson said the figures showed the outlying regions around Tauranga have fully emerged from the stagnating effects of the global financial crisis, while growth in the kiwifruit crop was fuelling demand for more packhouses, coolstores and worker accommodation.

"That's part of the driver, that vibrant industry, now that we've moved through PSA."

Water, wastewater and roading infrastructure installed in the late 1990s and early 2000s was also allowing the region to develop effectively now.

"The council is finding itself in a great position. We are reducing debt substantially and we are in a position to accommodate growth."

RETIREMENT VILLAGE BOOM

Retirement villages feature heavily in the list of high-value commercial projects in the Bay, accounting for three of six developments costing more than $4m.

In March, Auckland-based Metlifecare Somervale was granted consent to build a $11.7m retirement village with 70 care units and 16 serviced apartments on Gloucester Rd at Mt Maunganui.

Metlifecare Somervale is building an $11.7 rretirement complex on Gloucester Dve. Photo/John Borren
Metlifecare Somervale is building an $11.7 rretirement complex on Gloucester Dve. Photo/John Borren

It is the second most expensive commercial project in the region this year after the $14.7m office development on the corner of Third Ave and Cameron Rd.

That complex is being developed by another Auckland-based company, Cameron Road JV Ltd.

Other retirement village developments include 16 new apartments at Althorp retirement home ($4.5m) and 20 new villas at Pacific Coast Retirement Village ($4.4m).

Number three in the list of consents is an industrial storage and office development at the Port of Tauranga which Priority One figures value at $10m.

The port's property and infrastructure manager Dan Kneebone confirmed work on a 22,000m² warehouse building at Sulphur Pt had begun and was due for completion early next year.

"The building is rail served and will be used for the storage of export cargo."

Other major infrastructure projects at the port included erection of two new ship-to-shore cranes due for completion next month.

The Port of Tauranga is building a 22,000m² warehouse building at Cross Road, Sulphur Point. Photo/supplied
The Port of Tauranga is building a 22,000m² warehouse building at Cross Road, Sulphur Point. Photo/supplied

Outgoing Tauranga mayor Stuart Crosby said the construction boom boded well for the future.

"It gives everyone a lot of confidence that our sub-region is continuing to grow across all facets - residential, commercial and industrial."

CONSENTS GRANTED FOR $4 MILLION-PLUS DEVELOPMENTS IN TAURANGA THIS YEAR

Cameron Road JV Ltd (Auckland)
Office development
Corner of Third Ave and Cameron Rd, central Tauranga
$14.7m

Metlifecare Somervale Ltd (Auckland)
Retirement village with 70 care units and 16 serviced apartments
33 Gloucester Rd, Mt Maunganui
$11.7m

Port of Tauranga (Tauranga)
Industrial storage and office facilities
Cross Road, Sulphur Pt
$10m

Teeco Investments (Mt Maunganui)
Commercial development with 29 two-bedroom apartments
436-438 Maunganui Rd, Mt Maunganui
$5.2m

Althorp Village Ltd (Tauranga)
Sixteen two-bedroom apartments (Stage 5)
9 Granston Dve, Pyes Pa
$4.5m

Pacific Coast Retirement Village Partnership (Christchurch)
Twenty new villas
Maranui St, Mt Maunganui
$4.4m

JSB Holdings Ltd (Tauranga)
Warehouse and offices
Poturi St, Tauriko
$4m

Source: Priority One


TOTAL COMMERCIAL CONSENTS ISSUED BY TAURANGA CITY COUNCIL

2016 YTD $162.7m

2015 $197.6m

2014 $105.8m

2013 $98.0m

2012 $101.9m

2011 $70.8m

2010 $78.5m

Source: Priority One

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