Demand for space in the Tauriko Business Estate has reached "near-record levels" as millions is invested in planned new buildings.
Tauranga real estate agents said demand from companies wanting to move to the business estate was better than before Covid-19 but industrial land was "extremely scarce".
City business leaders said the estate was one of New Zealand's biggest industrial parks and Tauranga's main source of industrial zoned land for businesses looking to move or expand.
Tauranga City Council's latest building consents report, for June, showed most consents valued over $1 million were for new buildings in the estate.
That included $2.7m for a new commercial factory with a detached office block, $2m for a new three-unit warehouse building and $1.5m for a Korean Community Centre, all on Matakokiri Dr.
Tauriko Business Estate director Bryce Donne said it was great to see new projects starting and people with the confidence to carry on despite the setback of Covid-19.
"We have another round of titles due to issue any day including that for Winstone Wallboards.
"This is the biggest single build to date at Tauriko and the jobs and other economic spinoffs which it will generate will provide a welcome boost to the area."
Earlier this year Fletcher Building announced it would be relocating Gib manufacturer Winstone Wallboards from Auckland to the Tauriko Business Estate.
The company planned to build a $400m state-of-the-art plasterboard facility.
Ray White Commercial managing director Philip Hunt said demand for lease properties in the estate was even better than before the Covid-19 lockdown, but there was a "dramatic shortage" of available premises.
Hunt, a Tauriko commercial and industrial specialist, said he would get an average of 10 to 15 inquiries for leases each week and in the past two weeks had leased about seven premises.
He said land to be released in the next stage of the development was already sold out.
"It is very limited. We are waiting for vacancies to come up," he said.
"We know of people who are moving because they have outgrown the space and we have people lined up to take their place. It is pleasantly positive."
Hunt said the new consents were mostly for Matakokiri Dr, which had many smaller 1000sq m lots.
"Demand for those has been exceptional."
However, he said that would likely be a problem going forward because there were no more smaller lots available for development at Tauriko for the next few years.
Hunt said many businesses were relocating to the estate from Waikato, Auckland and Mount Maunganui.
The area was popular because of its convenient roading networks and access to walkways and reserves.
"It isn't a concrete jungle."
Bayleys Commercial Tauranga sales manager Mark Walton said the estate played a "critical role" in supporting the Port of Tauranga, which was "New Zealand's largest export gateway and supply chain link for growth businesses within the Golden Triangle".
"Tauriko Business Estate is the only source of new industrial sites available in the region and industrial land is extremely scarce."
Walton said leasing activity in Tauriko Business Estate had been strong in the past six weeks, reaching "near-record levels" as vacancy rates remained under 2 per cent.
He said this signalled strong confidence from local businesses.
"We are seeing strong interest from businesses either relocating their distribution business from Auckland, manufacturers looking to expand and set up an additional manufacturing plant in the region or growth businesses (particularly exporters) looking for additional warehousing."
Walton said he expected high demand to continue for the next five years with such limited supply of vacant land and interest from growing businesses.
"Until we see some progress with the proposed Rangiuru Business Park it comes down to supply and demand for land.
"We are also likely to continue to see heavy Industrial businesses relocate away from the Mount Maunganui Industrial [area] as they become more affected by traffic and the Bay of Plenty Regional Council putting tighter controls on air quality in Mount Maunganui."
Tauranga Chamber of Commerce chief executive Matt Cowley said the Tauriko business area was important because it provided a balance of industrial zoned land on the southern part of the city.
"Tauriko also provides easy connection with State Highway 29 that connects the Waikato region with the Port of Tauranga."
Priority One chief executive Nigel Tutt said the Tauriko Business Estate was the second-largest industrial development in the country and therefore was very important to the Western Bay.
"It is our region's main source of industrial land for development, helping local businesses expand and new ones to move here.
"The need for industrial land in the Western Bay has grown significantly in the past five years. Bryce Donne and the team at Element IMF have done an excellent job in meeting that demand."
Working at the business estate
Jenkins Freshpac Systems Ltd moved its head office from Ōtara, South Auckland, to the Tauriko Business Estate in 2013.
The company, which provided print, packaging and handling solutions to the fresh fruit and produce industry, wanted to be closer to its kiwifruit customers and the Port of Tauranga.
General manager Jamie Lunam, who began working for the company in 2016, said it was a "fantastic move" back then.
"Quite a lot of staff were very eager to relocate down here and start a new life," he said.
"It was a bit of a visionary back then, but it [the estate] has really come into its own."
The company employed about 50 people who were "pretty much all still with us" and many lived in The Lakes and Pyes Pā areas too.
Since relocating to Tauriko, Lunam said the estate had become "very busy".
"It is quite surreal to see. It is pretty exciting to think that when we built here we were one of only a handful of businesses here and it has come a long way to what it is now."
He said the business had grown "quite quickly" and being based at the estate meant room for future expansion.
Mixup Concrete opened its new 9000sq m concrete plant at the estate at the end of June.
Locally-owned Base Up Contracting and HR Cement merged to form the new company and invested $4m into the Tauriko site due to a need to expand driven by demand.
Managing director Kyle O'Brien said Tauriko was chosen for the future residential growth and central position in the western Bay of Plenty sub-region.
"We have future-proofed ourselves and are excited about the growth around us."
Tauranga building consents - June 2020
- 262 building consents were issued for the month valued at $70,931,818
- 128 residential building consents issued in June for 134 new dwelling units
valued at $49,082,470
- 26 commercial building consents were issued for a total value of $16,618,540
Major consent applications issued - value over $1 million
419 Oceanbeach Rd
Two-level, five-bedroom dwelling with attached double garage, swimming pool,
and solid fuel heater.
242 Grenada St
Duplex with four single-level, two-bedroom dwellings with attached single garages
159 Matakokiri Drive
Three-unit warehouse building
69 Gargan Rd
Two-unit warehouse with offices
101 Maxwells Rd
Construct new teaching block (Block R) and internal renovations of two existing buildings (Blocks B and C) at Pillans Point School.
111 Matakokiri Drive
Korean Community Centre, with retaining wall
291 Matakokiri Drive
Commercial factory with a detached office block (Stage 2)
21 Hotuhotu St
Construction of a new two-level showroom, warehouse and powder coating plant $1,706,666
Source - Tauranga City Council