An unseen industry, worth billions, is behind the online products delivered to your door.

In a few short years – by 2026 – 83 per cent of New Zealanders will be shopping online (up from about 66 per cent now).

That boom has already seen New Zealand's online retail spending rise 10 per cent year on year to June, according to NZ Stats, but brings with it some major logistical challenges.

With the rise in online shopping comes higher expectations. Customers want goods delivered quickly, seamlessly and they are exhibiting mounting impatience – no easy challenge to meet.

Delivery is an enormous part of the promise made by online retailers which puts an increased emphasis on the property strategy put in place by operators and their landlords.


"Globally, e-commerce related customers account for about 60 per cent of Goodman's new developments," says James Spence, director of investment management for Goodman . "There's the large e-commerce players such as Amazon, or, the logistics businesses who service them, as well as retailers who are reconfiguring their supply chains to incorporate e-commerce into their business."

"E-commerce has transformed logistics around the world. While we're yet to see the immediate impacts in New Zealand, NZ Post is thinking 5-10 years ahead so we're primed to take advantage of the coming boom."

"When we partnered with Goodman to build, we knew we could tap into their expertise with e-commerce around the world, the technology that leading e-commerce companies are introducing, so we can cope with the growth we're seeing," says Hamish Plimmer, NZ Post's general manager, property & procurement. "Modernising supply chains is only going to get more and more important for us."

While Goodman keeps an eye on other centres around New Zealand, Auckland is still the critical hub for logistics clients, close to the source of goods - ports, airport and inland ports - and, more importantly, customers. The trend is for supply chains to be close to dense population centres.

Evan Sanders, Goodman's portfolio manager for Highbrook, points out that with increasing consumer expectations, (expecting same or next day delivery) locating logistics centres near the biggest markets and transport hubs is crucial.

"Transport time and costs to make that last mile of delivery efficient is a huge part of e-commerce," he says. "having the right land, close to consumers, is the most important part. One big truck load comes into a logistics centre, but then there are a large number of smaller vehicles heading out on shorter distances. So you've got to be close to key transport hubs."

Auckland alone accounts for 37 per cent of New Zealand's online spend, with the number of transactions even higher than that as shoppers buy more lower value items.

"Investment in the technology fit-out inside the warehouses and properties has been a priority for clients like NZ Post," says Sanders, "So as a landlord we need to manage changing needs, as we've seen e-commerce transform requirements overseas. We're best placed to do that in Auckland, where we have the experience and the properties."

For example, NZ Post's operations at Highbrook include CourierPost, Contract Logistics and Auckland Regional Mail Service Centre. Collectively these businesses occupy more than 45,000sqm of warehouse space, with the mail centre typically handling two million pieces of mail every day.

The CourierPost facility which handles the national parcel delivery service is directly benefitting from the boom in e-commerce and is now handling up to 18,000 items per hour. This reflects growth of 33 per cent over the last five years. The design and flexibility of this 20,000sq m purpose-built space has facilitated CourierPost's business growth.

"We have global expertise in so many styles of logistics buildings, with embedded relationships that we can draw on for design or technology," Spence says.

Online sales in New Zealand are just over 8 per cent of total retail sales, predicted to rise to just under 18 per cent by 2021 (source: BNZ and Stats NZ) and Spence says: "In China, it's already a jaw-dropping 25 per cent of total retail sales. Given e-commerce growth impacts demand for industrial property, as one of the world's largest industrial property specialists, Goodman is set to benefit from this."

As the penetration of e-commerce continues to grow in New Zealand, Goodman's industrial property portfolio will continue to meet - and anticipate - the growing volume and sophistication of demand.