Roading and infrastructure contractor Fulton Hogan has commenced earthworks on the first 6ha of a giant Ruakura industrial development 3kms to the east of Hamilton's CBD.
Encompassing 480ha of planned logistics, industrial and commercial precincts, Stage 1 of the Tainui Group Holding (TGH) development will be anchored by a 30ha inland port which is due to open in the first half of 2019.
"We are initially seeking expressions of interest from companies looking to lease sites of around half a hectare [5000sq m] or more, in addition to prospective future tenants requiring smaller lots," says Sam Smith of JLL, which is seeking to lease the first 100ha of industrial land.
Smith says the Ruakura development has been recognised as a project of national significance by the New Zealand Government that, once completed, will bring major economic, social, environmental and cultural benefits to the Waikato and New Zealand.
"The 30ha inland port and dedicated rail siding, which will be gated and within secure borders, is now underway and immediately adjacent to the south of the inland port is 60ha of logistics-zoned land. The planned uses for this area are warehousing and distribution, container storage, container loading and unloading, along with biosecurity and customs operations."
Ruakura is located within The Golden Triangle - comprising Auckland, Waikato and Bay of Plenty - which accounts for 50 per cent of New Zealand's economic output, says Smith.
"The new logistics hub will link into the Waikato Expressway while the East Coast Main Trunk railway will run through the development. This will allow containers to be moved off roads and onto rail, and vice versa - linking both the Ports of Auckland and Tauranga and giving cargo owners a much greater supply-chain choice."
He says Ministry of Transport figures show roads carry more than 90 per cent of New Zealand's freight tonnage, with 42 per cent being moved within The Golden Triangle.
Smith says the massive project will be "a game changer" for the Waikato and potentially for Auckland and other areas of the country - offering greater scale and efficiency for importers and exporters to move cargoes as sustainably as possible.
"With Ruakura's rail system allowing many of the shipping containers to be transported by train, the current congestion on roads in Auckland and the Waikato can be expected to be alleviated.
"At capacity, it is expected that Ruakura will process 1 million TEU [twenty-foot equivalent unit] shipping containers per year. Ports of Auckland and Tauranga combined currently process about two million TEU per year."
TGH has joined forces with LINX Cargo Care Group to develop and operate the new port with LINX and one of its subsidiaries C3 limited, which have extensive experience in the industry.
Anthony Jones, Group CEO for LINX Cargo Care Group and Chairman of C3, says Ruakura will help boost confidence and growth in the New Zealand logistics supply chain by offering stable, efficient and cost- effective networks for importers and exporters.
Chris Joblin, TGH chief executive, says a consistent message the group receives from importers and exporters is that they want the freedom to choose between ports and shipping lines without being tied exclusively into either Auckland or Tauranga.
"This 'port neutrality' is a key part of the Ruakura offer as we will configure the rail and road connections north, south and east," Joblin says.
As well as providing a range of services to the region's exporters and importers, Smith says the Ruakura precinct has the potential to support 6000 to 12,000 jobs once completed - with Hamilton's lower cost of living being an attraction to a skilled workforce.
"Hamilton is also an ideal business location due to being relatively close to international shipping ports, Auckland International Airport, and the growing number of manufacturing, health, education, freight and logistics companies now based in the Waikato. It's less expensive to do business here compared to Auckland with employers able to tap into a growing youth population. The city is forecast to see a population growth of 74,600 residents - a 50 per cent growth - between 2013 and 2043, which would see Hamilton reach a total population of 224,800.
"With land in Hamilton being less expensive than Auckland and the fact that the city has low natural hazard risks for disasters like earthquakes or volcanic activity, Ruakura Port will tick a lot of boxes for potential tenants."
Smith says the Waikato development will take logistics companies from a position of having limited site options, to having the prospect of spending less on leasing top-class premises in a rail and road friendly location.
"In addition, they will also be located where retail and green space will be readily available - something they wouldn't normally see at traditional port sites. Those who sign on early will also have the ability to locate and build their ideal operations on the sites. It is for these reasons that Ruakura is expected to attract a lot of attention from prospective tenants."