Countdown begins to port opening of massive $1 billion Ruakura Superhub

At 490 hectares, the Ruakura Superhub dwarfs anything of its kind in Australasia, so it’s little surprise people looked at Tainui Group Holdings chief executive Chris Joblin like he was “crazy” when he said its biggest risk was being too small.

With the inland port precinct of TGH’s $1 billion-plus multi-use, purpose-built development at Hamilton about to open, Joblin says it was his genuine concern for the logistics, industrial, commercial and residential hub that is “driving some important strategic changes in the New Zealand landscape”.

Deemed a project of “national significance” by the Beehive during its 16-year journey from the drawing board to the big logistics structures rising today beside the Waikato Expressway and Auckland-Tauranga rail line, the Ruakura Superhub is actually a supply chain cog of global significance, says Joblin.

“People talk about the [economic] golden triangle of Auckland, Hamilton and Tauranga but increasingly there is a connection of that region back to the eastern seaboard of Australia and Asia. There’s another triangle forming there and people are just starting to get their heads around what that means.

“That’s definitely top of mind for a lot of tenants. Ruakura is now recognised as a pre-eminent location for logistics, and as people look at their supply chains and make those real strategic decisions on where they place their distribution centres for the next 20 to 30 years and beyond, Ruakura is the place to be.”

The “golden triangle” is home to around half the total population of New Zealand and generates 50 per cent of total economic activity and 65 per cent of total freight flows.

The Superhub’s broadly equidistant location between the major export and import seaports of Tauranga and Auckland and its arterial route connectivity to the rest of the country means “Hamilton is the most efficient place in the country to do logistics”, Joblin says.

The 30ha inland port, a joint venture between TGH and NZX-listed Port of Tauranga and a cornerstone of the massive development, is finished and will open late next month or early August, he says.

More landmarks in stage one of an adjacent 89ha logistics precinct will open for business within six months. Lessees include a 40,000sq m distribution centre for Kmart due to start operating in September, a 13,000sq m cold store facility for Big Chill and a 16,000sq m cold store for shipping giant Maersk.

Joblin says with “really strong demand” for sites in this first 35ha of the first stage, TGH is now preparing to kick off the next stage, probably later this year or early next year with a new lineup of tenants.

The company, established in 2003 to be the commercial development and management arm of the Waikato-Tainui tribe, is working with “some household names” now interested in setting up shop at Ruakura, he says.

“It’s going really well - we’re going to close out this development reasonably quickly.”

Work has begun developing 40 residential sections at Tuumata Rise at the extreme northern end of the massive site, with a further 80 sections planned.

An aerial view of the soon-to-be-completed Ruakura Superhub - a major logistics and distribution hub being constructed in Hamilton by Tainui Group Holdings. Photo / Supplied

TGH has applied for consent to rezone this area from industrial to provide for up to 1300 medium-density dwellings, open space and a neighbourhood centre for around 3000 people.

Ruakura Superhub is “two or three times” the size of any similar development in Australia, but its significance and scale is probably still lost on the general public.

This is partly because only a third of it can be seen by motorists driving between Ruakura and the Waikato Expressway but also because householders could have “a greater understanding” of how their goods are moved around, says Joblin.

But logistics and freight players “get” Ruakura’s significance “as the region of logistics”, particularly overseas parties and those aware of the increasing focus on onshore distribution channels in New Zealand.

The opening of the inland port probably won’t lift the public’s comprehension of the supply chain much.

Joblin says there won’t be a lot to see other than the movement of containers and goods to and from the hub. They’ll belong to exporters using Ruakura to get their goods to the rest of the world via the seaports and importers distributing freight - “a two-way freight channel from one location” as Joblin puts it.

Initially, the inland port will use existing KiwiRail freight train services between Tauranga and the Port of Tauranga’s inland port Metroport in Auckland. As demand develops rail services specifically for Ruakura will be introduced, Joblin says.

He’s reluctant to divulge TGH investment figures in Ruakura, but agrees it is “heading for $1 billion-plus”.

“Once fully developed Ruakura will be worth many billions of dollars.”

Nor will he comment on likely returns to Waikato-Tainui people from the development but says revenue will be used to fund social initiatives and the project isn’t just about money-spinning.

“A lot of the benefits will be in productivity and efficiency gains ultimately captured by tenants and the general economy. TGH will get a small proportion of the overall economic benefit.”

While existing tenancy agreements were signed before inflation hit, the next wave of tenants will feel the impact of rising construction and rental costs, he says.