NEW PLYMOUTH FUTURE Project No: 51946
INDUSTRIAL LAND DEMAND Date: June 2021
ECONOMIC ASSESSMENT Client: New Plymouth DC
W: www.propertyeconomics.co.nz E: [email protected] P: 09 479 9311 PO: Box 315596, Silverdale 0944 Document Set ID: 8557372 Version: 1, Version Date: 04/06/2021
SCHEDULE
Code Date Information / Comments Project Leader
51946.4 June 2021 Report Tim Heath / Phil Osborne
DISCLAIMER
This document has been completed, and services rendered at the request of, and for the purposes of New Plymouth District Council only.
Property Economics has taken every care to ensure the correctness and reliability of all the information, forecasts and opinions contained in this report. All data utilised in this report has been obtained by what Property Economics consider to be credible sources, and Property Economics has no reason to doubt its accuracy.
Property Economics shall not be liable for any
made in reliance of any report by Property Economics. It is the responsibility of all parties acting on information contained in this report to make their own enquiries to verify correctness.
COPYRIGHT
© 2021 Property Economics Limited. All rights reserved.
CONTACT DETAILS
Tim Heath
Mob: 021 557713
Email: [email protected]
Web: www.propertyeconomics.co.nz
W: www.propertyeconomics.co.nz Document Set ID: 8557372 2 Version: 1, Version Date: 04/06/2021
TABLE OF CONTENTS
INTRODUCTION ...... 5
1.1. KEY RESEARCH OBJECTIVES ...... 6
1.2. INFORMATION SOURCES ...... 6
POPULATION AND HOUSEHOLD GROWTH ...... 7
INDUSTRIAL LAND SUPPLY ...... 10
INDUSTRIAL EMPLOYMENT ...... 18
4.1. INDUSTRIAL EMPLOYMENT GROWTH ...... 18
4.2. INDUSTRIAL EMPLOYMENT DISTRIBUTION ...... 20
INDUSTRIAL BUILDING CONSENTS ...... 21
FUTURE INDUSTRIAL GROWTH ...... 24
6.1. EMPLOYMENT AND LAND FORECAST 2020-2053 ...... 24
SUMMARY ...... 27
APPENDIX 1: TRAVEL TO WORK IN PARAITE AND GLEN AVON ...... 28
APPENDIX 2: INDUSTRIAL EMPLOYEE DEFINITION ...... 29
APPENDIX 3: INDUSTRIAL BUILDING CONSENT DEFINITION ...... 30
W: www.propertyeconomics.co.nz Document Set ID: 8557372 3 Version: 1, Version Date: 04/06/2021
TABLE OF CONTENTS
LIST OF TABLES
Table 1: NEW PLYMOUTH POPULATION AND HOUSEHOLD PROJECTIONS (2023 2053) ...... 9
Table 2: INDUSTRIAL SECTOR EMPLOYMENT SUMMARY...... 19
Table 3: NEW PLYMOUTH INDUSTRIAL BUILDING CONSENTS (2000 2019) ...... 22
Table 4: NEW PLYMOUTH INDUSTRIAL EMPLOYMENT GROWTH (2020 2053) ...... 25
LIST OF FIGURES
Figure 1: NEW PLYMOUTH DISTRICT POPULATION PROJECTIONS (2013 2053) ...... 8
Figure 2: NEW PLYMOUTH DISTRICT HOUSEHOLD PROJECTIONS (2013 2053) ...... 9
Figure 3: NEW PLYMOUTH INDUSTRIAL LAND SUPPLY ...... 11
Figure 4: NEW PLYMOUTH INDUSTRIAL LAND SUPPLY (MAIN URBAN AREAS) ...... 12
Figure 5: DISTRIBUTION OF INDUSTRIAL ZONED LAND (HA) ...... 13
Figure 6: DISTRIBUTION OF OTHER INDUSTRIAL ZONE LAND (HA) ...... 14
Figure 7: VACANT INDUSTRIAL GLEN AVON AND PARAITE ...... 16
Figure 8: VACANT INDUSTRIAL WAITARA ...... 16
Figure 9: VACANT INDUSTRIAL MOTUROA ...... 17
Figure 10: VACANT INDUSTRIAL INGLEWOOD ...... 17
Figure 11: INDUSTRIAL EMPLOYMENT TRENDS ...... 19
Figure 12: DISTRIBUTION OF INDUTRIAL EMPLOYMENT IN NEW PLYMOUTH (2020) ...... 20
Figure 13: DISTRIBUTION OF INDUSTRIAL BUILDING CONSENTS (2000 2019) ...... 23
W: www.propertyeconomics.co.nz Document Set ID: 8557372 4 Version: 1, Version Date: 04/06/2021 51946.4
INTRODUCTION
Property Economics has been engaged by New Plymouth District Council (NPDC) to undertake an economic assessment on the current and future industrial market across the District. This economic assessment is designed to provide a high-level assessment of long-term industrial demand (employment and land requirements) for the New Plymouth District set against the current industrial zone provision.
Long-term, in the context of this assessment, relates to the National Policy Statement on Urban Development (NPSUD) of 30 years to 2053. long-term infrastructure and spatial planning framework, as well as the Proposed District Plan (PDP) processes which focuses on a medium- to long-term timeframe.
The primary purpose of this report is to provide a robust economic foundation for any policy setting and rezoning requirements in the PDP. The report is based on the latest (March 2021) population growth projections for the District provided by Stats NZ High growth projection series. The High series is utilised to ensure Council have sufficient industrial zone land capacity to accommodate industrial growth if it were to occur at a faster rate than anticipated as the District has experienced over the last decade.
As such, this report assesses the current industrial market and determines the net additional industrial land requirement to meet future market requirements (in hectares). This will assist NPDC in their decision making regarding the appropriate provision of industrial zone land within the District for their PDP and to satisfy this aspect of s NPSUD obligations.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 5 Version: 1, Version Date: 04/06/2021 51946.4
1.1. KEY RESEARCH OBJECTIVES
The core objectives of this report are to:
• Determine the quantum and location of the existing industrial employment base in New Plymouth geospatially.
• Breakdown and analyse the existing industrial employment and business composition by sector in the New Plymouth District.
• Assess District industrial employment trends by sector on a temporal basis over the 2000- 2020 period.
• to 2053.
• Identify the geospatial distribution and quantum of industrial zoned land in the District at present.
•
• Determine whether any new / additional industrial land is required long-term to service the D appropriate NPSUD buffers.
1.2. INFORMATION SOURCES
Information has been obtained from a variety of data sources and publications which Property Economics consider to be reputable and reliable, including:
• Business Demographic Data Stats NZ
• NZ Census of Population and Dwellings 2018 Stats NZ
• Population and Household Projections Stats NZ
• Population and Household Projections NPDC
• Industrial Building Consent Data Stats NZ
• Operative District Plan Zones NPDC
• Notified District Plan Zones NPDC
• Current Vacant Industrial Zoned Land NPDC
• Population and Household Projections Stats NZ
• Satellite Imagery Google
• Topographic Maps ESRI
W: www.propertyeconomics.co.nz Document Set ID: 8557372 6 Version: 1, Version Date: 04/06/2021 51946.4
POPULATION AND HOUSEHOLD GROWTH
This section outlines recent, and projected future, trends in the levels of population and household growth in NPD.
The figure and table below show the latest Stats NZ Population and Household Growth Projections for NPD and an updated projection series from NPDC (orange line).
Stats NZ population projections are base-2018 population projections. These are the latest population projections published by Stats NZ based on data collected during the 2018 Census.
The final value, for the year 2053, is an extrapolation of the trended population projection using exponential smoothing. This figure is used because Stats NZ only projects out as far as 2048. While this is not a perfect substitute, for the purpose of estimating long-term trends it provides sufficient guidance.
Similarly, the NPDC projections provided reach as far as 2051. This has also been extrapolated based on exponential smoothing to account for the missing two years out to 2053.
Stats NZ Household projections are calculated based on assumptions made from Stats NZ (base-2013) about household growth i.e. the newest population projections are divided by the projected, average number of people per dwelling from Stats NZ household projections. This is done because, at time of publication, Stats NZ have not released base-2018 household projections. The household projections should therefore be treated as indicative and with caution.
-than- expected level of interest in the district; the 2020 population estimate is higher than Stats NZ High growth scenario would have projected, based on a linear trend. This could indicate that a higher growth trajectory is on track for the district. However, for the purpose of this analysis we use the NPDC projections to be consistent with the most recent capacity modelling completed as this informs the likely distribution of future growth for the district.
For the purpose of this assessment, we utilise a projection period out to 2053, with 2023 as the starting point of 30-year projections for the purpose of ensuring the demand assessment complies with the NPS-UD long-term capacity obligations.
The Stats NZ High growth scenario indicates NPD could reach almost 100,000 people by 2033. This is equivalent to an additional 1,050 on average per annum over the 2020 2033 period, or total growth of 13,630 (around 16% of the current population).
The NPDC projections have a more grounded 2033 figure and reach a population of 95,000. This is equivalent to growth of 7,000 net additional people over the 13-year time period, or, alternatively, an increase in net population of 8% over the 2020 total. An average net increase of around 540 people, annually.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 7 Version: 1, Version Date: 04/06/2021 51946.4
The Stats NZ High growth scenario would have NPD grow to 117,500 people by 2053. This is equivalent to total growth of 31,400 additional people over the 2020 2053 period, or around 950 additional people on average per annum.
The NPDC projections have a more grounded 2053 figure and reach a population of 106,000 people. This is equivalent to growth of 19,930 net additional people over the 33-year time period, or, alternatively, an increase in net population of 23% over the 2020 population base. This equates to an average net increase of around 600 people, annually.
Part of this historic high growth for the District can be explained by large increases in house prices across the country making more provincial locations comparatively affordable compared to those in the main centre (Auckland, Wellington, Christchurch, Tauranga, Hamilton). This has driven more people to find homes outside these main centres than initially thought in the 2013 base projections.
FIGURE 1: NEW PLYMOUTH DISTRICT POPULATION PROJECTIONS (2013 – 2053)
Source: NPDC, Stats NZ, Property Economics.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 8 Version: 1, Version Date: 04/06/2021 51946.4
FIGURE 2: NEW PLYMOUTH DISTRICT HOUSEHOLD PROJECTIONS (2013 – 2053)
Source: NPDC, Stats NZ, Property Economics.
TABLE 1: NEW PLYMOUTH POPULATION AND HOUSEHOLD PROJECTIONS (2023 – 2053)
Net Growth New Plymouth 2020 Projection 2023 2028 2033 2053 (2020 - 2053) District Estimate Nominal Percentage
Stats NZ - Low 85,700 86,500 86,800 84,800 -1,270 -1%
Stats NZ - Medium 87,700 90,600 93,100 100,800 14,730 17% 86,070 Stats NZ - High 89,700 94,900 99,700 117,500 31,430 37%
Population NPDC 88,000 91,900 95,000 106,000 19,930 23%
Stats NZ - Low 34,570 35,220 35,740 36,140 2,330 7%
Stats NZ - Medium 35,380 36,880 38,330 43,560 9,750 29% 33,810 Stats NZ - High 36,190 38,640 41,050 50,310 16,500 49%
NPDC 35,160 36,930 38,560 44,100 10,290 30% Households
Source: NPDC, Stats NZ, Property Economics.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 9 Version: 1, Version Date: 04/06/2021 51946.4
INDUSTRIAL LAND SUPPLY
This section assesses the geospatial distribution and quantum of industrial land provision in New Plymouth District. This also contains an assessment of the vacant industrial land supply within New Plymouth and its geospatial distribution. Both the raw zoned land and the quantity of vacant zoned land are quantified by the broad industrial catchment they fall into. This analysis informs the overall capacity the industrial sector within New Plymouth District has to accommodate growth.
Note that Property Economics do not consider out of zone, consented industrial activity in this analysis as it is not anticipated by the PDP.
Figure 3 following highlights the location of the current industrial land provision geospatially at a District level. Figure 4 provides a more focused New Plymouth urban area perspective on where industrial land is supplied within New Plymouth City, and the satellite townships surrounding the city.
The notified PDP agglomerates the legacy plan industrial zonings into General Industrial and Mixed Use Zones. This is so the PDP zoning framework is consistent with the National Planning Standards. For the purposes of this assessment Industrial Land includes General Industrial Zone and Mixed Use Zone land in the notified PDP. Other Special Purpose zonings are also identified where industrial type activities are located but are excluded for the purpose of contributing to capacity.
urbanised area. The primary industrial areas in New Plymouth are those in Paraite, Glen Avon and Moturoa. Smaller urban settlements outside of New Plymouth such as Inglewood, Egmont Village and Waitara provide additional industrial supply for both the wider district and their localised markets.
The main industrial areas of Glen Avon and Paraite have additional pipeline capacity that has not been included as existing supply. This capacity is Future Urban Zone land (FUZ), of approximately 25.8ha, that joins the two areas. This has not been included in supply as FUZ land does not have industrial activity as a permitted activity though it is acknowledged that this land is likely to become industrial in the future.
It is also important to note that vacant industrial land supply includes all industrial zoned land that has been assessed as vacant regardless of other constraints. While it is assumed that zoned land is ready for industrial activity this may not always be the case due to topographical constraints, flood prone areas, riparian boundaries, sites of archaeological or cultural importance, etc.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 10 Version: 1, Version Date: 04/06/2021 51946.4
FIGURE 3: NEW PLYMOUTH INDUSTRIAL LAND SUPPLY
Source: New Plymouth District Council, NZTA, ESRI.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 11 Version: 1, Version Date: 04/06/2021 51946.4
FIGURE 4: NEW PLYMOUTH INDUSTRIAL LAND SUPPLY (MAIN URBAN AREAS)
Source: New Plymouth District Council, NZTA, Google.
Figure 5 following identifies the total supply of General Industrial Zone land and the quantity of vacant General Industrial Zone land by major industrial hub PDP.
In total, there is 627ha of General Industrial Zoned land within the District. Of this, 218.3ha is currently vacant. This equates to a vacancy rate of around 35%.
The largest industrial area, Paraite, is over twice the size of the next largest area, Glen Avon, in terms of total industrial zoned land. Paraite contains more General Industrial Zoned land than the rest of the entire District combined. Consequently, Paraite has, by virtue of its size, more vacant land than the entire district combined also.
Glen Avon is the second largest industrial area in the District. There is more General Industrial Zoned land in Glen Avon than the balance of the district (excl. Paraite) combined. Consequently, this also translates into the quantity of vacant industrial land also.
It is worth noting that a large site within the Glen Avon area, the former Ravensdown site along SH3, has a resource consent for a new commercial hub (specialty shops, LFR, offices and a 75- room hotel). This site represents around 7.4ha of industrial land that, if the land use consent is given effect to, can be used for a non-industrial purpose. It has, however, been included as part
W: www.propertyeconomics.co.nz Document Set ID: 8557372 12 Version: 1, Version Date: 04/06/2021 51946.4
of the total General Industrial Zone area calculation, though does not impact the existing capacity of Industrial land as it is currently being developed.
The other industrial areas in New Plymouth are significantly smaller in size with the third largest area, Moturoa Waterfront, being under a fifth the size in terms of General Industrial Zone land. If the Special Purpose Port Zoning is also included as industrial land, Moturoa Waterfront would have a total industrial land area of around 114ha. Though we note that the Port Zone is a Special Purpose Zone intended primarily for Port activity where industrial type activity is permitted.
There is an uneven distribution of industrial land across the District as well as an uneven distribution of vacant land. The vast majority of industrial zoning, and therefore existing industrial capacity, is in the twin locations on the north eastern fringe of New Plymouth City, Paraite and Glen Avon.
While this does suggest that industrial growth is being well directed to minimise reverse sensitivities of zonings it may also have adverse effects on the transport network, particularly as the largest residential growth node of the district is on the opposite side of the city. This means workers in these growth areas must commute through the city to get to work exacerbating the level of congestion in the transport network. Appendix 1 contains a localised map of suburbs people travel from to work in Paraite and Glen Avon.
FIGURE 5: DISTRIBUTION OF INDUSTRIAL ZONED LAND (HA)
Source: New Plymouth District Council.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 13 Version: 1, Version Date: 04/06/2021 51946.4
In addition to the General Industrial Land the Mixed Use Zone land was also surveyed. This is because the legacy plan had previously enabled industrial use on some of the notified Mixed Use Zone areas and Mixed Use Zone does allow for some industrial uses as Discretionary activities. The quantity of Mixed Use Zone land is reported in the figure below by area.
There are no of Mixed Use ity. As a result, the majority of Mixed Use Zone land is around the CBD and surrounding other, smaller centres. There is a total of 67.1ha of Mixed Use Zoned land in the District and there is currently no vacant Mixed Use Zoned land.
City Centre has around 39ha of Mixed Use Zone land. Outside the City Centre, Glen Avon has the largest quantum of Mixed Use Zone land, with 8.8ha, significantly lower than the City Centre and e.
Also included in the survey are Special Purpose zonings that are zonings. These zonings either have industrial buildings / operations on them or allow industrial activities. The Special Purpose Zonings included are the Major Facility Zone and the Port Zone.
The only zone within these Special Purpose zonings that has any vacant land is the Port Zone.
FIGURE 6: DISTRIBUTION OF OTHER INDUSTRIAL ZONE LAND (HA)
Source: New Plymouth District Council
W: www.propertyeconomics.co.nz Document Set ID: 8557372 14 Version: 1, Version Date: 04/06/2021 51946.4
Combining Industrial and Mixed-Use Zoned Land in New Plymouth. Of this, only the General Industrial Zone has vacant land, of around 218ha. This translates into a vacancy rate of around 31%.
Adding in the other Special Purpose Zone land brings the total supply of land to 1,180.4ha and a total supply of vacant land of around 219ha. This translates to a vacancy rate of around 19%.
The figures following identify the vacant parcels of industrial zoned land as surveyed by NPDC. This is not intended to be an exhaustive identification or vacant industrial land, as a small number of vacant parcels fall outside the four areas we have shown. Instead, this exercise demonstrates the overall pattern of vacant industrial land within NPD.
Note that a vacant land parcel with Special Purpose Port Zone has been identified in Figure 9 as vacant. This land is included here for completeness but excluded for the purposes of calculating industrial land capacity. This vacant land is approximately 4,600sqm.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 15 Version: 1, Version Date: 04/06/2021 51946.4
FIGURE 7: VACANT INDUSTRIAL – GLEN AVON AND PARAITE
FIGURE 8: VACANT INDUSTRIAL – WAITARA
W: www.propertyeconomics.co.nz Document Set ID: 8557372 16 Version: 1, Version Date: 04/06/2021 51946.4
FIGURE 9: VACANT INDUSTRIAL – MOTUROA
FIGURE 10: VACANT INDUSTRIAL – INGLEWOOD
W: www.propertyeconomics.co.nz Document Set ID: 8557372 17 Version: 1, Version Date: 04/06/2021 51946.4
INDUSTRIAL EMPLOYMENT
This section looks at historic trends in industrial employment and the distribution of industrial employment in New Plymouth District. A particular focus is placed on areas with large amounts of General Industrial zoned land as these areas contribute the most to industrial sector employment. This section informs the current level of productivity of the industrial sector for the purpose of determining future employment growth and industrial land requirements.
4.1. INDUSTRIAL EMPLOYMENT GROWTH
The following figure shows the industrial sector employment trends for New Plymouth District.
Most industries had experienced steady levels of employment growth over the 2000 2020 period between 2000 and 2009. The subsequent year, 2010 (post Global Financial Crisis), saw approximately 400 employees leave the construction industry which contributed to the major decline in total industrial employment. The construction industry has made a steady recovery since then and now employs more than ever recorded.
The largest industry of employment among industrial employees in New Plymouth is Manufacturing. Manufacturing accounts for 37% of total industrial employment within the District as of 2020. Interestingly, as a percentage share this is significantly down on the 2000 level of 47% of total district employment. This is due to growing competitiveness challenges within the sector (around NZ as a whole), particularly internationally due to the relative cost of labour resulting in large labour-intensive businesses tending to relocate offshore while more capital-intensive businesses (leading to high labour productivity) are more likely to locate domestically. As a result, the Manufacturing sector has seen only moderate growth of 557 net additional employees (or 15% growth over 2000 base year).
Construction has seen the greatest employment growth over the 2000 2020 period with a total percentage increase in the number of employees of 157% over the 2000 total. In nominal terms this growth was 2,230 net additional employees. The construction industry in New Plymouth is now roughly the same size as the Manufacturing industry was in 2000 and is the second largest industry overall.
Transport, Postal and Warehousing has seen strong nominal and percentage growth over this period also. This is likely due to the advent of e-commerce making logistics a high value-added industry. Transport, Postal and Warehousing saw a net additional increase of 617 employees over the 2000 base year. This represents an increase of 50% over the base-2000 employment count total.
In total, the industrial sectors saw a net increase of 47% in total employee count over the 2000-base year. In nominal terms, there are 3,590 net additional employees working within
W: www.propertyeconomics.co.nz Document Set ID: 8557372 18 Version: 1, Version Date: 04/06/2021 51946.4
industrial sector above the 2000-base year. At present the District has a total industrial employee count of 11,300 (2020).
FIGURE 11: INDUSTRIAL EMPLOYMENT TRENDS
Source: Stats NZ, Property Economics.
TABLE 2: INDUSTRIAL SECTOR EMPLOYMENT SUMMARY
Growth 2000 - 2020 Proportion Industrial Sector 2000 2010 2020 of 2020 EC n %
A Agriculture, Forestry and Fishing 112 116 139 27 24% 1%
B Mining 43 94 98 55 128% 1%
C Manufacturing 3,648 3,902 4,205 557 15% 37%
D Electricity, Gas, Water and Waste Services 91 116 137 46 51% 1%
E Construction 1,417 3,081 3,645 2,228 157% 32%
F Wholesale Trade 1,156 1,265 1,216 60 5% 11%
I Transport, Postal and Warehousing 1,225 1,441 1,842 617 50% 16%
Total All Industries 7,692 10,015 11,282 3,590 47% 100%
Source: Stats NZ, Property Economics
W: www.propertyeconomics.co.nz Document Set ID: 8557372 19 Version: 1, Version Date: 04/06/2021 51946.4
4.2. INDUSTRIAL EMPLOYMENT DISTRIBUTION
The figure below shows the distribution of industrial employment at the Meshblock1 level in the form of a . Each point is scaled in size by the number of industrial employees working in that Meshblock. That is, the areas with the largest number of employees are yellow and opaque and areas with lower numbers of employees are more transparent.
This display gives a high-level overview of the of the most concentrated industrial sector employment nodes for the district.
Industrial sector jobs are not confined to areas zoned for industrial activity because of how industrial sector jobs are defined. A full definition of what constitutes an Industrial employee is in Appendix 2.
The majority of industrial employees are, unsurprisingly, in areas with large amounts of industrial zoned land and industrial, capital improvements (buildings, fixtures, machinery, etc.). The area with the largest amount of industrial employment in Paraite with around 3,700 employees, followed by Glen Avon with around 2,500 employees. The New Plymouth Centre City area has around 1,400 industrial sector employees and Moturoa / Port Taranaki has around 600.
The other areas that have a notable number of industrial employees are Waitara (450), Inglewood (400), Westown (300) and Motunui (200).
FIGURE 12: DISTRIBUTION OF INDUTRIAL EMPLOYMENT IN NEW PLYMOUTH (2020)
Source: ESRI, New Plymouth District Council, Stats NZ, Property Economics.
1 Meshblocks are the smallest geographic boundaries created by Stats NZ for the purpose of publishing Census data. They are approximately the size of a city block each.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 20 Version: 1, Version Date: 04/06/2021 51946.4
INDUSTRIAL BUILDING CONSENTS
This section of the report assesses new industrial building consent activity that has occurred within the District. This is to identify trends in construction of new industrial buildings within the territorial authority.
The following figure shows the total number of industrial building consents processed within the District over the 2000 2019 period. Farm buildings are not included as industrial buildings as they do not contribute to the total demand for Industrial Zoned land but rather for Rural Zoned land.
A full definition of what is classed as an, , can be found in Appendix 3.
There have been 623 industrial consents in New Plymouth District over the last 20 years. The average number of consents per annum has dropped off significantly over the past 5 years compared to the previous 15 with just 18 industrial consent applications on average, per annum over the past 5-year period compared to 35 on average over the previous 15-year period.
Part of this drop off may be attributed to increased output and productivity gains from capital investment (i.e., more machines less humans), the increased average value of building consents making development more expensive and increasingly efficient use of existing building footprints.
The average value of building consents over the past 5-year period was $18M per consent compared with just $11M over the entire 20-year period. While part of this increase can be attributed to inflationary causes (increased cost of construction) it is likely that a large portion of this increase is due to the design or architecture of modern industrial buildings, increased building code compliance and earthquake strengthening costs.
The change in industrial architecture can be seen in the average size of construction. The past 5-year period has seen the average size of construction among industrial buildings almost double in size compared to the 20-year total. The average industrial building consent over the past 5-year period was 946sqm compared to just 535sqm over the past 20-years. This is a preference shift for larger building footprints among most industrial sectors as it allows industrial businesses to leverage off economies of scale. As a result of this, while the nominal number of industrial consents has fallen, the amount of annual average consented floorspace has remained approximately the same.
Modern industrial buildings tend to be large, at-grade, high stud structures that maximise at- grade floor space, with space often measured by volume rather than square metre. More constrained industrial markets tend to provide smaller, ad hoc developments distributed within industrial areas with a highly fractured ownership pattern.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 21 Version: 1, Version Date: 04/06/2021 51946.4
These larger buildings tend to have more specialised architecture that is more expensive to build. This is reflected in the average cost per sqm increasing over the past 5-year period compared to the previous 20-years. As well as the average GFA of industrial buildings almost doubling, the average value per sqm of industrial buildings has also almost doubled. The average value of building consents per sqm over the past 5-years was $1,025/sqm compared to just $614/sqm over the past 20-year period.
TABLE 3: NEW PLYMOUTH INDUSTRIAL BUILDING CONSENTS (2000 – 2019)
Number of Value of Floor Area of Average Size per Average Value Year Consents Consents ($m) Consents (sqm) Consent (sqm) per sqm
2000 17 $2 3,525 207 $463
2001 25 $3 6,867 275 $460
2002 40 $5 10,498 262 $489
2003 22 $7 11,207 509 $610 2004 46 $11 22,321 485 $509
2005 34 $8 15,490 456 $531
2006 68 $19 32,724 481 $594
2007 36 $14 28,657 796 $477
2008 41 $9 17,579 429 $485
2009 35 $5 9,443 270 $579
2010 40 $6 12,441 311 $465
2011 36 $10 13,013 361 $743
2012 19 $4 6,917 364 $597
2013 45 $17 31,108 691 $541
2014 28 $15 25,383 907 $601
2015 24 $16 21,074 878 $736
2016 17 $26 19,019 1,119 $1,362
2017 13 $12 7,524 579 $1,558 2018 20 $28 28,970 1,449 $982
2019 17 $7 9,461 557 $742
5-year 18 $18 18,320 946 $1,025 Average
5-year Total 91 $89 86,048 - -
20-year 31 $11 18,676 535 $614 Average
20-year Total 623 $224 333,221 - -
Source: Stats NZ.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 22 Version: 1, Version Date: 04/06/2021 51946.4
The following figure shows the main urban areas over the past 20 years at the Meshblock level. Meshblocks with less than one industrial building consent were not mapped.
The main areas of industrial activity, Glen Avon and Paraite, had the largest number of industrial consents associated with them. Glen Avon had 144 industrial building consents applied for in the last 20-year period while Paraite had 137. There were also a large number of consents at Moturoa (34), Waitara (24),Westown (23), New Plymouth Airport (17), and Inglewood (15).
It is encouraging to see that the largest number of industrial consents over the past 20-years has occurred in areas designated specifically for industrial activity to occur. However, over the long term there will likely be a build-up of industrial employment on one side of the city (eastern New Plymouth) which may cause some inefficiencies with employee accessibility.
FIGURE 13: DISTRIBUTION OF INDUSTRIAL BUILDING CONSENTS (2000 – 2019)
Source: ESRI, Stats NZ, NZTA.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 23 Version: 1, Version Date: 04/06/2021 51946.4
FUTURE INDUSTRIAL GROWTH
This section The growth projections are based on a proprietary employment and land forecast model developed by Property Economics. The inputs of the model are summarised in the following subsection.
6.1. EMPLOYMENT AND LAND FORECAST 2020-2053
Property Economics have projected industrial employment for New Plymouth out to 2053, factoring in changing labour force participation rates over the period. The key inputs utilised in these projection series are the NPDC projection series (refer Table 1) and Stats NZ business demography data (2020).
This section also translates the employment forecasts (by category based on 2nd level ANZSIC categories) into land requirements based on dynamic employment to land ratios in line with the NPSUD guidelines.
The sector projected employment for the following areas is based on a variety of factors including:
• National and Regional GDP and employment projections
• Population projections these are key both to labour force projections and population based employment.
• Labour Force projections (skilled / unskilled)
•
• Trended growth from the past 20 years
• Economic development directions
• Locational criteria by sector
• National / Regional and local supply of inputted goods and location of market
• Business sector analysis
• Increasing working age
Estimates of the quantity of future industrial land demand based on the employment projections on a sector-by-sector basis have been compiled based on projected employment and sustainable land efficiencies. As a result, the projections presented, represent the industrial land demand of efficiently utilised land, or in other words efficiently developed industrial land.
The calculation of these requirements include:
• The ratio of net land to employee ratio by industrial sector (these estimates are based on specific sectors and have been compiled based on empirical data such as regional rating databases).
W: www.propertyeconomics.co.nz Document Set ID: 8557372 24 Version: 1, Version Date: 04/06/2021 51946.4
• A locational assessment of efficient land utilisation (i.e. whether the local price is such that industrial land will be efficiently used).
• Price
• Historical trends by sector towards increased land or labour efficiencies
• Changes in technology (capital)
It is also important to note that these projections do not factor in changes in industrial land prices resulting from changes in price in surrounding areas. These factors can influence where businesses decide to locate, however given the unpredictability of land values, for the purpose of this report it has been assumed that relative prices between New Plymouth and surrounding areas remain constant over the forecast period.
Table 3 below illustrates the forecast industrial employment growth and potential level of additional industrial land demand for New Plymouth for the NPSUD identified periods. Note Employment Count (EC) is the Stats NZ measure for employment in a geographic area.
TABLE 4: NEW PLYMOUTH INDUSTRIAL EMPLOYMENT GROWTH (2020 – 2053)
Net Growth Industrial Activity Growth 2020 - 2053 2020 2023 2033 2053 2020-2053
District Industrial Employment Base 11,281 11,522 12,753 14,545 +3,264
Net Additional Land Requirement (ha) - 10.7 27.7 91.3
Infrastructure Addition (ha) 13.9 36.0 118.7
Net NPS Additional Industrial Land 16.7 43.2 138.3 Requirement (ha)
Current Vacant Industrial Zoned Capacity (ha) 218.3
Estimated Residual Industrial Land as at 80.0 2053 (ha)
Source: Stats NZ, Property Economics.
by 2053 is forecast to be nearly 4,900 ECs higher compared to the 2020 base year. Projected net growth averages approximately 146 new industrial employees per annum to a total district industrial employment base of just over 16,100 by 2053. This total net growth in industrial employment equates to an increase of 43% by 2053 above the 2020-base year.
This growth in employment translates into a net industrial land absorption of 91ha over the period to 2053. That is, around 91ha of undeveloped industrial land (net) will be required over this period. When accounting for infrastructure that will be required to service this land, this increases to an additional 119ha (rounded) of undeveloped industrial land (gross) will be
W: www.propertyeconomics.co.nz Document Set ID: 8557372 25 Version: 1, Version Date: 04/06/2021 51946.4
required over the 2020-2053 period. After accounting for the NPSUD buffer, a total of around 138ha net additional industrial land capacity will be required in the District by 2053 to accommodate projected industrial growth / demand.
There is currently a total of 218ha of vacant General Industrial Zone land in the District. This exceeds the capacity required under the NPSUD by around 80ha. That is, there is a significant provision of industrial land within the District at present sufficient to accommodate long-term demand on the basis the existing provision is developable.
Including other zonings such as the Port Zone, Airport Zone and Major Facilities Zone adds a further capacity, increasing the overall residual land capacity further.
This suggests that there is currently no need to zone any additional Industrial land within the PDP. However, the levels of industrial land capacity and vacancy rates should be monitored on an ongoing basis moving forward to ensure major industrial innovations to the current trend do not drastically impact capacity sufficiency.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 26 Version: 1, Version Date: 04/06/2021 51946.4
SUMMARY
industrial sector has experienced steady growth over the past 20-years. The industrial sector has expanded and now supports around 11,300 jobs across the District. Capital development of the industrial sector has seen an increase, in the most recent years, of the average size and value of new industrial buildings constructed in the district, indicating a modernising sector.
There is a significant quantity of industrial zoned land within New Plymouth. Most of the industrial land is situated in the north eastern fringe of New Plymouth, Paraite and Glen Avon, and this land accounts for most of the present capacity in terms of vacant land.
This large supply of industrial zoned land provides choice for industrial users, particularly for industrial users that require large amounts of contiguous land to build modern, large-scale industrial premises.
The economic analysis indicates that NPDC has sufficient industrial zoned capacity to accommodate future industrial land requirements over the long term.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 27 Version: 1, Version Date: 04/06/2021 51946.4
APPENDIX 1: TRAVEL TO WORK IN PARAITE AND GLEN AVON
The following map identifies the number of workers in each suburb that travel to work in Paraite and Glen Avon each day. The size and number within the bubble indicate the total employee base within that suburb that work in Paraite and Glen Avon.
This does not represent the full extent of workers in these areas, but a localised catchment to demonstrate a significant portion of workers must travel through the CBD to get to work.
Source: Stats NZ, Bing, NZTA.
While there will likely be no need for net additional industrial land within the District, and not over the life of the PDP, there may, however, be significant efficiency gains from a redistribution of industrial land. The high concentration of industrial land in Paraite and Glen Avon may be generating negative externalities on transport network as it is on the opposite side of New Plymouth to significant residential growth nodes where a large number of industrial workers live.
W: www.propertyeconomics.co.nz Document Set ID: 8557372 28 Version: 1, Version Date: 04/06/2021 51946.4
APPENDIX 2: INDUSTRIAL EMPLOYEE DEFINITION
Property Economics utilises the 2006 Australian and New Zealand Standard Industrial Classification (ANZSIC) as guidance, whereby businesses are assigned an industry according to their predominant economic activity.
Industrial activities in general refer to land extensive activities, it includes part of the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction, and manufacturing; and part of the tertiary sector, which involves distribution of manufactured goods. The employees work for the following sectors are considered an industrial sector employee:
10% of Agriculture, Forestry and Fishing 10% of Mining 100% of Manufacturing 30% Electricity, Gas, Water and Waste Services 100% of Construction 100% of Wholesale Trade 100% of Transport, Postal and Warehousing
W: www.propertyeconomics.co.nz Document Set ID: 8557372 29 Version: 1, Version Date: 04/06/2021 51946.4
APPENDIX 3: INDUSTRIAL BUILDING CONSENT DEFINITION
pose of assessing building consents. The building classifications used are those adopted by Stats NZ and the codes of those buildings use the 2014 definition.
• 2611 Storage buildings • 2621 Utility buildings e.g. electricity, water transmission • 2629 Factories and other industrial buildings
A list of examples for 2629 Factories and other industrial buildings is provided for additional clarity. This list not intended to be exhaustive but rather to give an idea of the types of buildings that fit within the category.
• Packing shed • Optic network utility • Bakery • Packaging shed • Sawmill • Portacom • Steel works • Printer bindery • Winery • Radio studio • Newspaper printing • Recording • Factory • Recycle transfer station • Workshop • Research laboratory • Foundry • Spray painters • Couriers • Sub station • Industrial • Timber yards sawmill • Film studio • Transfer station • Abattoir • Unit transformer project • Freezing works • Vehicle testing station • Boiler house factory • Water purification plant • Car wrecker • Workshop industrial • Covered yard freezing works • Dairy factory • Depot • Drying kiln sawmill • Factories and industrial buildings • Fertilizer works • Film post production • Hanger • Home kill processing plant • Industrial building • Joinery shop • Laundry dry cleaners • Lighthouse
W: www.propertyeconomics.co.nz Document Set ID: 8557372 30 Version: 1, Version Date: 04/06/2021