Special Report – Ruakura SuperHub JANUARY 2021

Ruakura SuperHub lends impetus to Waikato

Warren Head Hamilton’s leap into an expansionary KEY POINTS decade, as one corner of the upper North • Ruakura is amongst New Zealand’s Island’s much-vaunted Golden Triangle, largest developments, spanning is picking up momentum as industrial industrial, logistics, commercial, business gains in confidence. retail and residential development Adding its weight to the economic areas. impetus is the new Ruakura SuperHub • Located at an emerging ‘sweet development by Tainui Group Holdings. spot’ for New Zealand’s supply TGH was created as the inter- chain, it will be anchored by a generational investor and guardian of the 30-ha inland port. The first 92-ha commercial assets held on behalf of the stage is now in development by 76,000 members of the Waikato-Tainui TGH, which includes the first 9 people. hectares of the inland port being The TGH asset portfolio includes jointly developed with Port of property, hotels, fixed income (leases), Tauranga, in a 50/50 joint venture. primary industry (farms, forests), direct • The Ruakura SuperHub inland port investments (Waikato Milking Systems), and adjoining logistics hub is on and equities. Over the last five years track to open to early/mid 2022. TGH has been actively diversifying to • The inland port will be serviced by spread risk against any sector high-capacity rail and roading experiencing a downturn. infrastructure, with the East Coast An asset that has been resting on its main trunk rail line running along books for 25 years is starting to emerge the port’s northern boundary and and of such proposed scale as to be the new Waikato Expressway astounding in its ambition. (SH1) on the eastern boundary. The emergent 490 hectare Ruakura • Initially, rail services will be SuperHub is located on the eastern provided by the existing MetroPort fringe of Hamilton with 192 hectares Jamie Strange, Labour MP for Hamilton East (shown with the masterplan for trains running between Auckland earmarked for logistics and industrial Ruakura SuperHub), has accalimed the vision in TGH in bringing forth a project and Tauranga. uses, including a planned 30 hectare that successive governments have readily supported as one of national significance. • The Ruakura precinct is estimated inland port. to accommodate 6000-12,000 jobs The masterplan shows capacity for an on a 490ha segment the 608ha of land changed to enable the logistics/ once it is fully developed (in inland port, logistics zone, in the immediate area that was returned industrial precinct.” around 2050). manufacturing zone, technology campus to iwi ownership in the historic 1995 Ruakura is now 8% of the city’s land and residential development. land settlement with the Crown. mass and as “an economic driver for the Commercial leasing of logistics space “At that time, we were faced with a city and the region it’s huge”. the economic analysis has an aim to is under way. On a showery afternoon in couple of choices for such a large area Previously, there has been balance competing needs. Still able to December, TGH welcomed guests on of land,” Mr Joblin told ‘Shipping competitive tension between TGH and be refreshed, even at this point, the site to confirm that PBT Transport will Gazette™’. “Carve it up as residential Hamilton City Council arising from project currently comprises 17 ha of lease the first logistics site under sections, the traditional approach by a TGH’s development of The Base inland port, 35 ha logistics operations, development. land developer, or find ways to unlock shopping centre, which was seen as 25 ha industrial production, 10 ha “We see a great fit between their the economic potential and retain weakening the retail strength of the wetland, and 5 ha service centre. The rapid growth as a leading express freight ownership of the land. CBD area. commercial development will be operator and our aspiration for Ruakura “TGH and the tribe looked at “I think we have a really strong followed by the possible addition of a to transform the Upper North Island economic models that took us down the relationship now,” said Mr Joblin. “A large residential sub-division. supply chain,” said Chris Joblin, chief industrial path.” rising tide floats all boats. We want to The full scale of Ruakura will only executive of TGH. These recognised the future of create economic prosperity knowing it is become visible over several decades. “As one of the first movers, PBT industry in the Golden Triangle, the going to benefit many people much Right now, the starting point is the have been able to secure a premium future placement of the Waikato wider than just us. timeliness of Ruakura, with ready corner location also conveniently close Expressway and realisation there was “There’s a realisation of the availability of land, transport to the inland port and the interchange for potential to inset the East Coast Main importance of working together.” infrastructure that is not just the Waikato Expressway,” said Mr Trunk Line in the middle of the Ruakura Previous economic feasibility and uncongested but not fully built, and the Joblin. estate. That led to the concept of an impacts assessments of Ruakura have regional positioning of the location mid- PBT has leased 10,000 m² for an industrial complex centred around an involved Castalia, Beca, and Boffa point in supply chains. initial period of 10 years, with rights of inland port. Miskell. Macro-economic trends were renewal. Occupancy will commence in “The next steps were to go through determined in-house and aspects of September 2022, following the opening the process of getting farmland zoned project execution has further involved of the inland port, two 800m rail sidings, into Hamilton City which took a external advisers. local link roads and the Waikato number of years, then get the zoning The precinct masterplan evolved from To page 16 Expressway, all scheduled to open earlier in 2022. Mr Joblin said that TGH is well advanced in talks with several other major occupiers. “Tenant enquiry has noticeably accelerated following recent co-funding Tauranga’s port key partner in inland port announcements for the construction of Port of Tauranga and the Tainui Group-subsidiary Ruakura Tauranga capacity expansion provided it develops new passing local roads, wetlands and other public Inland Port LP have linked in a long-term partnership to points on the East Coast line. infrastructure in partnership with the support development of the Ruakura inland port. For Port of Tauranga, Ruakura will have the potential to Government and Hamilton City Their agreement, signed in early 2019, allows cargo trains become an inland staging point for containers to and from the Council,” he said. running between MetroPort Auckland and Tauranga to service sea-port. Rather than dwelling unduly inside the coastal The footprint of the overall project Ruakura Inland Port, giving Waikato-based importers and terminal, containers would flow through to the inland port. has been likened in scale to the area exporters direct access to fast international shipping services KiwiRail operates up to 86 trains per week between from Parnell Rise across to Ponsonby in calling at Tauranga. MetroPort Auckland and Tauranga, carrying up to 9000 TEUs. Auckland. The agreement will see Port of Tauranga trains initially call The initial agreement has evolved into a JV agreement. This comparison was riveted home at at Ruakura up to four times daily with the ability for future Development of the Ruakura inland port is scheduled to the recent on-site ceremony; from within growth. The port has been modelling significant supply chain follow the completion of an adjacent Hamilton section of the the future inland port, it was just efficiencies with prospective customers and tenants of Waikato Expressway currently expected to be late 2021. possible to spot a PBT vehicle parked Ruakura. NZTA has already constructed an interchange at Ruakura. far in the distance on PBT’s future site. Rail is a key strategic reason for the location of the inland TGH and Hamilton City will build the dual carriageway The scale reflects the economic port. The inland port rail siding is currently being designed by connecting the interchange with Ruakura and then linking to growth rate of the Golden Triangle KiwiRail and contracts will be let in early 2021 for the the city. Once completed, Ruakura will have direct region (Auckland-Hamilton-Tauranga) construction of the inland port and rail siding. connections to both the new SH1 and the main East Coast which already handles ~50% of all New This is a double-track siding to enable longer (800m) railway, enabling efficient cargo flows throughout the North Zealand’s freight volume. Container Metroport trains to access the port from either direction. Island. volumes are forecast to grow 60% in At one end of the Golden Triangle, Port of Tauranga has Leonard Sampson, CEO-designate at Port of Tauranga, says container volumes by 2042. future potential to more than double its container capacity “Our view is that Ruakura is well positioned and has The inland port and the other from today’s 1.3 million level, which raises the question of rail significant opportunity for growth. It is a ong-term economic elements of the masterplan will be built capacity. TGH understands that KiwiRail could cope with a play.”

14 The New Zealand Shipping Gazette January 16, 2021 Special Report – Ruakura SuperHub COVID leading to change in logistics strategy Warren Head pay for one leg,” said Dave Christie, With COVID pandemic lockdowns Supply Chain strategy director at disrupting supply chains, there are Tainui Group. winds of change in the logistics sector. “With the size and scale of the land In response to the disruption there foot-print at Ruakura you can have the has been an acceleration of change . . . manufacturers in the precinct. The size as people look to shore up and secure of the industrial zone creates a centre- their supply chains,” Tainui Group of-gravity for the import-export Holdings CEO Chris Joblin told logistics supply chain in one place, Shipping Gazette™. which means you’re not moving empty Significant disruption in shipping containers around the country. has impacted delivery times globally. “The importer pays for the import This, in turn, has raised concerns about leg and the exporter for the outwards how companies continue to deliver on leg of 220kms to the Port of Tauranga.” expected service levels from customers. When Ruakura opens in 2022 it will Different thinking is becoming the service several separate supply chains, hot topic in supply chain circles — how export and import and domestic. do businesses continue to deliver high There is an imbalance of boxes. “For levels of service to customers while every three export boxes outwards, ensuring their supply chain is as there is one being imported, so shipping effective and efficient as possible? Pictured at the launch of PBT’s tenancy are Pierre Tohe, GM Engagement, TGH; lines bring in two empties to meet the Some of these new discussions in the Peter Tuck, GM Development, TGH; Dave Lovegrove, CEO, PBT; Chris Joblin, demand,” said Mr Christie. import-export market focus on CEO, TGH; Leonard Sampson, COO/chief executive designate, Port of Tauranga Ports of Auckland lands most of ‘reshoring’ i.e.; bringing manufacturing and Richard Jefferies, GM Commercial, TGH. New Zealand’s imports, and boxes are from offshore to onshore and also spread across distribution centres in forward deployment of inventories into TGH looked at Georgia Ports, and waste. By decoupling the supply chain Auckland for devanning, before being the markets, to achieve shorter lead- other ports, in the US and learnt that at Ruakura, you can reduce the amount diverted back to depots as empties. times for delivery with more reliable “aggregation of key infrastructure and of waste involved in moving the empty “Yet the importer pays for the entire service to customers. the size of the adjoining land footprint containers around the country, because round trip,” said Mr Christie, Mr Joblin notes the acceleration in is key. You’ve got to have scale in the you don’t have the containers moving estimating that as much as 40% of the trend to B-to-C, propelled by a ecosystem that fits around the very far to get to the product.” truck trips are of empty containers. surge in online shopping. Because of interchanges.” He describes this approach as the “The underlying principle of the online growth on the back of TGH executives talk of having a Coda intermodal model “but on Ruakura is to aggregate the three COVID, supply chains need to focus on ‘centre of gravity’ where sheer scale steroids”. separate supply chains into one supply fulfilment centres capable of same-day makes it is possible to create a volume “It is all about the economics of chain and then match these cargoes to or next-day delivery models. of cargo flowing through a region and empty containers,” added Mr Joblin. the most optimal transport mode. This “Those who have had good creating its own ecosystem. “You have to have the scale to will remove waste (the movement of fulfilment during COVID did very “This is then a perfect situation co-reside importers and exporters.” air) from all of these supply chains and well, those that haven’t have really where you decouple your supply chain For importers and exporters reduce transport costs for cargo owners. suffered and there’s recognition for from a container-based supply chain to currently paying for two-way transport This aggregation also supports the many that fulfilment out of a retail that of a palletised supply chain. (an empty leg in one direction and a transition of transporting cargos from store footprint is not going to work for “Most companies take the container full leg in the other direction), “what them long-term,” said Mr Joblin. to the product and that’s obviously a Ruakura unlocks is the need to only To page 16

HE IHIIHI NUKU! HE IHIIHI RANGI! PRIDE OF PLACE FROM LAND TO SKY

WELCOMING PBT TO THE RUAKURA SUPERHUB

Tainui Group Holdings warmly welcomes leading express freight operator PBT who have signed as the first commercial tenant for the Ruakura Superhub.

Get in touch today about the efficiency, resilience and sustainability of your supply chain at New Zealand’s industrial and logistics superhub.

We’d love to talk with you.

Now under construction and opening early-mid 2022. Dave Lovegrove, CEO of PBT (left) and Chris Joblin, CEO of Tainui Group Holdings on site at Ruakura Superhub

[email protected] 0508 RUAKURA (0508 782 5872) ruakura.co.nz

January 16, 2021 The New Zealand Shipping Gazette 15 Special Report – Ruakura SuperHub Funds flow for Ruakura Government’s $40 million investment in McLean. a range of ‘shovel ready’ projects, Hamilton City mayor Paula Southgate announced in October, will help fast-track said the Government investment provides development of the ‘Ruakura SuperHub’. critical support for one of the most The investment through Crown important long-term projects for Infrastructure Partners will take the form Hamilton City and the wider region, with of a $20 million grant to be applied to far-reaching economic, environmental public assets, roading and infrastructure and social benefits. and the balance by way of a TGH CEO Chris Joblin, says the concessionary loan. funding means the Ruakura SuperHub The Government’s investment will will be fully open for business 1-2 partially fund the critical transportation, years sooner than previously planned, bulk infrastructure and environmental bringing significant cost advantages to protection works such as the medium and large scale importers and Mangaonua Watercourse and a exporters. 10-hectare wetland. With this funding confirmed, TGH are These initial projects are estimated to now, jointly with HCC, moving ahead to directly create around 250 full-time finalise contracts and invite tenders from equivalent jobs over a three-year period, qualified contractors for construction TGH chief executive Chris Joblin presented PBT chief executive Dave Lovegrove not including jobs created by the inland work on these upcoming projects in the with a hoe-nukenuke paddle. port operation and planned logistics current earthworks season. buildings. Combined with $16.8 million of Parekawhia McLean, chair of Te funding confirmed from the Provincial Whakaakitenga o Waikato, the tribal Growth Fund in June, 2020, the governance entity for Waikato-Tainui, additional funding will unlock a total of PBT first freight firm tenant says the investment is a major statement $151 million of development projects by of confidence “that will rapidly flow TGH, Ruakura development partners and Tainui Group Holdings has signed The inland port will be serviced by through to our business community, Hamilton City Council. This is in express freight operator PBT (formerly high-capacity rail and roading wider community and our iwi”. addition to the $100 million expected to Peter Baker Transport) as the first infrastructure, with the East Coast “It also mirrors the significant be invested in logistics and industrial commercial tenant for the Ruakura main trunk rail line running along the investment from Waikato-Tainui in buildings over the next five years by SuperHub. Port’s northern boundary and the new realising the vision for Ruakura,” said Ms future tenants. Dave Lovegrove, CEO of PBT, says Waikato Expressway on the eastern “Ruakura’s location and exceptional boundary. road and rail links make it a natural Ruakura will be linked to the new THE NEW ZEALAND The Publisher: Mercantile Gazette Marketing Ltd., centre of gravity for our network four-lane Hamilton-Auckland 8 Sheffield Crescent, Russley, Christchurch 8053. services to access the rapidly growing expressway. Pavement will be upper North Island region, and beyond. completed this year on the 21.8km, SHIPPING “We are planning ahead for growth $607 million Hamilton bypass. With TM Editor: Warren Head and our initial 4,000m² logistics only one of the structures for the Editorial Address: P.O. Box 20-034, Bishopdale, facility at Ruakura SuperHub will be Hamilton section – 17 bridges and five GAZETTE Christchurch 8543. ©2021 Mercantile Gazette Marketing Limited. future-proofed for expansion.” interchanges – remaining to be built, All rights reserved. Neither this publication nor T: (03) 358 3219. With 21 branches and more than 800 the new road will open in late 2021. any part of it may be reproduced, stored in a M: 021 340 650 employees, PBT provides one of the TGH CEO Chris Joblin presented retrieval system, or transmitted in any form or E: [email protected] most comprehensive ranges of express PBT’s Dave Lovegrove with a hoe- by any means, electronic, mechanical, photo- courier and general freight services in nukenuke (the crooked paddle which is copying, recording or otherwise, without the prior News Tips: Freephone 0800 649 696. permission of Mercantile Gazette Marketing Limited. New Zealand – including express specific to Waikato/Tainui) as a taonga courier packets and parcels, general to mark the occasion. Historically, the freight pallets and full truckloads and paddle was used on waka transporting ocean and airfreight container goods and people and represents the movements. bends of the Waikato River.

Ruakura SuperHub lends impetus to Waikato From page 14 unlimited by today’s footprint. There is competition from the Ports “The demand is such that we are just of Auckland logistics hub at Horotiu, responding to those coming to us at the north of Hamilton, and KiwiRail has moment . . . and we’re ready now.” gone public in 2020 with its plans for a The interest is coming from people super-sized rail hub near Palmerston that want scale and an ability to North. However, a turning point for aggregate operations. They want to have Ruakura was Port of Tauranga signing significant supply chain networks on in late 2019 as joint venture partner throughout the North Island, with the in its inland port. ability for same-day or next-day Mr Joblin says businesses are starting delivery. And they’re looking to to make big strategic decisions “with a minimise seismic and tsunami risk.” long lens” and a “myriad of factors” is Peter Tuck, general manager firmly in Ruakura’s favour. development, notes the offer of logistics He notes that Auckland industrial space is flexible on allowing developers land costs are running at ~$850/m² and or lessors the right to expand an initial asks, “Where is the land for a 50,000m² property footprint as a tenant’s business warehouse and yard in Auckland? grows. “It’s not there, or only in very few TGH is having discussions with some locations and expensive locations. We overseas companies, including a can accommodate a 50,000m² company seeking an alternative location building or 100,000m² and enable the to current manufacturing in China. flexibility for people to grow. We The masterplan shows a logistics have that scale to create options to park, manufacturing zone, and a create options for people to grow technology campus.

COVID leading to change in logistics strategy From page 15 the Kotahi logistics joint venture and road to rail, which in turn will drive to major shipping lines. significant sustainability benefits.” The Ruakura partners will look to (KiwiRail estimate that rail is 66% help lower the land-side costs by also more efficient from a carbon improving the utilisation of rail. emissions perspective than road Running alongside Ruakura’s alternatives.) objectives will be long-term decision- This strategy has attracted Port of making on the location of a dominant Tauranga, because it fits well with the port in the upper North Island, the port’s own ambition to become a hub future size of container vessels and the port for large carriers. The rationale role of regional ports. of lowering the land-side costs of Ruakura’s ambition is to be at the moving sea freight is thought to also ‘centre of gravity’ of whatever happens have strong appeal to the partners in from here. 16 The New Zealand Shipping Gazette January 16, 2021