Te Awa Lakes Assessment of Economic Effects Prepared for Perry Group Limited
Total Page:16
File Type:pdf, Size:1020Kb
Te Awa Lakes Assessment of Economic Effects Prepared for Perry Group Limited 12 October 2017 Document Quality Assurance Bibliographic reference for citation: RCG Limited 2017. Te Awa Lakes: Assessment of Economic Effects. Report prepared by RCG Limited for Perry Group Limited. Prepared by: John Polkinghorne Associate Director RCG Limited Status: Final Revision / version: 7 Issue date: 12 October 2017 Use and Reliance Every effort has been made to ensure the soundness and accuracy of the opinions, information, and forecasts expressed in this report. Information, opinions and forecasts contained in this report should be regarded solely as a general guide. While we believe statements in the report are correct, no liability is accepted for any incorrect statement, information or forecast. RCG disclaims any liability that may arise from any person acting on the material within. RCG Limited is the author of this report, and therefore holds all copyright and intellectual property rights relating to it. RCG requires that all parties permitted to use the report and the research contained within the report give full and correct acknowledgement of its authorship. Template revision: 20170704 0000 File ref: Te Awa Lakes 07 07 2017.docx Cover photograph: © Boffa Miskell Limited, 2017 CONTENTS 1.0 Introduction 1 Te Awa Lakes 1 The Purpose of This Report 2 Abbreviations 2 2.0 Nearby Land Uses 3 Overview of Te Rapa North, Horotiu and Surrounding Areas 3 Key Land Uses 3 3.0 Industrial Land Availability 8 Before Future Proof (The Mid-2000s) 8 After Future Proof (2009 Onwards) 9 Industrial Land Uptake 9 The UNISA Program 11 Property Market Research 12 The Current Market (2017) 14 4.0 Industrial Consents Data 15 5.0 Housing Supply and Demand 17 National Population Growth 17 Local Population Growth 18 Declining Household Sizes 19 Stats NZ Projections 19 NIDEA Projections 21 Housing Demand and Supply 21 House Prices and Affordability 22 6.0 Tourism in the Waikato 24 Tourism and the New Zealand Economy 24 Forecasting Tourism Spending 24 The Commercial Accommodation Monitor 25 The Waikato RTO 25 Overall Guest Night Trends 26 Occupancy Rates 27 Regional Tourism Estimates 28 Hamilton Hotel Demand Assessment 30 Hotel Demand in Other Cities 31 Cycle Tourism 32 Summary 32 7.0 Te Awa Lakes Tourism Effects 35 Tourism Benchmarks and Visitor Numbers 35 The Adventure Park at Te Awa Lakes 35 Accommodation at Te Awa Lakes 36 Te Awa Lakes Tourism Effects 36 The Hamilton CBD 37 Summary 38 8.0 Retail Demand 40 Retail Demand from Households 40 Floor Space Demand 41 Retail Demand from Visitors 42 Retail Demand from Other Shoppers 43 Centre Assessment Reports 43 Conclusions 44 9.0 Response to Peer Review 46 Industrial 46 Residential 48 Tourism 49 Retail 51 10.0 Conclusions 52 The Industrial Market 52 The Adventure Park and Accommodation 52 Retail at Te Awa Lakes 53 Housing at Te Awa Lakes 53 Overall Conclusions 54 Figures Figure 1-1: Te Awa Lakes Context. Source: RCG ......................................................... 1 Figure 2-1: Northgate Business Park Concept Plan. Source: www.northgatepark.co.nz/Documents/Northgate-Overall- Concept-Plan-June-2016.pdf ................................................................... 5 Figure 2-2: Adjacent Landuses .................................................................................... 7 Figure 3-1: Hamilton Industrial Land Sales & Prices. Source: CBRE via Strategic Risk Analysis Ltd ..................................................................... 10 Figure 4-1: New Industrial Floor Space Consented (New Zealand-wide). Source: Stats NZ building consent data for new “factories, industrial, and storage buildings” ......................................................... 15 Figure 4-2: New Industrial Floor Space Consented (Waikato Sub-Region). Source: Stats NZ building consent data for new “factories, industrial, and storage buildings” ......................................................... 16 Figure 5-1: NZ Population Growth 1992-2016. Source: RCG, Stats NZ ..................... 17 Figure 5-2: Auckland Population Flows. Source: RCG ............................................... 18 Figure 5-3: Stats NZ Population Estimates and Projections for Hamilton. Source: RCG, Stats NZ ............................................................................ 20 Figure 5-4: Homes Consented in the Future Proof Area. Source: RCG, Stats NZ ...... 22 Figure 6-1: Waikato RTO Accommodation for the Year Ended March 2017. Source: Commercial Accommodation Monitor ..................................... 26 Figure 6-2: Moving Annual Total (MAT) Guest Nights in Hamilton City. Source: Commercial Accommodation Monitor ..................................... 26 Figure 6-3: Domestic and International Guest Nights in the Waikato RTO. Source: Commercial Accommodation Monitor ..................................... 27 Figure 6-4: Domestic Visitor Spending in the Waikato RTO. Source: MBIE, RCG ........................................................................................................ 29 Figure 6-5: International Visitor Spending in the Waikato RTO. Source: MBIE, RCG ........................................................................................................ 29 Figure 6-6: Visitor Spending in the Waikato RTO ($m, Year Ended Mar 2017). Source: MBIE, RCG................................................................................. 30 Figure 8-1: Retail Spending from Te Awa Lakes Households. Source: RCG .............. 40 Figure 8-2: Floor Space Demand from Te Awa Lakes households (in m2). Source: RCG ........................................................................................... 41 Figure 8-3: ‘Small Format’ Floor Space Demand from Te Awa Lakes households (in m2). Source: RCG .......................................................... 41 1.0 Introduction Te Awa Lakes 1.1 Te Awa Lakes is a proposed mixed-use development in Hamilton City, 11 km from central Hamilton travelling along Te Rapa Road. 1.2 Figure 1.1 below shows Te Awa Lakes outlined in red, with the Waikato Expressway along its western boundary. Note that the areas west of the Expressway are in the Waikato District, and are not part of the current plan change: Figure 1-1: Te Awa Lakes Context. Source: RCG 1.3 At present, the 62-hectare plan change area has Te Rapa North Industrial zoning. This zoning allows 7 hectares to be developed for industrial purposes prior to 2021, with another 23 hectares available after 2021. The remaining 30 hectares would not be developable until rezoned. This would only happen when infrastructure was in place, and only if there was no threat of oversupplying land. Industrial demand and supply issues are considered at the city, sub-region and regional level, as outlined later in this report. 1.4 The Te Awa Lakes site has been used for sand quarrying, but these operations are in the process of being disestablished. 1 RCG | Te Awa Lakes | Assessment of Economic Effects | 4 July 2017 1.5 Perry Group, the landowner and developer of Te Awa Lakes, is now working towards a mixed- use development for the site, via a private plan change process. Proposed uses include an “Adventure Park”, along with related tourism and accommodation uses, and residential housing. 1.6 An initial stage of development opened in 2016, and included a retail ‘service centre’ with BP and several retail tenancies, and a community bike park. These uses were approved via an Indicative Development Plan process, which enabled 7.63 hectares of development (only partially completed). The Purpose of This Report 1.7 RCG has been engaged by Perry Group to assess the economic effects of the plan change. 1.8 Our report is necessarily quite wide in scope. We have had to consider the proposed uses for the site (tourism, commercial, and residential), as well as the uses allowed under the existing zoning (industrial, albeit with large-scale development deferred). This wide variety of uses must also be considered within the planning framework, including the Regional Policy Statement, Future Proof and Partly Operative District Plan. 1.9 Other relevant documents include the National Policy Statement on Urban Development Capacity and the Hamilton Housing Accord. 1.10 Our report works through the following steps: • Analysis of various industrial indicators in the Future Proof area to gauge demand and supply; • Analysis of residential demand and supply in the Future Proof area; • Information on the local and national tourism industry, and the potential for tourism- related uses at Te Awa Lakes, and flow-on benefits as a result; • Retail demand modelling and comments on Centres Assessment Report matters; • Conclusions on the overall economic effects of the proposed plan change. Abbreviations 1.11 Our report uses the following abbreviations: • GDP – Gross Domestic Product • LFR – Large Format Retail • NIDEA – National Institute of Demographic and Economic Analysis • RTO – Regional Tourism Organisation • Stats NZ – Statistics New Zealand • SRA – Strategic Risk Analysis Ltd • UNISA – Upper North Island Strategic Alliance 2 RCG | Te Awa Lakes | Assessment of Economic Effects | 4 July 2017 2.0 Nearby Land Uses 2.1 Te Rapa North was transferred from the Waikato District to Hamilton City in 2011. It is defined as the area “bounded by Horotiu in the north, the Waikato River to the east, the… [Waikato Expressway] in the west, and Ruffell Road to the south”.1 The same definition is used in the Waikato Regional Policy Statement. 2.2 Horotiu is part of the Waikato District, and consists