The National Business Review / May 29, 2015 23

Special Report

Businesses are noticing the attractiveness of being based Tauranga in regional cities. Tauranga exemplifies a dynamic trend A BUSINESS SHOWCASE throughout regional New Zealand.

The city’s position in the ‘Golden Triangle’ augurs favourably for further growth

Jamie Ball service sector. “There is quite a significant num- director of the Institute for Business Research at ber of baby boomers in both industries, who the University of Waikato, he has seen the broad- Much as New Zealand’s economic fulcrum tilted invested in them quite some time ago. The own- er region transform since joining the university over a century ago away from the South Island, ership of those industries is now aging and they in 1989. Tauranga’s rise in recent decades is part of a exit out of those industries with plenty of money. “In economic literature, there is the idea comparable move. That’s one of the important elements in terms of of the gravity trade model: you trade the most It is an incremental concentration of growth, Tauranga’s growth: the dairy or kiwifruit farmer with the people who are closest to you, and the spending, human resources, migration and retiring to live in Mount Maunganui, albeit a bit least with who are furthest away. So it’s easy employment flowering in the upper half of the of a cliché,” Prof Spoonley says. for a firm in Auckland to do business in Ham- North Island. Such is the frequency of those baby boomers ilton, compared to doing business with a firm Whereas the traditional quartet of Kiwi in Tauranga that it presents obstacles in attract- in Palmerston North, for example, or with the cities comprised the Auckland/Wellington/ ing and retaining youth – and youthful talent South Island,” Prof Scrimgeour says. Christchurch/Dunedin axis, in the last quarter with it – in the city. “There are some complementarities between century that linear arc has been blown askew. “If you look at the labour market you will see the regions. Auckland’s growth has had spill- According to June 2014 estimates, Dunedin it requires highly skilled people. You need uni- over on its hinterland but, likewise, the good (116,000 urban population) – this country’s versities to do that and Tauranga doesn’t have [dairy] prices of more recent times has also had a largest “city” 150 years ago – now has fewer one. Like a lot of regional towns, it is going to [reverse] spill-over effect.” people than Tauranga (127,000) and Hamilton lose people in their late teens and twenties. The Migration increasingly centred upon the (184,000). Put another way, three of this coun- challenge is to attract them back once they have upper North Island is another factor. The centu- try’s five largest cities are concentrated in the ries-old pattern of migration obviously endures upper North Island. “I think Auckland, Hamilton While many in New Zealand in the 21st century: migrants and Tauranga represent the ‘Golden Triangle’,” travel to where previous migrants settled. This Massey University College of Humanities & regional raises the equally old question: is economic Social Sciences professor Paul Spoonley says. centres were activity driving population growth or is popula- “The expectation in the next decade is that tion growth driving economic activity? Auckland will be home to perhaps 40% of New stagnating or in Answering this, Prof Scrimgeour says cau- Zealand’s population but, when you add Hamil- decline, Tauranga’s sality can be argued to flow both ways. As for ton and Tauranga, you are effectively approach- challenges to the growth of the triangle, priority ing half of New Zealand’s population, in terms of population grew an needs to be given to the travel time between growth over the next decade.” Auckland and Tauranga: over two and a half While many regional centres were stagnating average of 12.5% hours by car – or more than three if you have not or in decline, between 2001 and 2013 Tauranga’s done their university study and their OE,” Prof appeased the traffic gods – for what is a 153km population grew an average of 12.5%, according Spoonley says. Luckily, Tauranga is about to get a direct (“as the crow flies”) distance. to Statistics NZ. branch of University of Waikato. The Auckland-Hamilton highway, even its TAURANGA “It is a very attractive alternative to Auckland “The second dimension is that Tauranga has severest critics will argue, is improving, although BOOMING: – that combination of Hamilton and Tauranga quite a thin labour market, so you don’t have a Auckland-related traffic too often puts the kibosh Professor Paul being an important economic regional hub,” large number of firms who employ more than on it. Then there is the Hamilton-Tauranga route, Spoonley (above) says Prof Spoonley, adding that both cities ben- 100 people. You are always going to lose some with the rail tunnel and road through the Kaimai sees the city as efit from the spill-over effects from Auckland’s skilful people, as they need to go to a large met- Ranges connecting the two cities. an important economic regional growth. ropolitan economy to get the jobs they are after. “It’s worth questioning whether the capac- hub and Professor To the professor, the kiwifruit industry in The alternative is that it does have quite a grow- ity there is adequate going forward. It seems to Frank Scrimgeour the Bay of Plenty, much as the dairy industry in ing, diverse economy.” me it’s a crucial link and we need to be satis- (below) has Waikato, “provides a rural hinterland with a lot The “gravity model” is what Frank Scrimgeour fied that there is sufficient capacity there,” Prof seen the region of discretionary capital. They contribute to a lot foremost applies to the Auckland-Hamilton-Tau- Scrimgeour says. transform of dollars being spread through the retail and ranga triangle. As a professor of economics and [email protected] 24 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE May 29, 2015 / The National Business Review The National Business Review / May 29, 2015 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE 25

Regional economic activity % Sally Lindsay about $1.3 billion a year. Annual retail expenditure capacity of One of the biggest contributors to Tauranga’s the main trade area is calculated to grow to breaking Northland 3.4 Tauranga – economic growth is retail services at 6.3% of $2.1 billion by 2026, while retail expenditure Retail science capacity of the total trade area is estimated to Auckland 4.3 GDP. The rising figures reflect high business grow from about $2.8 billion to $4.6 billion in the ‘zombie town’ mould Bay of Plenty 4.8 confidence, a buoyant economy and retailers the same period. skilled at adapting to sector changes. a big part of huge new development Mr Hira says while commentators argue Waikato 3.3 Game- changing challenges are being projects, such as Tauranga Crossing are detri- faced by the city’s retailers. Growth in technol- mental to the CBD, he does not believe this is Gisborne 3.5 Jason Walls ogy and online retailing is changing retail’s the case. “There is a lot of retail leakage from Taranaki 1.2 structure and the number, shape and size of Tauranga. The outlook for some towns in New Zealand’s physical stores. “By providing the only retail centre in the regions has been described by many as bleak. Hawke's Bay 2.4 These transformations are leading the region capturing bulk retail, a mall, good New Zealand Institute of Economic Research more adept retailers to mine data on every- cafes, restaurants and bars plus general mer- principal economist Shamubeel Eaqub is one of Manawatu-Whanganui 2.9 thing from customers’ spending patterns, chandisers and major anchor tenants on the New Zealand’s most respected experts when it product selection and floor configurations for one site, we are endeavouring to keep that Wellington 2 comes to the dangers of poor economic regional a better return on assets. money in Tauranga and provide a retail hub.” development – in fact he literally wrote the book on West Coast 1.3 Changes in design are showing up in the He says any city’s planning needs to allow it. development of malls, suburban and large for market realities and a variety of places Mr Eaqub made headlines last year after he Nelson-Marlborough 2.1 format centres rising in the city. developers, investors and consumers favour expressed concerns about some New Zealand rural The new retail development is being for retail and leisure. “It is out of a culture of 4.4 towns. Canterbury fuelled by insatiable demand for housing and change and diversity a CBD will grow, not as The report was damning, outlining that some Otago 3.3 investors willing to take risks in their search a result of imposed views of what should go regions in New Zealand are caught in a downward for above trend value growth. where.” spiral of declining and ageing populations with little Southland 4 On the outskirts of the city, paddocks once Mr Hira says on a broader level retail to no economic growth, high unemployment and NOT A ZOMBIE TOWN: New Zealand Institute of Economic used for farming are being gobbled up every developments need to keep growing and few opportunities for residents. Research principal economist Shamubeel Eaqub says Tauranga year for new homes. Savvy investors studied changing to remain current, which is the His report was called Regional economies: Shape, is far from being a ‘zombie town’ Average annual change, March 2015 the city and regional councils’ growth plans enduring challenge for retailers and retail Source – ANZ Regional Trends (a baker’s dozen) performance and drivers, and before long Mr Eaqub years ago and bought up swathes of land for RETAIL PLANS: An artist’s impression of Tauranga Crossing, BOP’s second regional shopping centre property investors and developers. received the nickname which made him famous – rezoning into shopping centres and commer- He says the owners are focused on the the ‘zombie town’ guy. BERL chief economist Dr Ganesh Nana says one cial business estates. need for the project to reflect the communi- But, despite a string of bad news from many of the main reasons the Bay of Plenty is perform- With the global financial crisis fading, ties that surround it. “The nature of what of New Zealand’s rural towns , such as low eco- ing so well is because the region is being driven by development in Tauranga has exploded in retail developers do is about managing nomic growth and dwindling levels of employment, Tauranga. Employment growth % the past couple of years, particularly west and change and perceptions. They are aware Tauranga looks to be economically charging ahead. The latest Westpac McDermott Miller consumer east of the city. the role of regional centres is changing as Mr Eaqub says he is optimistic about Tauranga confidence survey suggests consumers in the Bay Retailers operating in growth catchments customers demand not only contemporary and sees growth and development in its future. of Plenty are some of the most optimistic in New Bay of Plenty 13 in either established or emerging areas have retailing but also stimulating places to be He says Tauranga has a vibrant economy and is Zealand. increasing turnovers and crucial to their prof- entertained and relax. a pivotal part of what is called the ‘golden triangle’ – The region has the highest net percentage of Northland 11 itable retail trading have been an increasing “In good retailing the tenant mix is para- Hamilton, Tauranga and Auckland – that is helping consumers who think they are better off financially population, employment, wage growth and mount and it will be heightened at Tauranga 9 to drive New Zealand’s overall growth. year-on-year. Waikato rising house prices. Crossing. Retailing is dynamic. Investors Although it has colloquially become known as The data shows 32% of consumers say the reason Otago 5 Around New Zealand shopping centres might build something today that doesn’t the retirement capital of New Zealand, Tauranga for this improvement is down to an improvement in produce a combined turnover of more than work in 20 years’ time as spending power and has attracted many young people and families, Mr their financial commitments, followed by 20% who Canterbury 5 $5 billion a year, or 10% of the country’s core populations change.” Eaqub says. cite a salary or wage rise. retail sales. Successful investors build long-term flex- This is a key reason for growth in the Bay of The Main Report – published every quarter by New Zealand 4 They come in a range of shapes and sizes. CITY PLANNING: Needs to allow for market realities and a variety of places for retail and leisure to be developed ibility into their developments, and especially Plenty region, particularly Tauranga and why Mr the Main Report Group, examining regional econo- At one end of the spectrum, there are neigh- malls. “There will be things they don’t know 3 Eaqub expresses such optimism about the provin- mies across New Zealand – gave the Bay of Plenty Auckland bour centres made up of a supermarket and a ing and REanother 600 car parks, taking the ning has been carried out by the project team, about today but will be the trend in 15 years cial centre. four out of five stars for the December 2014 quarter. Southland 3 handful of shops and at the other end region- combined Tauranga Crossing development including Ash Hira from Ray White Commer- and they must have the ability to change And he’s not the only economist forecasting It says employment has lifted strongly, while al centres that have multiple anchor tenants, to more than 66,700sq m of retail space. This cial for the adjacent bulk retail centre and the spaces to meet the market.” a positive outlook for the city. ASB Bank senior retail sales and the level of business activity remains Wellington 2 department stores, 100 plus specialty stores, compares with the 35,000sq m Bayfair Shop- shopping centre’s second stage of an enclosed He says major landlords and professional economist Chris Tennent-Brown says comparing high. cinemas plus fitness and health facilities. ping Centre, with annual turnover of about mall. mall owners recognise this. Big brand ‘fast Tauranga with the rest of New Zealand, the city The latest forecasts from Statistics NZ show the Taranaki 1 At Tauriko, the city’s western growth cor- $200 million. The next biggest is Fraser Cove, Mr Hira says the market and tenants have fashion’ retailers, such as Top Shop, Zara stacks up well. Bay of Plenty has the highest levels of employment ridor, Tauranga Crossing will become one of at 31,000sq m of retail space. changed since the global financial crisis. and Uniqlo, have arrived in Australia. That Manawatu-Wanganui -1 growth in New Zealand – outstripping even the only two regional shopping centres in the Bay Tauranga Crossing directors Richard Tauranga Crossing will service the adja- wouldn’t have been envisaged a decade ago. Tauranga driving growth in the Bay seemingly unstoppable economic engine of Can- Hawke's Bay -3 of Plenty. There are 16 major shopping cen- Stilwell, Mark Taylor and NBR Rich Lister cent The Lakes residential subdivision and “Major shopping malls have had to come He says the retail sector is stronger than many other terbury. tres in and around Tauranga. Adrian Burr have the centre’s first stage of other large residential areas as well as the up with solutions to cater for them. If they regions and the housing market is trucking along The figures show annual employment growth Nelson -6 The $200 million plus Tauranga Crossing 17,800sq m under way. It will open next year, adjoining Tauriko Business Estate. Mr Hira come to New Zealand, they are not here for a reasonably well. “I think the Bay of Plenty looks in the Bay is 13%. This is the highest in the ‘golden will progressively add more than 44,000sq anchored by four major retailers accounting says there are no major services in the local single shop. pretty good – better than a lot of the other regions.” triangle’ region, topping Waikato at 9% and far off m of retail floor space and 2500 car parks. for nearly 70% of the available space. Smaller catchment. In cold, hard numbers Tauranga “We have spent a lot of time designing this Also, he says the Bay of Plenty is ahead of the Auckland’s 3% (see graph 1). Annual % change to December 2014 Next to the centre, the same investors are shops have been leased to food outlets, banks, Crossing says its total trade catchment is development so it can quickly adapt to retail Source – Statistics NZ curve in construction, and consumer confidence is working on a bulk retail centre, providing and general merchandisers. estimated at 257,000 people, with 116,000 trends.” booming. Continued P26 a further 22,700sq m of large format retail- Over the past four months master plan- people in the main trade area spending [email protected]

26 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE May 29, 2015 / The National Business Review The National Business Review / May 29, 2015 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE 27

the future of Tauranga business, and says straightening tools damaged women’s hair, Making a bigger pie, He says the growth there is “tremendous opportunity” for so designed a device which uses ice-cold Businesses from ‘across the board’ rather than eating it Tauranga experiences is Enterprise Angels start-ups to concentrate on the skills New temperatures instead. Mr Poole says it is getting “exponential and huge” com- Zealand is known for – such as applying The latest Young Company Finance enquiries from businesses pared to Wellington, where technology and innovation to agriculture Index, compiled by the New Zealand “across the board” about the amount of time he spent and animal productivity. Venture Investment Fund, shows angel coming to Tauranga coming to Tauranga. managing growth-related Calida Smylie Enterprise Angels invested $4.8 million, Enterprise Angels has recently helped networks and funds invested $55.9 million But he says there is an issues was relatively minor. with an average initial investment of fund a number of Tauranga-based start- across 118 deals in 2014, with $26.2 obvious horticultural bias to “This is growth that’s Every young company needs significant $500,000-$700,000. ups, including automatic boat loader million going toward software companies. many, because of the local happening every day, con- lumps of start-up capital from informed It is projecting investments of $6-7 Balex Marine, avocado processing plant Angel investors have a portfolio kiwifruit industry, although stantly,” Mr Poole says. and trusting investors, so it is fortuitous million this year, and expects 20-40% of Vocado, and online accounting service theory of early stage investment that Hamish McNicol says, including what needs this has sprouted new enter- “In the short to medium New Zealand’s biggest angel investment that will be in Tauranga. Beany.biz. while most start-ups will fail, one in ten there were for staff, educa- prise as well. term I think we’re incredibly group is based in Tauranga. Enterprise Angels chief executive Bill It has also plugged capital into Roholm, is a star, generating 30-times the original Less than two years ago, tion, employment, and living This includes robot- positive.” Enterprise Angels began in 2008 and Murphy says historically there were not founded by a hairdresser with two investment. major international technol- opportunities. ics, automation, titanium “We very much see our- built its member size rapidly to 160 many Tauranga start-ups to invest in – but decades experience who noticed how hot [email protected] ogy company Brother Inter- “We put quite an effort products, 3D printing, and selves as being part of New investors – including 40 from Waikato – this is changing, and he believes the angel national announced it was into making sure that, when “high-spec manufacturing,” Zealand Inc and so I think which makes it twice as big as any other group’s deep pockets has played a part. shifting its head office from companies come, we provide he says. all of us, everybody, should angel investor group in New Zealand. “Traditionally, we weren’t getting any Traditionally, we weren’t getting any Wellington. assistance to the people that “We’re moving to operate be looking to Auckland and The group assesses investment Tauranga opportunities at all but, in the The company said it want to come with the com- in that creative innovation hoping that they are able to opportunities from around New Zealand past three years, it has really picked up. We Tauranga opportunities at all but, would spend $10 million on panies,” Mr Poole says. space focused on special- succeed.” and, since launching, has invested $13 have lots of investors and when you create a new, purpose-built, 7930sq “I’m not aware of ist manufacturing which is He says Auckland has to million, with about 40% snapped up by a large funding pool and get the message in the past three years, it has really m headquarters, with up to how many other designed to increase produc- succeed for the benefit of the Bay of Plenty businesses. out there, it starts to gain momentum.” picked up Bill Murphy 40 of its staff relocating as HQ MOVES: Huge growth is being seen in Tauranga tivity.” country. In the year to March 31, 2015, Mr Murphy sees great potential for well. GARRY POOLE: A number of leading edge But while it goes through It was announced as an Brother, perhaps surprisingly, nies coming to Tauranga City companies are based at the some issues, such as rap- “exciting new direction” for chose Tauranga. Tauranga. Council chief Newnham Innovation Park idly increasing house prices, the company, as it looked to Mr Walshe said the move The council executive in Te Puna, which opened in Tauranga is picking up some Tauranga – breaking enhance its warehousing, to Tauranga was a “strategic is a substantial late 2010. of the movement from the market responsiveness and decision.” funder of Priority economic Co-founder Steve Saun- country’s biggest city. customer service capabilities. The head office will be One, the city’s eco- development ders wanted to create a clus- This, as well as generating the ‘zombie town’ Executive chairman Gra- there while local sales teams nomic development agencies actual- ter of companies that could its own demand in other sec- ham Walshe said at the time would remain in Wellington, agency, which looks ly go to that length add value to horticultural tors, Mr Poole says. mould the decision to leave Welling- Auckland and Christchurch. after its business attraction to make sure that incoming and food processing prod- “We are managing all that ton was difficult. “Placing ourselves closer function. businesses are welcomed, ucts. from Auckland, and trying From P24 “Wellington has been a to main markets means we Chief executive Andrew and that the city, not just the Mr Poole was Wellington to generate new business so wonderful home for Brother. can have a more focused Coker says the organisation city council, the city in its City Council’s chief executive we grow the whole pie, not And as if this wasn’t enough data to prove the Bay of “We have enjoyed the delivery structure,” Mr has helped 25 businesses wider sense, does its best to for 15 years before joining divide up the pie in a differ- Plenty is quickly becoming an economic powerhouse support of many service Walshe said. relocate to Tauranga, and make people feel welcomed Tauranga City Council in ent way.” in New Zealand, the latest ANZ Regional Trend Forecast providers here, and hope to And Tauranga City Coun- it is currently working with and valued.” April, 2013. [email protected] shows the region has the highest annual average regional continue these valued rela- cil chief executive Garry another 25. economic activity in the country. tionships from our new site.” Poole, who also left Welling- Priority One staff met At almost 5%, it is head and shoulders above other But unlike many other ton for Tauranga not long Brother staff in Wellington regions, such as the West Coast at 1.3%, Gisborne at 2.5% head office shifts which before Brother, says this is and worked through the and Otago at 3.3% (see graph 2). found their way to Auckland, just one example of compa- transfer in detail, Mr Poole The report credits the Bay of Plenty’s first-quarter growth to the strong housing sector, which benefited from increased employment and confidence. “Consumer confidence has rallied. Bay of Plenty house- holds have now overtaken Wellingtonians as the most optimistic in the country. Retail activity lifted 0.9% in the Chief Executive Officer March quarter, and is up 2.1% on a year ago.”

More economic prosperity coming Mr Eaqub says there is a lot to look forward to with the • Visionary Leadership growth of Tauranga. Its close proximity to Auckland and • Diverse National Rural Services the way it services the rural economy through its port and logistics-related industries are key areas that will help With annual turnover in excess of $2.4 billion and over 1,200 staff, Farmlands is New Zealand’s Tauranga expand in the future. Martin Jenkins regional economic growth expert Jason largest farm input business and a major contributor to the wealth of the primary sector economy. Leung-Wai, agrees with Mr Eaqub and notes Tauranga is With a vision of being the trusted team of choice across New Zealand’s rural sector, the enhancement the main economic hub in the Bay of Plenty area, provid- of farmer prosperity and profitability is at the heart of Farmlands business. Farmlands offers a ing services that some of the smaller towns in the area diverse range of rurally-focussed services and solutions, including livestock, finance, nutrition, fuel, aren’t able to. lubricants, grain and seed, real estate and card divisions, which are complemented by 81 retail Although the recovery in the kiwi fruit sector in the past stores across New Zealand. few years has been positive for the region, Mr Leung-Wai The Board are seeking a new Chief Executive Officer who will be accountable for the performance says much of the growth has come from a migration-driven of Farmlands and the delivery of the long-term strategy. The Board’s vision for shareholder value increase in the area. He says there is a skills shortage in creation, innovation and ongoing transformational change in Farmlands business model are key Tauranga, which is consistent with the story nationwide. elements of the role. Developing and executing operational strategies to enhance effectiveness However, the political headwinds of late have shifted and efficiencies across all elements of the supply chain, building upon Farmlands extensive and a new policy could lead to more economic growth for customer relationships, and driving innovation across the sector to ensure that Farmlands Tauranga. continues to deliver value will be key to the success of the role. Earlier this month, Labour’s finance spokesman Grant Robertson outlined his plan to help alleviate Auckland’s Applicants will display the following attributes: housing problems, and encourage growth in some of the • Strategic leadership skills with a reputation for innovation and delivery. regions with one wave of the political wand. • Senior executive experience in a similarly diverse and complex business. His plan is to apply a weighted points system for • Reputation for leading transformational change and shaping a high-performance culture. skilled migrants who are prepared to live in New Zealand’s • Excellent relationship management and communication skills. regions. He told NBR ONLINE last week if the central • An appreciation for co-operative ownership and the rural sector. government, regional government and businesses work • Experienced in value chain enhancement. together on this, many regions can look forward to higher This Christchurch based role will be attractive to those who have the vision and aspiration to lead levels of economic growth. one of New Zealand’s larger companies on the next phase of its development. Immigration minister Michael Woodhouse later threw his support behind this idea and told media that it could For further information about Farmlands Co-operative Society Limited please visit happen in the next few months. www.farmlands.co.nz Dr Nana says this plan has the potential to benefit Tauranga, if the job opportunities are there. Confidential enquiries can be made to Graham Ewing or Kerrie McGirr. If the data from Statistics NZ are anything to go by, Applications for this role close on Friday, 26 June 2015. All applications will Tauranga looks to be in a good position to become an eco- be acknowledged by email. nomic mainstay in not just the North Island but also the Email: [email protected] Website: www.eqiglobal.com entire country. PO Box 13-419 Christchurch New Zealand Phone +64 3 377 7793 [email protected] 28 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE May 29, 2015 / The National Business Review The National Business Review / May 29, 2015 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE 29

between 6000 and 8000 new houses. without infrastructure, land cannot be business we found numerous builders fol- This will give the city enough land sup- developed. lowing us to various subdivisions relying on Greenfield builds fuel ply for another five years and meet its goal The city says there are few large develop- our terms, which help them free up their of always having 10 years of greenfields ers that can afford ,and have balance sheet cashflow for building. land available for housing. capacity, to step in and build infrastructure “If we give builders the opportunity to Unlike Auckland, intensification is not in place of a council. Water, wastewater buy on terms, it gives them time to obtain Tauranga’s housing appetite an option for Tauranga, the council says. and roads are expensive lead infrastructure a building consent and finish the house The development economics are poor required before development revenues within a year. They can settle on the day the and new housing in greenfields areas is begin to accrue. client moves in and it takes away the issue more affordable. Much of this has to do In an ideal world councils would like to of borrowing to fund the entire house and with the high cost of aggregating enough offload the cost to developers and in one land package.” Sally Lindsay land to redevelop in the older parts of the Tauranga housing project this has been The Lakes is one of several big new city as well as the additional building costs done. subdivisions in Tauranga. Coast Papamoa Tauranga’s housing is being squeezed by and project risks associated with building Developers took the plunge and paid for Beach has sold more new homes in five the city’s fast growing population and its apartments and terraced houses rather infrastructure at the 254ha The Lakes sub- months than the previous five years at its small district by land area, even though it is than single-level homes. division on the western outskirts of the city. 24ha development. the country’s fifth largest urban area. The council says it is far too simplistic The new suburb will include 2081 sec- APPEALING: The Lakes and Coast Papamoa Beach Frasers Property has sold 23 lots since Population growth is one of the fastest to just talk about increasing land supply. It tions housing more than 7000 people as subdivisions are booming as people stream into January. At the end of last year it had sold in the country as people stream into the says this will not achieve housing afforda- well as a 2500sq m commercial hub with a Tauranga chasing its relaxed lifestyle just 18 sections, since opening at the begin- region for a lifestyle hard to match else- bility unless the land can actually be devel- café/restaurant, convenience shops and, ning of 2010. Land sales to date total $13.9 where in New Zealand. oped, smaller more affordable houses are possibly, offices. The subdivision includes just also coming out of the global financial million. In 1945 Tauranga was a fishing village allowed to be built in new subdivisions and an 8ha fresh water lake, 20km of walkways crisis (GFC) and the city’s housing market Coast Papamoa Beach director Steve of 4000 people. The number of people call- they are actually delivered. and cycleways, professional orienteering was static.” Short says this time last year the average ing the city home grew from 66,731 in 1991 Infrastructure financing courses, playgrounds, parks and reserves. To stimulate the market Carrus intro- time for designing a house and land pack- to 121,700 late last year and is expected to and funding is also a The Lakes managing director Scott duced 12-month interest-free terms to age was 90-120 days. Now they are selling mushroom to nearly 200,000 by 2063. major issue in terms Adams says building infrastructure in lieu house builders and sales immediately within 30 days. Accommodating the burgeoning popu- of land release. of development contributions is an alter- picked up. On purchase and payment Although the market has mainly been lation needs the rezoning of swathes of While the govern- native mechanism to free up more land of a deposit, clients can opt to take the local buyers for The Lakes until recently, greenfields land for housing development ment could leg- for development without local authority 12-month interest-free terms or a $5000 Aucklanders are now targeting Tauranga and millions of dollars spent on infrastruc- islate to remove delays. discount for a cash sale. Carrus had for affordable housing and Frasers Property ture. MORE AFFORDABLE: New housing in Tauranga’s greenfield areas is more affordable than urban limits and Carrus Corporation took over The Lakes budgeted to sell 50 lots a year over three says its sales are dominated by buyers from Like Auckland Council, Tauranga City in intensified areas in the city compel coun- after the global financial crisis-hit Bank of years but in three months it sold 150 lots the country’s biggest city. “They are drawn Council has a number of housing accords cils to rezone Scotland International called in its loan to with 80% on deferred terms and 20% cash here because the city can offer luxury living and special housing areas with the govern- However, the council says it needs to District Council, Bay of additional land the original developer, Grasshopper Farms, sales. by the sea at about two-thirds of Auckland ment. These have been beneficial based look ahead because of the four to 10 years Plenty Regional Council for residential and the company went into receivership Mr Adams says deferred terms have prices,” Mr Short says. on the council’s predictions the city has it takes to rezone land under the Resource and tangata whenua, a development, this and liquidation. “Before Carrus took over, the receiv- thrust The Lakes out of the GFC. “Many A lack of available properties on the between 10 and 11 years of zoned green- Management Act. start has been made on will have no effect “When we took control of the assets, 500 ers were restrictive and refused to provide land developers use terms to help buyers’ market is also fuelling the popularity of fields land supply, most of it serviced and Under the SmartGrowth partnership rezoning two new greenfields on the amount of sections had been developed and another 140 terms for house builders wanting to buy cashflow and we have provided this in all new builds. ready for development. between the council, Western Bay of Plenty areas for development to provide land available because, lots had titles but not sold,” Mr Adams says. sections, which had halted sales. We were our developments. After 25 years in this [email protected] 30 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE May 29, 2015 / The National Business Review The National Business Review / May 29, 2015 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE 31

ANZ Bank’s recent regional trends report ping centre. It couldn’t be more different than up and 15 buildings are under construction at In any development, land prices are Tauranga plays its part in shows the Bay of Plenty’s economy has grown the traditional estates. the estate. always the biggest consideration. High prices the most in the year to March, expanding Tauriko has 350ha, with 200ha of develop- Across Tauranga commercial building in Auckland are hampering industrial growth 4/8% from a year earlier. able land and includes considerable open consents reached nearly $14 million in April, as it is difficult to make the economics of Significant demand in the past two years space and green areas. Almost one third of a $1.1 million increase on the same time development stack up. for new premises is feeding industrial land the land has been developed and there are 20 last year. Three of the six major consents Prices at Tauriko are half those in Auck- expansion for factories, distribution centres, years of supply left. approved were for buildings at the business land and also less than Mount Maunganui, industrial boom warehousing and yards. Although there is little information on estate. The biggest consent at Tauriko is for the city’s most popular industrial area, where A survey two years ago shows the city has the design qualities of industrial estates, Ele- a Farmlands $1.4 million warehouse with a available vacant industrial zoned land has nearly 900 hectares of industrial land across ment IMF decided early on to make Tauriko Low interest rates are a catalyst for new industrial builds shop and offices. nearly run out. Sally Lindsay TAURIKO BUSINESS ESTATE: One of nine estates of which 482 hectares is occu- as attractive as possible, believing the older as owners realise they can own instead of renting Tauriko is being aimed at distribution As well as selling land, Element IMF also a new breed, next to a major shopping pied. The port zone has 194 hectares. industrial estates were haphazard, ad hoc and companies and Ms Emerson says low interest develops properties for clients. Japan-based It has often been said the health of the indus- centre and big new housing subdivision Most of Tauranga’s available industrial a lack of proper planning was obvious. Element IMF commercial manager Rachel rates are a catalyst as company owners realise Brother International, a global electronics trial sector is a reflection of how healthy New land is at Tauriko, Te Maunga and Wairakei Aesthetics were not exactly high on the Emerson says masterplans for new estates they can build premises specifically suited to company contracted the company to develop Zealand’s economy is. industrial estates. priority list on older estates where accessibil- should provide consideration for aesthetics their business and don’t have to be tenants and build its new headquarters. The fortunes of the industrial sector point Traditionally, industrial parks have been ity, infrastructure and maintenance of roads as well as industrial operations to give a more any longer. The company moved its head office from to positive growth over the next few years, located on the edges of, or outside the main took centre stage. balanced approach, which also promotes Some of the companies at the business Wellington to Tauriko to save $5 million a year keeping the economy healthy. residential area of a city, with good transpor- Goodman’s award-winning Highbrook environmental sustainability, as well as estate cautiously bought land and built dur- through lower real estate costs and improved About one third of the country’s employ- tation access, including a port, road and rail. business park in Auckland’s East Tamaki has matching development plans with economic ing the global financial crisis. distribution efficiencies. ment and GDP is tied to the industrial sector Their focus was on attracting new busi- been the benchmark for Tauriko in terms of expansion. They are now finding their business has Ms Emerson says the big drawcard was the and nearly 50% of the country’s exports come ness by providing integrated infrastructure style and aesthetics. More than 40 hectares of The company expects to sell about seven exploded because of a booming economy nearby port and most of the company’s cus- from the manufacturing slice of the sector. try last year. forming provincial industrial markets dedi- in one location away from urban areas to landscaped parklands are part of the 107ha hectares a year, with sites from one to eight and they need more land for expansion. tomers on its doorstep in the golden triangle The strength of the industrial sector is well Industrial business growth around the cated to a substantial manufacturing sector. reduce the environmental and social impact Highbrook. hectares. At any one time 10ha is available for Owners are either buying land next door, if it of Tauranga, Hamilton and Auckland. known. country is spurring development but it is The city has superior underlying fun- of industrial uses. Although it is hard to envisage a finished sale. The rest of the originally rural zoned land is available, or selling and buying a bigger site When it was completed, Element IMF sold It is supported by high demand for new being stymied by land supply, which in some damentals supporting its industrial sector, Tauranga’s newest industrial precinct, Tau- Tauriko because so much of the land is still in is left vacant until it is needed. within the business estate. the property to a New Plymouth investor at and existing premises, rising rents and inves- areas remains critically short. including high population, port and roading riko Business Estate, owned and managed by its raw state, Element IMF has made a start on After a difficult time getting traction in the It is not just the layout attracting busi- a 6.34% yield on a net rent roll of $650,000 a tors chasing yields. Almost $2.2 billion of Tauranga is playing a significant part in the growth and more manufacturing employees by Element IMF is adjacent to a major hous- lush planting, running tracks and a sculpture business estate during the global financial cri- nesses to Tauriko, the land price is down $50 a year. industrial property was sold around the coun- fortunes of the sector. It is one of the best per- than anywhere else in the country. ing estate and next door to a regional shop- trail. sis, it is now in a boom. Building consents are square metre on pre-GFC prices. [email protected]

NEW ZEALAND’S ND THEMOST DESIRABLE 2FASTEST GROWING 9.9 CITY KM TO LOCATION FOR YOUR Tauranga The new electronic toll road runs between the NZ’S LARGEST AND Domain Road interchange, near Papamoa, and the MOST EFFICIENT PORT* BUSINESSISHERE. Eastern Link Paengaroa roundabout, and links to State Highway 2 WAREHOUSE RENT’S Located less than 10km’sfrom the country’s busiest port, Tauriko Business CHEAPER to Whakatane and State Highway 33 to Rotorua. 25 % THAN Toll Road Estate is recognised as the preferred business location! DIRECT AUCKLAND The benefits of the Tauranga Eastern Link Toll Road are With warehouse rents 25% cheaper than Auckland and direct access to ACCESS TO improved safety, travel time savings, more efficient freight main arterial routes, nottomention less congestion, you can get your MAIN ARTERIAL ROUTES Opening movements, and economic benefits to the local community. products to market faster and cheaper.Add to thatour extremely flexible industrial land andbuilding options and aclimate and lifestyle August The time savings is expected to be around 12 minutes in that’s the envy of many. 2015 one direction. The alternative route is the Te Puke Highway. *The Port of Tauranga is NZ’s largest Port by volume and moves more containers Envy no longer –realise your full potential here... per hour than any other NZ or Australian Port! Source –PortofTauranga To find out more about the project and tolling go to www.nzta.govt.nz/tel or www.tollroad.govt.nz Forall enquiries contact: Rachel Emerson |CommercialManager P 07 571 4120 | M 021 502 877 | E [email protected] www.taurikobusinessestate.co.nz Tauranga Eastern Link 32 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE May 29, 2015 / The National Business Review The National Business Review / May 29, 2015 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE 33 Is the grey brigade keeping economic colour from the bay?

The nationwide image of the Bay of MICHAEL FRANKS: Seeka is making good production levels. Ironically, Psa and added them to their portfolio of Plenty and particularly Tauranga, as a lot of investment into infrastructure, has demanded more management input orchards. They have paid good money for the sunniest retirement village in new varieties and markets What makes the Bay from growers, which has resulted in the the orchards and clearly have confidence the country may keep local garden increased volumes of fruit being pro- in the future of the industry. If the orchards centres and Lions clubs afloat farmers investing at present, which duced,” Mr Middleton says. are managed well, then good investment but what effect is it having on the will be of concern to the industry in The post-harvest industry injects returns are possible, probably in the 10% wider regional economy? the years to come. No doubt there will further capital and employment to the plus category on net returns,” Mr Middle- Seeka’s Michael Franks, for one, be some succession within families but of Plenty so plentiful? region, however seasonal it may be. It, too, ton says. recognises it as a problem for the from what I observe, not a lot. has seen a lot of change in recent years, One man at the heart of horticultural horticultural industry. He believes access “I would have to say that unless youth Jamie Ball “The industry was on its knees in December 2010 between mergers and takeovers. industry in the bay is Michael Franks, to workers will be an increasing problem for are interested in the many outdoor activities that [due to the vine-killing Psa disease], wondering what “In my view, there will be more merg- chief executive of kiwifruit orchard- the industry, as labour is predominantly seasonal are available in the area and the generally relaxed The volcanic, fertile, frost-free soils of the Bay of its future was going to be. Some orchardists didn’t ing of facilities over time particu- ing and post-harvest company and reliant on access to overseas workers. Yet the lifestyle it offers – and if they are prepared to accept Plenty bask in some of the longest sunshine hours in make it through to the recovery phase and some larly if fruit volumes continue Seeka. He says that as a result square that must be circled is that supply of labour a relatively low wage by comparison to what can be the country. could not see that a recovery would be possible. Other to increase and demands are of increased returns and will be critical to the increased volumes of fruit the earned in the larger cities – then they will move out While dairying eats its way inland - and the greater existing orchardists took the risk and purchased more made for improved technol- the upsurge of confidence industry so desires. of the district. the threat of frost becomes - kiwifruit is the domain of orchards at bargain basement prices and have been ogy and increased coolstor- in the kiwifruit indus- Telfer Young’s John Middleton agrees, saying a lot “The only way to keep the youth here otherwise the western, coastal strip between the coast and the rewarded handsomely for their risk. Fortunately the age. There have also been try, orchard values have of the young move out of the area and quite a few is to attract industries which can afford reasonable older retirees come into the area. Kaimai range, a productive zone that is home to at Hayward variety and the Gold3 variety proved to be a couple of post-harvest increased substantially. wages and improve the existing regional facilities,” “There are not a lot of young orchardists or dairy least 85% of kiwifruit grown in the country. Psa tolerant and these varieties have taken the indus- facilities which have sold for “This will provide the Mr Middleton says. For all its continuing transparency travails – while try forward.” alternative uses within the past problem of new entrants to still being knee-deep in a Serious Fraud investiga- Mr Middleton says that in many cases the banks five years, while the coolstores JOHN MIDDLETON: the Industry needing substan- tion – the industry’s single desk monopsony, Mount have been supportive of the growers’ plight, while associated with those proper- Of Telfer Young tial capital. Also undertaking a Maunganui-based Zespri, still clocked global sales the whole region will benefit from the recovery, not ties have been leased to existing greenfield development requires boom over the past six months as post-harvest emerging varieties of kiwifruit, such as kiwiber- this year of an impressive $1.5 billion, up 16% on only from an employment perspective but also from facilities,” Mr Middleton says. a long payback period; accord- companies construct new facilities. This ry, which are only into their second year of 2013/14. In doing so it recorded the highest-ever the added revenue that will be reinvested within the The district has some prize dairy pas- ingly, further development of new plant- construction surge is alongside a general con- proper commercial deployment, with volumes average per hectare return for the industry of $53,884 region, from retailers to service providers. ture and the dairy industry also forms a ings may be stifled.” struction boom in residential housing. As New increasing already. He adds that the avocado for the Hayward variety (that is, the traditional green He estimates that, following another strong year in significant part of the local economy, Mr Mr Franks says the recovery of volumes Zealand’s largest kiwifruit grower, we are mak- industry has also matured in the bay, delivering kiwifruit) that makes up the majority of orchards in Zespri output, further increases in volumes in com- Middleton says, but he believes there has of the kiwifruit Gold variety, as well as the ing a lot of investment into infrastructure, new good returns to growers. the region. ing years will result: future returns will depend on the been more smart money pumped into the continuing strength of the Hayward variety, varieties and markets. The Bay of Plenty has a “Marketers have learned to work with each “The recovery of the kiwifruit industry has been availability of markets to absorb the additional vol- kiwifruit industry of late. has led to a resurgence in confidence. lot of leading edge innovation in horticulture other to ebb and flow volumes of fruit to mar- quite phenomenal, to say the least,” says John Mid- umes and exchange rates, he says. “Over the past three months there have “The lift in volumes are requiring post- and Seeka considers itself amongst the front of kets to optimise returns and there is innovation dleton, who has worked in the western Bay of Plenty “The challenge will be for Zespri to maintain been several Zespri directors who have harvest operators to build more coolstor- that group.” in developing new markets.” KIWIFRUIT BOOM: The industry’s recovery from the vine-killing Psa has been phenomenal with property valuers Telfer Young since 1981. returns to growers as well as growers maintaining purchased more than one kiwifruit orchard age facilities. There has been a building The chief executive says there are also new [email protected]

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Licensed under the REAA 2008 34 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE May 29, 2015 / The National Business Review The National Business Review / May 29, 2015 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE 35

Calida Smylie Auckland-based young pro- to open to students in 2020. It will focus on for suppliers and households, an estimated fessionals moving with their programmes relating to areas of regional 427 construction jobs, and 272 tertiary opera- Newcomers to Tauranga’s families in search of more activity, including marine, ICT and logistics. tions jobs. business scene are invariably Turning up the heat affordable housing and a bet- Back to school Further courses will be developed over time “We recognise that, if we’re going to sup- surprised at how closely the ter work-life balance. to support areas of economic and industry port our region and make it hum, then we business community works, Future innovators may need in the Bay of Plenty. need to be looking at models which take edu- which bodes well for young, also be enticed to stay Following the development of the campus, cation to outlying communities. We’re also high-growth companies and for a start-up boom once the new University of in Tauranga 8000 tertiary students are expected to study in working in partnership with a number of iwi the city’s growth prospects. Waikato branch opens – tra- the Bay of Plenty over a 17-year period. trusts and secondary schools in areas such as The city is fast becom- ditionally the younger demo- It’s hoped that over two stages of construc- Opotiki. ing known for its innovative graphic moved away for tion, the tertiary shared campus will provide “So it’s not just about bricks and mortar start-ups, nurtured by a tight- Callaghan-backed technol- them off to conquer offshore were not a lot of opportuni- New Zealand start-ups go tertiary education and jobs. more than $49 million in direct construction knit group made up from ogy-focused incubator for markets. “WNT looks nation- ties coming out of Tauranga. to Silicon Valley it is over- Nathan Smith expenditures, $47 million in flow-on effects Continued P37 technology incubators, angel high-growth, early-stage wide for companies and we There would be maybe one whelming,” says Wharf42 Becoming a Swiss investors and local body firms that will be able to incubate them in Tauranga a year but that’s certainly not founder Peter Wren-Hilton, army knife A growing city always needs impressive edu- government. “When people access a new repayable if we can but it’s not always the case at the moment. who recently brought over Despite the amount of cational facilities and Tauranga is succeeding come to Tauranga from other grants tool on behalf of the practical – the company “This year half our invest- US entrepreneur Bill Reichert innovation growth Tauranga at both. parts of New Zealand, they’re companies they incubate. needs to be where it needs ments are coming out of and Silicon Valley Forum boasts, it is not always Tauranga and the Bay of Plenty region always amazed at how well It focuses on intellectual to be. But we’re absolutely Tauranga so, yes, it has sur- chief executive Adiba Barney smooth sailing. don’t quite fit into the class of a major city but the business community property-rich companies in seeing increased innovation prised me. A big part of that to speak to local start-ups. As Enterprise Angels’ Mr that’s not stopping it from putting all the puz- seems to work together,” the primary sector, marine coming out of Tauranga and, change is the work done by Mr Wren-Hilton, who was Murphy points out, the city’s zle pieces in place to potentially reach that Enterprise Angels chief exec- sciences, ICT, and high-value with time and as further enterprise angels, which has chief executive of tech ana- small size and relative imma- goal. utive Bill Murphy says. “It manufacturing, and has $7 capability develops, more really stimulated growth. lytics firm Pingar from 2011 turity means few jobs, espe- Millions of dollars, up to $88 million so far, might be the city size is just million from private inves- companies will be based “Investors aren’t the ones to 2013 and started Wharf42 cially for young corporates. have been earmarked for changing Tauranga right for that to happen.” tors – including its three here,” WNT chief executive who drive innovation – that’s early in 2012, says there The American moved in into a true destination for smart tertiary A prime example of founding organisations and Carl Jones says. the entrepreneurs – but they has been a “noticeable step 1997 to Tauranga, where his students interested in both vocational and this collaboration is WNT Tauranga’s economic devel- Mr Jones’ story is similar go hand in hand.” change” in the past couple of Kiwi wife had been raised. He degree-level studies. Ventures, an amalgamation opment agency Priority One to many of the entrepreneurs One such incubator is years within the local busi- helped get Tauranga’s eco- Education is the “cornerstone of a strong of three separate business – to put toward projects over giving the city a reboot. Wharf42, which identifies ness ecosystem. nomic development agency and skilled economy and a major contribu- SCHOOLS IN: Tauranga City one step closer to an advocacy groups – tech the next three years. He was born and bred in high potential tech start-ups He cites increased sup- Priority One off the ground, tor to improved social wellbeing” according integrated tertiary education system incubator Wharf42, innova- WNT will mentor and Tauranga and shifted back and boosts their growth by port networks and co-work- before joining local consul- to the recently released Bay of Plenty Tertiary tion centre Newnham Park invest up to $600,000 in the last year after two decades mentoring and introducing ing spaces – there are now tancy Catalyst Management Intentions Strategy 2014-2019. pus is a step closer this week following the and titanium industry group initial round into companies, working away, most recently them to capital and con- six – as playing a large part Services and co-founding The study lays out the regional plan devel- approval of a heads of agreement document. TiDA – which were all seeking including the $450,000 Cal- working as New Zealand nections in Silicon Valley, in pulling a lot of early stage Enterprise Angels in 2008. oped for the people and communities of The University of Waikato Council endorsed the same Callaghan Innova- laghan repayable loan. It will Venture Investment Fund’s America’s home to more than companies into Tauranga’s “The economy here is an Tauranga and the wider Bay of Plenty. the heads of agreement between the uni- tion grant. take on at least four business- investment manager. 300 global start-ups. centre. The city’s innovation interesting one; we have a It found the region has a youthful Maori versity, the Bay of Plenty Regional Council, The resultant group, es a year, incubate them for “When I first joined “Sometimes we think base is quickly growing, and few large businesses, a few population and a rapidly aging workforce, Tauranga City Council,and the Tauranga set up last December, is a 18-24 months, and then send NZVIF five years ago there we’re quite big here but when there has been an influx of medium-sized, and many combined with substantial socio-economic Energy Consumer Trust. small operator businesses,” diversity. Ministry of Education figures sug- The parties have agreed on the condi- We help grow Mr Murphy says. gest 43% of Maori school-leavers in the Bay tions under which the regional contributions

CBRE (Agency) Ltd MREINZ “Tauranga is difficult. of Plenty do not make a transition to further towards the project – land from Tauranga Licensed Real Estate Agent (REAA 2008) There aren’t a lot of jobs training or education. The Maori community City Council; $15 million from the Bay of opportunities around for chief executives makes up 25% of the regional population. Plenty Regional Council; $15 million from the ExPERIENCE ThE dIFFERENCE like me, so you really have to The resulting consensus from regional Tauranga Energy Consumer Trust – are to be be a Swiss army knife.” stakeholders on the statistical information provided. FOR LEASE But the tide is turning to is an agreement that these dynamics can be The partnership aims to supply the kinds nationwide PAPAMOA PLAZA RETAIL LEASING carry Tauranga’s burgeon- converted into opportunities through col- of skills required by the region and Tauranga At Holland BeckettLawyers we have awealth of experience ing reputation as a business laborative leadership. that are highly specific for the particular Opportunity to secure your spot at the refurbished Papamoa centre. “There is a huge Introducing greater resources for tertiary geographical region and its unique domestic supporting business growth in the Bay of Plenty and nationally. Plaza. Based in one of New Zealand’s fastest growing amount of optimism in education, both vocational and at degree-lev- product. About 80% of New Zealand kiwifruit We offer specialists at very competitive rates plus energy and suburbs, make sure your brand has its place in the retail hub Tauranga, especially for early el, is also predicted by the report to enhance orchards are based in the Bay of Plenty. commitmenttogrow your business. of Tauranga. stage companies. I’m getting Tauranga and the wider economic region. “The kiwifruit industry is on a roll as is the So whether you’re in the Bay or wanttobehere, thinkopportunity reports each week that a lot This will be important because the scale of region’s dairy industry and forestry,” says Bay and getintouch. • Leasing opportunities from 50sqm up to 200sqm of people want to move back resources, funds, students, staff and relevant of Plenty Polytechnic Academic Director, Dr • Anchored by Countdown and The Warehouse here,” Mr Jones says. organisations are more limited in that city Amanda Torr, “so the region has a whole lot of • New refurbished and expanded retail offering “The jobs aren’t quite than in other major cities. things going for it.” • Stage One opening September 2015 Private Bag 12011, Tauranga 3143 here yet but I hope we’ll play The study also encourages the forma- To encourage this agricultural and primary • Stage Two opening September 2016 T 07 5782199 F 07 578 8055 a part in getting those jobs tion of the Bay of Plenty Tertiary Education growth, many companies recognise the need www.hobec.co.nz up and running. Tauranga’s Partnership. This inter-school partnership for greater access to vocational training from Contact us to discuss your requirements now starting to grow, although includes the tertiary institutes Te Whare existing and new tertiary institutes. The wider Tauranga Rotorua Whakatane Opotiki 7 not there yet. But the drive Wānanga o Awanuiārangi, Bay of Plenty Poly- community also wishes for more educational 525 Cameron Road 1108Pukaki Street 97 The Strand 125 St John Street Jonathan Curtis T 07 578 2199 T 07 3494400 T 07 315 6058 is there and the city’s on the technic, Waiariki Institute of Technology and options as Tauranga grows. T 07 308 8325 VE2219 021 620 696 edge of really booming.” the University of Waikato. The partnership’s new campus planned to WA Level 14 Zurich House, 21 Queen Street, Auckland CBD [email protected] Completion of the partnership’s first cam- be built in Tauranga’s Durham St is expected www.cbre.co.nz

SELLING NOW

We arewitnessing agathering the reality is that thereisasymbiotic momentumin the built environment relationship between the two-commercial The Best Address in Town! of Tauranga. Developers appear to be optimism influences the quality of the built STAGE 3 SELLING NOW growing in confidencewithin the region environment, newand regenerated, and Claim your section today! and the public sector is righttheretoo. good buildings, cranes and construction all • Close to walkways, parks and reserves • Easy access to major arterial roads Our recently completed Tauranga Central scream ‘opportunity knocks’” • Elevated Sections PoliceStation, along with campus -Brian Squair,Director,Chow:Hill Architects developments at the BayofPlenty

Chow:Hill Architects, through active 3 2 Polytechnic positively signals to the listening, we cleverly design forour Benmo re Cr escent y a

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C buildings influencethe commercial health l of the city in positiveways. However, www.chowhill.co.nz 0800 THE LAKES | P: 07 543 1730 | E: [email protected] | www.thelakestauranga.co.nz | The Lakes Information & Sales Pavilion, 154 Lakes Boulevard. Open 7 days 11am to 4pm. 36 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE May 29, 2015 / The National Business Review The National Business Review / May 29, 2015 SPECIAL REPORT: TAURANGA – A BUSINESS SHOWCASE 37

estimated to have added about $45 million in unions. Mr Hamilton says the council regards the cash receipts to the regional economy. The Tauranga company’s current market stake in the port as strategic and it ensures Back to school Port leaps ahead from In the past five years, total cargoes through value is now more than $2.3 billion and, stable ownership. the port have grown more than 45% while although the share price has fallen since the He makes it clear that Quayside takes a From P35 container volumes have risen more than 70%. first-half results were announced in February, very hands-off approach to the port, beyond Mr Cairns credits the Bay of Plenty region’s it is still about 17% higher than a year ago. ensuring it is represented by the right direc- as far as we’re concerned. We’re trying a SmartGrowth strategy, created by the local Analysts are optimistic about Port of tors at board level. partnership approach in our educational watershed deal year councils in partnership with government Tauranga’s longer-term outlook, although “We’re aware of its strategy and we’re very delivery, particularly at the lower levels of the bodies, such as the NZ Transport Authority, they are more cautious about short- comfortable with where its strategy is going. programmes. People need to be engaged in industry and community groups, as a key term growth until the dredging has been It has a very good track record,” Mr Hamilton learning the right skills,” Dr Torr says. factor in making it easy to do business in completed. says. University of Waikato deputy vice-chan- Tauranga. But Mr Cairns says last year’s coups are He cites a 2012 report from the Produc- cellor professor Alister Jones agrees there is Jenny Ruth Nevertheless, the Kotahi deal, which has given He praises forethought in town planning, already paying off. He says the Timaru con- tivity Commission, which concluded there real demand for university provision in the Port of Tauranga confidence to go ahead with which has provided for significant indus- tainer port had been “down on its knees” are three major factors in Port of Tauranga’s region. As chairman David Pilkington says in the annual dredging to allow visits from larger ships, means trial buffer zones adjoining the port, and in when his company became involved, han- success. “Experimental models organised in Aus- report, Port of Tauranga’s 2014 financial year was a the Auckland port company is unlikely to retain roading development. dling between 10,000 and 15,000 standard The market discipline of being listed and tralia show that for effective regional growth, watershed one. that status for more than a year or so. “We are the only port in the country that containers a year. its business model are the first two. universities need to be part of the strategy. The nation’s largest port signed two major Port of Tauranga’s chief executive, Mark Cairns, has a grade-separated interchange into our He expects the Timaru port will have han- “The third is, the behaviour of the “We see the Bay of Plenty region and deals. says the dredging contract, which is currently out container terminal. I consider SmartGrowth dled between 80,000 and 90,000 containers cornerstone shareholder is one of an Waikato growing both economically and The first, in August 2013, gave it half of Timaru’s for international tender, should be signed in the has really allowed this region to punch this financial year and that a major reason for investor, rather than trying to second- in population. Universities are part of the Primeport as well as control of its container port next few weeks and he expects the work will be well above its weight in terms of economic the turnaround has been the Kotahi deal. guess management.” innovation system as well. They’re essential for 35 years. completed by August next year. growth,” Mr Cairns says. For example, the production from Fonter- Mr Hamilton says Quayside’s other activi- in the knowledge business so that means The second, just before balance date in June The dredging will give access to the port to ra’s Clandeboye factory, which processes ties also indirectly support the port. It owns knowledge transfer, based on education, is last year, was a 10-year agreement with Kotahi. ships carrying as many as 8200 standard contain- Port of Tauranga’s emergence about 40% of the dairy giant’s South Island 126 hectares of the 243ha Rangiuru Industrial important,” Dr Jones says. Kotahi is the logistics company owned by ers, nearly double the maximum 4500 container It wasn’t always obvious Port of Tauranga was milk supply, used to be exported though Park, the largest prospective industrial zone All the members of the larger Bay of Fonterra and Silver Fern Farms, which will funnel ships currently calling at Tauranga, and will com- going to reach its current eminence. When Lyttelton Port but is now going through on the eastern side of Tauranga. Plenty Tertiary Education Partnership refuse exports from its more than 30 customers in the plete $350 million in capital spending at the port. it became the first port to list on the stock Timaru. Quayside facilitated getting the land, to fall into the trap of treating the new edu- meat, dairy, wool, timber, pharmaceuticals, hor- Mr Cairns says all the building blocks will then exchange in 1992, it was valued at $78 million. which borders both the Tauranga Eastern cational facilities in Tauranga as a lazy, copy- ticulture and seafood sectors through Tauranga’s be there for his company’s position as the pre- Ports of Auckland, which was valued at Dividends to the region Link motorway, currently under construction, and-paste job of their existing campuses. port and Timaru. eminent port to be unassailable, providing it nearly $400 million when listed a year later, Of course, the port contributes hard cash and the East Coast main trunk railway line, The mutual idea is to introduce entirely new In other words, Port of Tauranga is with “a significant strategic moat.” was the unquestioned industry leader for dividends to the region, as well as its more rezoned as industrial in 2007. study opportunities. now the port of choice for New Zea- many years. general economic benefits. Mr Hamilton says Quayside is also a cor- “This is not about University of Waikato land Exporters Inc. MARK CAIRNS: Port of Tauranga’s But it was taken back into 100% council Quayside Holdings, the Bay of Plenty nerstone investor in WNT Ventures, a tech- trying to replicate what we’re already doing, In a follow-up deal in Febru- cargo-handling charges are about ownership again in 2005 and its performance Regional Council’s investment arm, owns nology incubator supported by Callaghan but building a fit for purpose tertiary cam- ary this year, the port and Kotahi 30% lower than those typical at has been extremely poor over most of the 54% of Port of Tauranga. Chief executive Scott Innovation and sponsors Enterprise Angels, a pus in the Bay of Plenty. And we’ve been combined their four domestic Australian ports past decade until the last couple of years. Hamilton says the port contributes close to local angel investor organisation. working in various capacities in Tauranga logistics businesses into a 50/50 Port of Tauranga flourished amid the 90% of Quayside’s income. “We’re keen to see Bay of Plenty build that since 1996, so it’s not a new initiative,” Dr joint venture named Coda. Tauranga’s fast Auckland ports’ woes, which were com- It received $16.2 million in the first half part of the market,” he says. Jones says. Port of Tauranga chief execu- growth no fluke pounded by a prolonged dispute with its this year and nearly $37 million last year. [email protected] [email protected] tive Mark Cairns says the idea driv- He says it’s no fluke that the latest ing Coda is to make the supply chain figures show Tauranga’s economy more efficient by reducing the numbers grew 4.4% in 2014, well ahead of the 2.5% of empty trucks, trains and containers moving national average. around the country. He dismisses a report from the University of Coda expects to move more than five million Waikato that estimates the port affects about 51% tonnes a year of containerised and bulk freight to of the Bay of Plenty’s economic growth, saying it and from freight hubs and key shipping ports. probably double counts a number of areas. And you can bet Port of Tauranga is THE key But Mr Cairns says there’s no doubt his com- shipping port. pany does facilitate much of the region’s growth. Its net profit in the six months ended Decem- New Zealand’s most efficient port ber was $42.6 million, up more than 8% on a year Port of Tauranga is already widely viewed as New earlier. Zealand’s most efficient port. The port directly employs 190 people and Mr Cairns says its cargo handling charges are about 1200 people work at the port itself. about 30% lower than those typical at Australian It handled nearly 20 million tonnes of cargo in ports. the year ended June 2014 and 760,000 standard Its resurgent arch-rival, Ports of Auckland, has containers. grabbed back the mantle of being the country’s During the latest year, 83 cruise ships visited the Brand new store largest container port in the last year. port, up from 43 in 2010, and Mr Cairns says that is coming to Tauranga Crossing Julie Hignett Property forevery type of buyer. REINZLicenced (2008) Property Developers 0800 020 023 [email protected] late 2016

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across dairy farms and orchards priority within the development of ing to the region every week. it can use to invest and recover its before rising to join the exist- the eastern corridor and an essen- “What that actually means,” Mr money. Moving people ing junction of the Rotorua and tial component to an integrated Profitable business, Poole says, “is where Auckland has a Tauranga is fortunate its challenge Whakatane state highways. transport network. supply issue, Tauranga hasn’t.” is to manage the growth it has, he says, The link has 12 bridges, includ- Part of the new section of the “We are working really hard to rather than get growth in the first place, ing the 182m long steel ladder deck link will be tolled. NZTA says with- profitable life make sure we keep, within reason, the like some cities in New Zealand. and freight bridge over the Kaituna River and out tolling, construction would supply and demand for land in equi- “We work really closely with the four bridges over the rail line. probably have been put back five librium.” development community to make sure Mr Wilson says TEL will support to 10 years. Tolls are expected to be This means land is available for we have agreement on what growth’s managed growth of the area, con- in place for 35 years to repay the Hamish McNicol are well looked after.” people who want to come and build, necessary, and how we’re going to fund Sally Lindsay metre than just about any other tribute to economic development borrowed $137 million debt and Specifically, this means consider- whether it be residential or commer- it and who’s going to pay. highway. through improved travel times and interest charges. An organisation substantially funded ing what the staff needs are, from what cial, but that it remains at a reasonable “I believe if you were looking at a Integral to the growth of Tauranga TEL is part of the government’s provide a more direct route to the As an alternative to the tolled by Tauranga City Council has helped employment opportunities there may price. significant competitive advantage for is the $455 million Tauranga East- Roads of National Significance port. As well as shortening the jour- route, drivers will be able to use the 25 businesses move to the city. be for spouses, to what schooling alter- Mr Poole says there has been a Tauranga and the Western Bay, it lies ern Link highway – the Bay of Programme – one of New Zealand’s ney for motorists, greater efficien- existing highway through Te Puke, And the council believes its “holis- natives there are. “very significant increase” in residen- in our ability to manage all of those Plenty’s biggest roading project. biggest ever infrastructure invest- cies and access to the port will help which will be handed to the West- tic” approach to helping companies Mr Poole says this “holistic perspec- tial property turnover in the last 12 complex variables to get land available Six months ahead of schedule, ments. The roads are based around increase the volume of exports and, ern Bay of Plenty District Council relocate gives it an advantage over tive” gives it an advantage in pitch- months. when it’s needed.” the four-lane, 23km Tauranga East- the country’s largest population once the TEL is opened. other cities as a destination, with ing the “good job and good life” of But prices have only risen by about ern Link (TEL) will open near the centres and the focus is on moving The council is working with the another 25 businesses already consid- Tauranga. 5%. A quality of life end of the year. The link runs from people and freight within these local community to design a more ering a move to Tauranga. “We believe that gives us an advan- Being able to ensure price increases ‘second to none’ Te Maunga, near Baypark Stadium areas more efficiently and safely. urban development in Te Puke and Tauranga City Council chief execu- tage. are “reasonable” without “keeping a lid Further to this, Mr Poole believes the in Tauranga, to the existing junc- NZTA says the Bay of Plenty provide a better pedestrian/traffic tive Garry Poole says the city’s eco- “When the companies are in that on it” by ensuring the supply can come business case for Tauranga extends to tion of State Highways 2 and 33, the region needs the TEL for improved friendly environment. nomic development agency Priority space, talk to us, as opposed to other on to match demand, within reason, beyond sheer economic opportunity. Rotorua and Whakatane highways, economic efficiency through Internationally, the trend for toll One, which the council funds, goes places.” has been a planned, strategic move. The city’s latest budget increased near Paengaroa. reduced travel times, improved roads is to move to free-flow elec- further than most agencies in helping “We’ve been working on this for investment in events in the city, such Funder NZTA says, in broad safety for road users, and to pro- tronic collection and centralised incoming businesses. SmartGrowth over a decade now,” Mr Poole says. as arts, culture, and sports, as well as terms, future development along vide employment and access for collection processes. A centrally He says the council believes relocat- In May, 2004, Tauranga City Council, “It’s more and more sophisticated increasing the quality of public spaces. the TEL corridor is expected to new development. “This project managed collection system gives ing a business is not just about helping Western Bay of Plenty District Council, in terms of our population, our view Tauranga also recently opened contribute about $8.5 billion to the will deliver real benefits to the Nearly completed 25km TEL highway the greatest opportunity for capital the company itself move and settle, Bay of Plenty Regional Council and of what the demand side of our curve an Academic Colleges Group private Western Bay of Plenty economy region and to the country,” NZTA investment and fixed operations but in making all the people that want Tangata Whenua adopted a strategy looks like, and also what the supply school, while the University of Waikato and includes 17,500 new homes, Waikato/Bay of Plenty regional in turn, the development of new costs to be spread over more pro- to come with those companies feel called SmartGrowth. curve looks like.” is developing a campus in the CBD. 450ha of industrial development director Harry Wilson, says. residential, commercial and indus- jects. NZTA will install a system welcome as well. It was tweaked three years later but He says supply issues are not about “Quite clearly, we have got a quality and up to 100,000sq m of shops, The new highway is 17 kilome- trial land to the east of the city. based on the Northern Gateway “Some of the businesses that look the essential premise was to manage the council making more land avail- of life second to none,” Mr Poole says. offices and commercial activity. tres of new road and an upgrade of Planning for land use and trans- toll road system north of Auckland. to come to Tauranga, they’ve got a growth evenly throughout the region, able, but about more “serviced” land. “We think we’ve got the fundamentals The existing road is the coun- six kilometres of existing highway. port in Western Bay of Plenty is [email protected] stable workforce, they’ve got a loyal after concerns were raised about con- This means it has prepared trans- of being able to have highly productive, try’s second worst highway. Under It crosses rural land and along part of the SmartGrowth Strategy workforce, and the loyalty cuts both tinued rapid population growth and port, infrastructure, sewerage and highly effective and profitable business the New Zealand road safety the sandhills to the Kaituna River, developed by local authorities and The new Tauranga Eastern Link ways. the lack of leadership and teamwork to other services. in the city, with the quality of life that assessment programme it has past the Kaituna Wildlife Manage- roading agencies. The strategy is will deliver economic and safety “They are interested in making sure support it. Mr Poole says this is “very expen- matches.” more deaths and crashes per kilo- ment Reserve and heads southeast focused on corridors, and TEL is a benefits to Western Bay of Plenty all of their staff, including the families, At the time, 100 people were com- sive” but it is looking at what tools [email protected] PROUDLY SUPPORTING OUR LOCAL COMMUNITIES