The National Business Review / July 14, 2017 17 Spotlight on Special Report

Tauranga has ballooned over recent years, overtaking Dunedin as the country’s fifth largest city and more growth is still to come. Quite simply, Tauranga looks like the future. More than $700 million of commercial property has been approved for the next five years and tourists continue to choose the destination, spending plenty. Big-city hassles are no doubt coming, but right now, the weather seems fine. Smart water use is Tauranga’s next big-city problem

Nathan Smith “Compared to much of , increase industry revenue to $3 billion by we’re not in too bad a shape. But the 2025, with export revenue sitting at close Tauranga’s declining water quality and warning signs are there. Nitrate levels are to $1 billion. Avocados are the next larg- quantity are ringing “alarm bells” as the increasing in our surface water resources, est sub-level sector by value, representing city’s urban areas expand and compete for for instance, and that should be sending approximately 10%. water with horticulture and agriculture. alarm bells. We need to be looking care- Agribusiness is important business in The pending water bottleneck emerg- fully at how we’re managing our land. the wider , underpinned by ing in Tauranga was inevitable because, as “The Western Bay of Plenty, in par- the region’s climate and natural resource small cities grow, they attract big city prob- ticular, has some highly productive agri- base. In 2014, combined exports for dairy, lems. Traffic size balloons, house prices cultural soils and kiwifruit and avocado meat and horticulture were $2 billion. rise and resource management becomes orchards, along with a number of other The Toi Moana Bay of Plenty Economic a central issue. Water management is now crops, that are using greater amounts Action Plan points out how water is a becoming a key issue for resource plan- of irrigation. This is putting a strain on major constraint for the horticultural sec- ning in the region. groundwater resources but also surface tor. In the eastern bay, irrigation schemes Tauranga’s population is forecast to WATER PRESSURE: As Tauranga grows, its water resources. At least theoretically, will be required to assist in unlocking double by 2051, placing increased pres- fresh water resources will be under strain these resources are over-allocated right in excess of 1000ha. And in the western sure on the way various councils manage now and consents have been issued that bay, the tension between water to service existing infrastructure and levels of ser- already under pressure and, as a result, exceed the capacity of those water systems urban growth and horticultural productiv- vice. According to a 2009 study by GHD, quality is declining in some water bodies. to accommodate,” Mr Murray says. ity is an area of considerable concern. the city’s projected water demand by 2051 Chalice Consulting director Warwick The region is also seeing an increase in will be 109,200cu m a day and either addi- Murray, who before stepping over to Who’s using the water land use intensification. This is particu- tional water sources and treatment capac- industry worked for the Bay of Plenty The Bay of Plenty’s horticulture sector is larly significant in the western bay, where ity, or a reduction in peak demand, will be Regional Council and is the agribusiness well-established, contributing just over 3% maintaining productive land is competing required to meet it. action head for the Bay of Connections of the wider region’s GDP. with urban growth. Overall, the Bay of Plenty’s water quality Economic Action Plan, says the GHD pre- Kiwifruit represents the largest sub-sec- “Practically we know, at least with is considered to be good based on national diction remains accurate and the region tor at approximately two-thirds of horti- standards but freshwater resources are needs to better calibrate its water usage. culture in the region. Zespri’s strategy is to Continued P18

Increase in primary National avg. Sustainable retail Primary catchment spend population floorspace primary $ catchment retail 42% by 2033 2X growth 40% catchment by 2033 155m leakage 2017 PAPAMOA, TAURANGA’S LARGEST & FASTEST GROWING RETAIL

With a population that’s growing at twice the national average, large areas of residential land in close proximity and annual building consents at double the greater Tauranga average, Papamoa represents a high growth cell within one of the country’s fastest growing regions. It’s a retail hotspot and Papamoa Plaza sits at the heart of this transformation. Be a part of the retail future of Papamoa at Papamoa Plaza. Contact Tim Raateland, [email protected] or call 03 548 0175 or 027 244 9141. tinline.co.nz 18 SPECIAL REPORT: SPOTLIGHT ON TAURANGA July 14, 2017 / The National Business Review The National Business Review / July 14, 2017 SPECIAL REPORT: SPOTLIGHT ON TAURANGA 19

PAPAMOA: Infometrics predicts its population will be up 74% by 2023 Papamoa to outgun Tauranga on population front

Sally Lindsay facilities are mainly located in development is also planned trend that has been largely self- businesses landbanked before next eight years, it gave Tinline mix is the most important part sale of the 20-store shopping the older Papamoa Beach area, around Papamoa. However, the reinforcing in terms of attracting the suburb became desirable. the confidence to develop the – if you have the right tenants centre to a group of Tauranga A strip of land 25 kilometres long with fewer services available fur- area is probably less well-sited more people to the city. Papamoa Plaza has an centre further.” it encourages people to shop developers in December 2015 and about one kilometre wide ther east. than Tauriko, for example, for Tauranga City Council’s focus expansion under way on 8ha locally.” for $5.1 million. is one of the country’s fastest- Infometrics says the “ribbon- freight and logistics-related on ensuring new residential of undeveloped land. Nelson- Looking for ‘right’ tenants Mr Smith says Tauranga This group then on-sold growing areas. like” nature of growth will make activities, as it lies on the side of development is accompanied based family company Tinline The plaza covers 22,000sq m is under-shopped. “Globally, Fashion Island for $6.25 million Papamoa has transformed it more difficult to justify a single Tauranga that is away from the by employment opportunities bought Papamoa Plaza in 2013, with 45 shops and the extra retail retail through shopping centres to Cotton On, making $1.5 mil- from a rural and holiday desti- large urban hub within Papamoa “golden triangle” growth areas of within Papamoa suggests busi- refreshed the tenancy mix, will add four or eight large for- is about 55% of total spend, lion. Cotton On is in the process nation to a suburb of Tauranga East; instead, retail and other Auckland and Hamilton. ness and job growth will take added 4000sq m of extra retail mat stores. New Zealand is about 35% and of reinvigorating the centre. over the past 20- 30 years and its services are likely to be based on place over the medium term, space and is about to include “We want the right tenants, Tauranga is about 28%, so there In between Papamoa Plaza population growth is expected a number of smaller neighbour- Attracting more people Infometrics says. 5000sq m of large format store not necessarily the ‘right now’ is still an enormous opportunity and at to outstrip all of the city by 50% hood centres dotted throughout The success of the Port of With the attractiveness shopping and a dining precinct tenants. The tenant mix has for more retail space which ties the Tauranga end, a $10 million within 11 years. the area. Tauranga has coincided with of Papamoa as a place to at a later stage. changed over the past four years in with the property economic centre featuring a mini-super- Infometrics’ economic analy- Over the longer term, as strong business growth in the live comes pressures on housing Plaza manager David Hill says and we have identified areas we research we have done.” market, café, restaurant and bar sis predicts Papamoa’s popula- residential construction spreads city, while Tauranga’s lifestyle and business but completion of extensive demographic research are targeting. The changes we Meanwhile, more retail devel- is under way on land fronting tion will be up 74% by 2023, further east away from the older has proved a strong drawcard the Tauranga Eastern Link last before it bought the shopping have made have meant retailers opment is on the drawing board. Papamoa Beach Rd. The retail making it one of the country’s Papamoa Beach area into the Te for families. The spread of year has helped by providing centre revealed more than 50% are up 20-30% on the same time Fashion Island, across the precinct is part of Coast Papa- top population growth areas. Tumu area, there may be scope population growth across all more direct access into the city of Papamoa residents’ retail last year,” Mr Hill says. road from the Plaza, was bought moa Beach’s master plan and is One of the challenges for for a more significant retail age brackets has seen a major and eastern Bay of Plenty. spending is outside the suburb. “As happens in every other by Australian-based brand Cot- designed to service the area and growth in the Papamoa area centre to be developed, the eco- expansion in Tauranga’s social Land availability at more “Because 50% is spent outside place in the world, all our ton On a year ago, dipping its reduce traffic congestion.

is the relatively long and thin nomic forecaster says. infrastructure, businesses and affordable prices has been a big the area and, with an estimated research is showing people want toes into property investment. [email protected] nature of the suburb. Retail Industrial and commercial employment opportunities – a drawcard and some more astute 30% growth in population in the to spend locally. The tenancy ACC lost $10 million on the

Alarm bells ringing for water supply Co-Investment Fund, as well as WNT Ven- Tech sector making inroads tures. Mr Tutt says Bluelab, which makes elec- From P17 gramme manager Ian Morton says work level of investment, but it’s still a large bur- tronic metering and control devices to aid is being done to better understand the den on the ratepayer. Jason Walls plant growth, is another example of a tech surface water, we’re probably not exceed- constraints. “In my view, the answer lies in a joint company thriving in the Bay of Plenty. ing the limit in the region, but it sends a bit “A key point to note is the Bay of Plen- initiative between industry and regional Avocados, kiwifruit and retirement villages I think the main thing all As well as Tauranga having a good eco- of an alarm bell,” says Mr Murray. ty’s water quality and availability is gen- government to address this. Local gov- – three of the things the Bay of Plenty and nomic environment for tech companies, “We probably don’t yet know enough erally good in most places but it’s under ernment has a large part to play in the Tauranga are most famous for. businesses say to us is they’re Mr Tutt says the business community is about ground water resources and what’s increasing pressure and needs improve- planning and infrastructure to deal with But while it doesn’t often come to many keen to get hold of talent and skills welcoming as well. really going on down there. More invest- ment in some locations. an increase in contaminants. But hous- IAN MORTON: Bay of Plenty’s water quality and people’s minds when thinking about “A number of local exporters and even ment is needed to get a better understand- “We are increasing our groundwater ing and industrial developers also need availability is generally good but it’s under pressure New Zealand’s fifth most populous city, attraction is important – Nigel Tutt the council are embracing design thinking ing of what’s going on under the Western monitoring efforts by drilling bores at to invest in infrastructure. It is expensive and needs improvement in some locations. Tauranga has quietly been making inroads and even a bit more of a modern view- Bay of Plenty in particular. new sites and developing a groundwa- to start drilling holes but I think we need in the technology and innovation areas in point of things,” he says. “We are facing a future where we have ter flow model to better understand the more of this research.” There is a real opportunity for local gov- the past few years. ranked as one of the country’s fastest- ing a good ecosystem entrepreneurs and And this is just the beginning, accord- shortages at certain times of the year, both groundwater resource, potential effects of Not enough is known about nutri- ernment and industry to collaborate. We Why? Well, there are a number of growing regions. innovators can thrive in.” ing to Holland Beckett Lawyers partner from a water quality and quantity point abstraction on stream flows, and to pro- ent loss underneath kiwifruit or avocado can’t just use the old wait and hope tech- reasons, according to Priority One chief Mr Tutt says the economic expansion And one doesn’t have to look far to find Ken Hawkes, who says he expects more of view. There is a limit to how much our vide better management tools for alloca- orchards and the extent to which this con- nique, we’ve moved beyond that,” he says. executive Nigel Tutt. has helped Tauranga make the transition some example of young tech companies tech companies to set up shop in the city. water systems can absorb nutrients such tion of groundwater resources. tributes to problems with water quality, “Ultimately, we know the problems of The economy is growing quickly, he into a more diversified city, with an ever in the area doing well. One of the reasons for this, he says, is as nitrogen and phosphorous. And as the “The regional council invests more Mr Murray says. “And once it’s gone, water large cities, and we even know the solu- says, which means it’s easier for tech com- increasing knowledge-led economy. Onesixone – a Tauranga-based startup, access to capital. horticulture industry and urban areas than $24 million each year to maintain quality and quantity takes a long time to tions. We just have to be prepared to make panies to thrive. His organisation, as well as local gov- which develops DJing audio software and “There has been a real emphasis grow, this will put more strain on the water and improve water quality and quantity in return. It could act as a severe drag on eco- the investment to ensure we don’t have ASB Bank’s most recent regional eco- ernment, has a focus on helping these tech entertainment lighting systems, is one lately on access to capital; whether supply,” Mr Murray says. the region through action on the ground, nomic growth if we don’t get on top of this. those problems when we become a large nomic scoreboard, which ranks the eco- companies thrive. example Mr Tutt says. that’s through incubator funds or [angel partnership projects and regulatory “If we want to increase our primary city. This requires courage from our politi- nomic performance of New Zealand’s “We focus on the innovation-led econ- Last year, the company attracted fund- investors], right through to some of the Investment and understanding improvements,” Mr Morton says. produce in the Bay of Plenty, we need to cal fathers to make that investment.” regions, gives the Bay of Plenty area four omy, increasing the density of research ing from the likes of the Bay of Plenty’s

Bay of Plenty Regional Council water pro- Mr Murray says $24 million is a “good address this and make the investment. [email protected] out of five stars and has previously been and development in the area and provid- Enterprise Angels, EA Fund 2, the Seed Continued P20

20 SPECIAL REPORT: SPOTLIGHT ON TAURANGA July 14, 2017 / The National Business Review The National Business Review / July 14, 2017 SPECIAL REPORT: SPOTLIGHT ON TAURANGA 21

STEP CHANGE: Residents and Young tech talent wanted visitors can finally access the water Defibrillating the heart of the city in the heart of Tauranga From P19 “In an in-demand area like Tauranga, perhaps that’s felt a little more strongly.” private equity that has been established in And attracting more talent to the region Nick Grant government. a more vibrant, safe and successful city Tauranga.” may be more difficult than ever, given The Tauranga City Council agreed, centre” – an obviously well-practised And the potential for the tech business- efforts by the Wellington City Council to If not Exhibit A, Jaine Lovell-Gadd could hiring her as its inaugural general man- phrase that trips deftly off Ms Lovell- es is not just limited to New Zealand. attract the best and brightest to the capital. certainly be considered Exhibit B or C of Photo: Luke Shirlaw ager, city transformation in mid-2013. Gadd’s tongue. Mr Hawkes says with the Earlier this year, close to the key drivers underpinning Tauranga’s Ms Lovell-Gadd declines the opportu- One of the main ways to achieve this Port of Tauranga doing so 100 tech specialists from population growth. nity to frame herself as a refugee from a is events, she says, on the basis that “it’s well commercially, the rest around the world descended That growth was sitting at 2.9% in now-not-so-super organisation that had accepted that when you have events in of the world is at the door. on Wellington for the “Look- 2016 and has seen the city overtake become too big in which to effect mean- your city, they bring prosperity and com- see” week. Dunedin as New Zealand’s fifth largest. ingful change. munity pride.” Attracting talent The initiative aimed to An Auckland native, Ms Lovell-Gadd Instead, she notes that “when you’re As such, when the council drew up its But there are some prob- bring skilled tech special- moved to Tauranga three years ago. in a city this size there’s a sweet spot most recent long-term plan two years lems for the city in terms ists from around the world She notes the influx of new inhabit- you can find where you can make a ago, $7.7 million was earmarked over a of its future as a tech and for interviews in the city ants is the result of “a mixture of push difference because you’re closer to the 10 years period for events – “a substantial innovation hub, such as the and pair them up with busi- and pull – the pleasant landscape and customer, and you’re closer to the busi- sum for Tauranga that moves us into the And the council is considering busi- issue of qualified talent. KEN HAWKES: Expects more nesses needing their areas of weather pulls you in and then there nesses … where the council has the top 10 councils in the country in terms There’s a sweet spot ness cases for a new library and its first “What we need here are tech companies to set up shop expertise. are things pushing you away from opportunity to influence the city but of investment in events.” you can find where museum for the city centre. The council more young people who are in Tauranga So far, 64 of the 93 tech where you came from.” you’re also small and nimble enough to Recent events the council has helped will also be the anchor tenant for a “cata- interested in the tech and specialists have either In her case, the pull was provided by make changes.” fund include the Paradox exhibition, you can make a lyst development of office accommoda- innovation areas to make Tauranga their accepted job offers or are in discussions or “nice memories of summers spent here which involved 22 original Banksy art- difference because tion” in the middle of town that’s due to home and the base of their own growth,” negotiations with Wellington employers. since I was a little kid,” along with the A welcome jolt works being exhibited in the centrally be built by 2020. Mr Hawkes says. More than 48,000 people applied to observation that Tauranga was growing The changes Ms Lovell-Gadd is charged located art gallery, around which were you’re closer to the That last is an example of the coun- He says in the past Tauranga has had make the trip. “and I thought I had something I could LAUGHING ALL THE WAY TO THE BANKSY: with facilitating dovetail with the coun- created six “real edgy, out there” outdoor customers cil’s keen interest in working with the a reputation of being a retirement village. But on the other hand, this shows how offer that would help with that.” The recent Paradox exhibition attracted 50,000 cil’s desire to “identify what the city artworks commissioned from street art- private sector, Ms Lovell-Gadd says. But he says the city has “come a long way in demand New Zealand is for tech profes- The push? “I looked at my own city people to the city centre needs and to reflect changing its demo- ists. It attracted close to 50,000 people, – Jaine Lovell-Gadd “You can never do everything on since those days.” sionals around the world and could pre- and, you know, you get a bit tired of the graphics and dynamics” and its ultimate an outcome for a city of 128,000 that Ms your own as a council and as long as Mr Tutt agrees this is an area where the sent opportunities for Tauranga. traffic.” Council’s manager of council controlled aim of “creating an internationally com- Lovell-Gadd calls “amazing.” international marathon. you’re tapped into the needs and expec- sector may struggle in the future. Mr Tutt remains confident the city is a Ms Lovell-Gadd had several decades’ organisations governance and external petitive city with a higher standard of Among upcoming events are Winter And it’s not just events that are being tations of your community, public-pri- “I think the main thing that all busi- great place to work. experience of working for various coun- partnerships. living for all.” Nights, Winter Lights, a laser light show deployed to jumpstart Tauranga’s irregu- vate partnerships enable you to create nesses say to us is they’re keen to get hold “Also, it’s a great place to live – so why cils in Auckland – both local and region- Given that background, she naturally Her particular focus is a strategy to in the middle of town that’s squarely larly beating heart. For example, a pier something amazing for all businesses of talent and that skills attraction is impor- wouldn’t you base yourself here?” al – and decamped to Tauranga after felt she could best make a contribution refresh Tauranga’s urban heart, “which aimed at families, the World Junior and a pontoon and 49 metres of tidal and the wider community.” [email protected] tant,” he says. [email protected] three years as the super-sized Auckland to her adopted home via local has become a bit tired,” and “to create Squash Championship and the city’s first steps have recently been completed.

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Private Bag 12011, Tauranga 3143 www.priorityone.co.nz GDP GROWTH vs NZ 2.5% T 07 578 2199 F 07 578 8055 (Infometrics, 2016) www.hobec.co.nz

Tauranga Rotorua Whakatane Opotiki 525 Cameron Road 1108 Pukaki Street 189 The Strand 125 St John Street T 07 578 2199 T 07 349 4400 T 07 308 8325 T 07 315 6058 WAVE23794 22 SPECIAL REPORT: SPOTLIGHT ON TAURANGA July 14, 2017 / The National Business Review Apartments return to city centre

Nevil Gibson on Papamoa Beach Rd as well as of the above developments and several small community hous- has recently completed a seismic Tauranga’s thirst for property ing developments. upgrade on a commercial build- development was confirmed this Meanwhile, other commer- ing in Willow St for a planned week with its inclusion in the cial, industrial and residential refurbishment. It is also oversee- government’s $1 billion infra- development are proceeding to ing a seismic upgrade project on structure fund. meet the demands of population retail premises on Devonport Rd. Tauranga City Council will growth. The industrial property sector receive $230 million to spark In Tauranga, they include a has tightened in the past year, the building of 35,000 houses, $16 million, 19-apartment devel- with the vacancy rate dropping including a greenfield develop- opment called One Selwyn after from 5.2% to 4.4%. ment at Te Tumu at the eastern its street location. It will be built A new offering for investors end of Papamoa. on seven levels over a cliff facing is the recently built factory for The interest-free loan also the Waikareao Estuary. NZ Specialty Kiwifruit Products, provides for a capacity upgrade The first of new downtown which specialises in processing to the Te Maunga wastewater apartment projects to emerge waste kiwifruit and has a 15-year treatment plant and a new after several years of relative THE STRAND: New apartments and activity lease. The plant is in the Tauriko (Waiari) water treatment plant at inactivity is a 31-apartment, sev- Business Estate, near Tauranga. Te Puke. en-level development near the first and second floors of a new ■ A new $40 million, 7800sq m Industrial sites in Mt Maun- The announcement was police station and Beeches on building at 71 Devonport Rd with five-level office and retail com- ganui’s industrial precinct are preceded by the previous week’s Monmouth (six apartments). two shops occupying the ground plex on the corner of Third Ave- dominated by port-related announcement of 20ha develop- Other new or recent develop- floor. nue and Cameron Rd anchored activities. ment that will add another 240 ments include: ■ The Reserve is a $10 million by Inland Revenue. Expansion by the Port of houses to Papamoa. ■ Latitude Residences, at 10 Park two-level retail and office com- ■ South British House has Tauranga, which is now handling The new subdivision, St at the corner of Cliff Rd and plex on the corner of Harrington undergone a major refurbish- one million containers a year, Manawa The Heart of Papa- overlooking Robbins Park, will and Willow Sts. ment and building programme is taking back previously leased moa, is owned by Nga Potiki run to six levels with 27 apart- ■ At 94 Second Ave, a new $4 over five levels at 35 Grey St. premises to cope with the growth a Tamapahore Trust, whose ments. million three-level building will Property Managers Group, of its own logistics and distribu- property experience includes the ■ A Quest boutique apartment house Employment NZ and the which runs several investment tion operations.

Pacific Coast Retirement Village hotel of 42-suites will occupy the Avonmore Tertiary Institute. funds, has been involved in some [email protected]