Whanganui Industrial Market Assessment Report

04 March 2019

Prepared for

Whanganui District Council

Document reference: WHA 001.18 – Whanganui Industrial Land Assessment\Reporting\Whanganui Industrial Market Assessment Final.docx Date of this version: 04/03/2019 Report author(s): Rebecca Foy, Anamaria Rodriguez, and Derek Foy Director approval: Greg Akehurst www.me.co.nz

Disclaimer: Although every effort has been made to ensure accuracy and reliability of the information contained in this report, neither Market Economics Limited nor any of its employees shall be held liable for the information, opinions and forecasts expressed in this report.

Contents

1 INTRODUCTION ...... 5

1.1 OBJECTIVES AND SCOPE ...... 5

1.2 APPROACH ...... 5

2 BACKGROUND ...... 7

2.1 INDUSTRIAL ACTIVITY DEFINITION ...... 7

2.2 WHANGANUI DRAFT GROWTH STRATEGY 2008-2038 ...... 10

2.3 GHD WHANGANUI INDUSTRIAL LAND DEMAND STUDY ...... 12

3 DEMAND ASSESSMENT ...... 13

3.1 ECONOMIC FUTURES MODEL ...... 13

3.2 EMPLOYMENT DEMAND PROJECTIONS ...... 17

3.3 INDUSTRIAL LAND DEMAND PROJECTIONS ...... 20

4 MANUFACTURING ZONE LAND SUPPLY ...... 23

4.1 SPATIAL ECONOMY MODEL ...... 23

4.2 WHANGANUI INDUSTRIAL ACTIVITY ...... 24

4.3 WHANGANUI INDUSTRIAL ACTIVITY BY LOCATION ...... 28

5 INDUSTRIAL SUPPLY RECOMMENDATIONS ...... 65

5.1 FUTURE INDUSTRIAL LAND REQUIREMENTS ...... 65

5.2 PLANNING CONSIDERATIONS ...... 68

APPENDIX ...... 70

Figures

FIGURE 2.1: CHARACTERISTICS OF INDUSTRIAL SPACE ...... 9

FIGURE 3.6: WHANGANUI DISTRICT POPULATION GROWTH PROJECTIONS, 2013-2048 ...... 14

FIGURE 3.7: WHANGANUI DISTRICT POPULATION ESTIMATES, 1996-2018 ...... 15

FIGURE 3.8: WHANGANUI DISTRICT HOUSING INDICATORS COMPARED TO NZ AVERAGE ...... 16

FIGURE 3.1: WHANGANUI MEDIUM EMPLOYMENT PROJECTIONS, 2018-2048 (MECS) ...... 18

FIGURE 3.2: WHANGANUI HIGH EMPLOYMENT PROJECTIONS, 2018-2048 (MECS) ...... 19

FIGURE 3.3: WHANGANUI INDUSTRIAL LAND REQUIREMENTS (HA) 2018 TO 2048 ...... 21

FIGURE 3.4: WHANGANUI INDUSTRIAL LAND REQUIREMENTS (HA) MEDIUM ECONOMIC GROWTH 2018 TO 2048 ...... 22

FIGURE 3.5: WHANGANUI INDUSTRIAL LAND REQUIREMENTS (HA) HIGH ECONOMIC GROWTH 2018 TO 2048 ... 22

FIGURE 4.1: 2017 WHANGANUI DISTRICT EMPLOYMENT AND BUSINESS BY INDUSTRY TYPE AND LOCATION ...... 25

FIGURE 4.2: WHANGANUI EMPLOYMENT ACTIVITY BY INDUSTRY, 2000-2017 ...... 26

FIGURE 4.3: EMPLOYMENT BY WHANGANUI LOCATION, 2017...... 27

FIGURE 4.4: HEADS ROAD WEST LARGEST INDUSTRIES BY EMPLOYMENT, 2017 ...... 29

FIGURE 4.5: HEADS ROAD WEST EMPLOYMENT BY INDUSTRY TYPE, 2000-2017 ...... 31

FIGURE 4.6: HEADS ROAD WEST BUSINESS COUNT BY INDUSTRY TYPE, 2000-2017 ...... 32

FIGURE 4.7: HEADS ROAD WEST AVERAGE BUSINESS SIZE BY INDUSTRY TYPE, 2000-2017 ...... 32

FIGURE 4.8: HEADS ROAD WEST SHARE OF WHANGANUI MANUFACTURING ZONED AREA EMPLOYMENT, 2000-2017 ...... 33

FIGURE 4.9: HEADS ROAD WEST ASSESSMENT OF INDUSTRIAL LAND SUPPLY ...... 34

FIGURE 4.10: HEADS ROAD WEST CHARACTERISTICS AERIAL PHOTO ONE, JANUARY 2019 ...... 35

FIGURE 4.11: HEADS ROAD WEST CHARACTERISTICS AERIAL PHOTO TWO, JANUARY 2019 ...... 35

FIGURE 4.12: HEADS ROAD WEST CHARACTERISTICS AERIAL PHOTO THREE, JANUARY 2019 ...... 36

FIGURE 4.13: MILL ROAD INDUSTRIES RANKED BY EMPLOYMENT, 2017 ...... 38

FIGURE 4.14: MILL ROAD EMPLOYMENT BY INDUSTRY TYPE, 2000-2017 ...... 39

FIGURE 4.15: MILL ROAD BUSINESS COUNT BY INDUSTRY TYPE, 2000-2017 ...... 39

FIGURE 4.16: MILL ROAD AVERAGE BUSINESS SIZE BY INDUSTRY TYPE, 2000-2017 ...... 40

FIGURE 4.17: MILL ROAD ASSESSMENT OF INDUSTRIAL LAND SUPPLY ...... 41

FIGURE 4.18: MILL ROAD AERIAL PHOTO, JANUARY 2019 ...... 41

FIGURE 4.19: ARAMOHO INDUSTRIES RANKED BY EMPLOYMENT, 2017 ...... 43

FIGURE 4.20: ARAMOHO EMPLOYMENT BY INDUSTRY TYPE, 2000-2017 ...... 45

FIGURE 4.21: ARAMOHO BUSINESS COUNT BY INDUSTRY TYPE, 2000-2017 ...... 45

FIGURE 4.22: ARAMOHO AVERAGE BUSINESS SIZE BY INDUSTRY TYPE, 2000-2017 ...... 46

FIGURE 4.23: ARAMOHO LAND SUPPLY ASSESSMENT ...... 47

FIGURE 4.24: ARAMOHO AERIAL PHOTO, JANUARY 2019 ...... 48

FIGURE 4.25: HEADS ROAD EAST LARGEST INDUSTRIES RANKED BY EMPLOYMENT, 2017 ...... 49

FIGURE 4.26: HEADS ROAD EAST EMPLOYMENT BY INDUSTRY TYPE, 2000-2017 ...... 51

FIGURE 4.27: HEADS ROAD EAST BUSINESS COUNT BY INDUSTRY TYPE, 2000-2017 ...... 51

FIGURE 4.28: HEADS ROAD EAST AVERAGE BUSINESS SIZE BY INDUSTRY TYPE, 2000-2017 ...... 52

FIGURE 4.29: HEADS ROAD EAST ASSESSMENT OF INDUSTRIAL LAND SUPPLY ...... 53

FIGURE 4.30: EASTOWN INDUSTRIES RANKED BY EMPLOYMENT, 2017 ...... 54

FIGURE 4.31: EASTOWN EMPLOYMENT BY INDUSTRY TYPE, 2000-2017 ...... 55

FIGURE 4.32: EASTOWN BUSINESS COUNT BY INDUSTRY TYPE, 2000-2017 ...... 55

FIGURE 4.33: EASTOWN ASSESSMENT OF INDUSTRIAL LAND SUPPLY ...... 56

FIGURE 4.34: EASTOWN AERIAL PHOTO, JANUARY 2019 ...... 57

FIGURE 4.35: LONDON STREET INDUSTRIES RANKED BY EMPLOYMENT, 2017 ...... 58

FIGURE 4.36: LONDON STREET EMPLOYMENT BY INDUSTRY TYPE, 2000-2017 ...... 59

FIGURE 4.37: LONDON STREET BUSINESS COUNT BY INDUSTRY TYPE, 2000-2017 ...... 59

FIGURE 4.38: LONDON STREET ASSESSMENT OF INDUSTRIAL LAND SUPPLY ...... 60

FIGURE 4.39: PUTIKI INDUSTRIES RANKED BY EMPLOYMENT, 2017 ...... 61

FIGURE 4.40: PUTIKI ASSESSMENT OF INDUSTRIAL LAND SUPPLY ...... 62

FIGURE 4.41: MARANGAI AERIAL PHOTO, JANUARY 2019 ...... 63

FIGURE 5.1: WHANGANUI INDUSTRIAL LAND DEMAND 2018 TO 2048 (HA) ...... 65

FIGURE 5.2: WHANGANUI INDUSTRIAL LAND SUPPLY, 2019 ...... 66

FIGURE 5.3: WHANGANUI MANUFACTURING ZONED LAND SUPPLY BY USE, 2019...... 66

FIGURE 5.4: WHANGANUI VACANT OR VACANT POTENTIAL MANUFACTURING ZONE SITES BY LOCATION, 2019 ... 67

FIGURE 0.1: HEADS ROAD WEST TOTAL BUSINESS ACTIVITY, 2017 ...... 70

FIGURE 0.2: HEADS ROAD EAST TOTAL BUSINESS ACTIVITY, 2017 ...... 71

1 Introduction

Whanganui District is currently reviewing the Manufacturing Zone provisions in the District Plan and is seeking to understand what future demand for industrial space will look like and where it is best to provide for additional room for growth if that is required. In recent years, population growth has diverted away from the projected stagnant or declining populations, and has experienced a few years of buoyant increases. This trend has made Council question whether there is sufficient capacity for future land requirements in the most appropriate locations. M.E’s assessment provides direction about the likely future growth, and looks at the capacity and the strengths and constraints of the existing seven Manufacturing zones to provide input into Council’s planning processes.

Whanganui District Council has commissioned M.E to undertake an industrial market assessment to inform and support Council’s review of the Manufacturing zone in the District Plan. Council has previously commissioned reports about the existing structure and future land requirements for industrial land, and our assessment utilises these studies to understand the key dynamics, including demand, land supply, and strengths and constraints.

1.1 Objectives and Scope

The key focuses of our assessment are to:

• Review and build on the report prepared by GHD titled “Industrial Land Demand” study

• Identify the scale and rate of industrial land demand and employment

• Recommend how best to cater for future demand, in terms of the type, extent and location of industrial areas.

1.2 Approach

There are three stages to the assessment of future industrial land requirements for Whanganui District:

1. Demand side assessment.

• We have used the Economic Future Model, a proprietary model to estimate the demand for industrial activity in the future. This model uses Statistics NZ Business Demography data to describe the scale and mix of activity that is currently present in the District, and projects future employment, value added and gross capital formation out to 2048 by using a mixed approach of using population projections to grow sectors of the economy which service population and households, and historical trends, and national forecasts for those sectors which are more export- oriented.

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• Anecdotal information collected by the GHD report, and through meetings with Council employees.

2. Supply side assessment.

• We have used council data and conducted fieldwork in Whanganui to help understand the total supply of Manufacturing zoned land.

• We have used council data, our site visit, a desktop analysis of aerial photographs (including those taken on the site visit), and the assessment undertaken by GHD to inform our understanding of the vacant Manufacturing zoned land.

• We met with council infrastructure representatives to discuss the constraints and strengths of various locations with respect to wastewater and stormwater in particular, but also other natural hazards such as flooding and potential tsunami inundation profiles.

• We have developed a Whanganui Spatial Economy Model, that classifies all meshblocks in the district according to their primary use (with manufacturing taking precedence over all other activities). The framework uses Statistics New Zealand’s Business Demography data to describe what is currently located in each zone and location in Whanganui.

3. Planning recommendations.

• This section draws together the information from the previous two sections regarding demand and supply to make recommendations to Council about the total areas of land required by type of industrial activity (light and heavy), and which locations meet the needs of the market better than others. We make recommendations about how to deal with any zoned land that we assess to be unsuitable for development.

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2 Background

This section summarises the local policy environment and background documents relevant to this assessment. Documents summarised are the Whanganui District Plan, the National Policy Statement on Urban Development Capacity, the Whanganui Draft Growth Strategy and the GHD’s Industrial Land Demand Study. The Manufacturing zone provisions as they stand currently are not consistent with the recent national guidelines that have been developed for classifying industrial land, and it is imperative that Whanganui adopts these approaches when re-drafting the District Plan.

2.1 Industrial Activity Definition

2.1.1 Whanganui District Plan

Manufacturing Zone Provisions

The Whanganui District Plan currently makes provision for a range of industrial and manufacturing activities to occur predominantly in the Manufacturing Zone (Section 6.4 Rules for the Manufacturing Zone). The aim of the zone is to enable a wide range of industrial and manufacturing activities to occur in the zone, , as well as supporting industries, provided that they do not affect the industrial activities’ ability to function efficiently and effectively. The following activities are permitted in the zone1:

• Manufacturing activities;

• Recreation facilities;

• Commercial activities which:

i) Are ancillary to manufacturing activities2; or

ii) Primarily provide food or fuel to people in the Manufacturing Zone; or

iii) Primarily provide materials or components to activities in the Manufacturing Zone; and

iv) Network utilities as provided by Chapter 22.

Other non-economic activities permitted in the zone include reserves and open spaces; relocated buildings and temporary relocatable buildings, and temporary military training activities that comply with Chapter 19.

1 The activities are permitted provided that they comply with the performance standards set out for the Manufacturing zone. 2 In terms of ancillary commercial activity, no more than 500m² or 35%, whichever is the lesser, of the gross floor area of a building used by any activity, shall be used for retailing or office purposes, except where the sole use of the building is for ancillary office purposes, the gross floor area shall not exceed 10% site coverage (section 6.5.6). Page | 7

There are provisions in the Plan to manage the effects of the activities that are located in the zone on other activities within the zone, as well as on neighbouring zones. For example, it is anticipated that the amenity values of neighbouring areas will be protected from reverse sensitivity issues; and while the operational requirements of industrial activities will be recognised, it is important to ensure that nuisance from issues such as noise, light spill, vibration, visual amenity and advertising is limited to within the boundaries of the zone.

Vacant and Underutilised Land

The Plan identifies that there are vacant, disused or visually unattractive industrial sites and road corridors in the Heads Road and Aramoho industrial areas (Section 6.1.3.a). The key concern is whether the current rate of development represents an under-utilisation of land and infrastructure. Policy 6.3.2 seeks to encourage the redevelopment of vacant or underutilised industrial land to ensure a more efficient use of the serviced land occurs. The methods specified for achieving these objectives are to work closely with land owners and developers and potentially use incentives to make redevelopment more attractive. This appears to represent a significant resource to accommodate any future industrial land needs that are assessed in this report.

Manufacturing Provisions for Other Commercial Zones

The Whanganui Central City area is comprised of four distinct commercial zones, the Central Commercial zone, the Outer Commercial zone, the Arts and Commerce Zone and the Riverfront Zone.

The Central City is the retail and commercial core of Whanganui, centred on Victoria Avenue. The District Plan establishes that this is to be an area of high amenity to support the community’s social, cultural, and economic transactions, and discourages activities that may adversely affect the amenity of the area. It envisages that development and activities there should maintain or enhance the high quality amenity of the area (Objective 5.2.3).

To facilitate this high amenity, manufacturing activities are non-complying in the Arts and Commerce (Rule 5.4.5 a) and Riverfront (Rule 5.6.5 a) Zones, and discretionary in the Central Commercial Zone (Rule 5.8.4 a). Manufacturing is also discretionary in the Neighbourhood Commercial Zone (Rule 5.12.3 a).

The Outer Commercial Zone is less concerned with amenity in the zone, and is envisaged to have be a lower density, vehicle oriented area. Manufacturing activity is a permitted activity in the Outer Commercial Zone (Rule 5.10.1 e). For this reason, it is important to consider that space in the Outer Commercial Zone is also available to cater for industrial activities, and this should be considered alongside the capacity provided in the manufacturing zones.

2.1.2 National Policy Statement on Urban Development Capacity

The National Policy Statement on Urban Development Capacity (“NPS-UDC”) came into effect on 1 December 2016 and sets out the objectives and policies for providing development capacity under the Resource Management Act 1991 (“RMA”). It is essential that Whanganui references the provisions of the document when considering their industrial land requirements and assessing the suitability of current zoning definitions and locations for accommodating industrial activities.

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Importantly, the NPS-UDC provides a broader and much easily identifiable definition for industrial activity, than that contained in the existing Whanganui District Plan’s Manufacturing Zone (Chapter 6). It provides a definition for business land that covers a range of activity types, including industrial, commercial, retail, business and business parks, centres and mixed use, and is therefore more inclusive of the broad range of activity that might appropriately locate in industrial areas. The guide provides a typology for property requirements for most businesses which classifies activities into office, retail and industrial. The industrial definition is:

“utilities, manufacturing, wholesale, logistics and distribution, trade suppliers etc., which use relative large platform land with often single level buildings. Industrial zones may be split into “heavy” or “light” industry zones according to their emissions, and tend to exclude significant office or retail activity and residential development.”3

Definitions in the NPS-UDC use ANZSIC4 codes to provide clear direction about the activities which are considered to be industrial, those selected are primarily involved in manufacturing, warehouses and utilities. The following ANZSIC categories are included in the NPS-UDC definition of industrial:

• Manufacturing

• Electricity, gas, water and waste services

• Construction

• Wholesale trade

• Transport, postal and warehousing

• Information, media and telecommunications (Telecommunication services)

• Rental, hiring and real estate (Heavy machinery hiring)5.

The NPS-UDC provides useful information about the land requirements of industrial activities (Figure 2.1), and we have adopted this approach when assessing the suitability of existing Manufacturing zoned land in our assessment of land supply (Section 4.3).

Figure 2.1: Characteristics of industrial space6

Location Characteristic Industrial Preference Location preference Close to motorways, ports, airports and supply chains Intensity of Land Use Land extensive, large lots, flat land Site Size Generally large

3 Ministry of Business, Innovation and Employment and the Ministry for the Environment (2017). National Policy on Urban Development Capacity: Guide on Evidence and Monitoring, p49. 4 Australian and New Zealand Standard Industrial Classification 2006 5 Ministry of Business, Innovation and Employment and the Ministry for the Environment (2017). National Policy on Urban Development Capacity: Guide on Evidence and Monitoring, p54. 6 Ministry of Business, Innovation and Employment and the Ministry for the Environment (2017). National Policy on Urban Development Capacity: Guide on Evidence and Monitoring, p55.

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Compatibility with other uses Heavy industry incompatible (given emissions, noise and traffic impacts). Light Industrial and warehousing can co-locate with other business uses. Own-lease preference Own Typical $ paid (per sqm) Average land values can be $285/sqm - $450/sqm Ability to shift Relatively low (i.e. high costs with moving capital intensive operations) Growth in space requirements Depends – may show declining employment, but increasing output, requiring substantial additional land.

2.2 Whanganui Draft Growth Strategy 2008-2038

The Whanganui Draft Growth Strategy provides some useful commentary around the considerations for future industrial land development within the context of past trends, although the strategy is now somewhat dated.

Existing Location of Industrial Land

The Strategy explains that the abundance of land available for industrial land and the projected low rate of development has resulted in sporadic and unplanned developments. The resulting implication is that infrastructure cannot be delivered well as it is difficult to plan where the next industrial use will occur, and therefore the cost of providing infrastructure tends to fall to the ratepayers rather than to developers.

Demand for Industrial Land

At the time that the Strategy was drafted, the population was expected to decline in the future, although more dwellings would be required due to an ageing population. As discussed in Section 3.1.1 of this report, this trend has changed over the last two to five years and the population is now expected to increase in the short term, although under less optimistic growth scenarios a long-term decline in population is still projected.

The Strategy relied on recommendations from an earlier MWH assessment7 that indicated that relevant growth trends included:

• The primary production sector was likely to be the driver of growth in industrial land demand.

• Activity and growth in the transport, storage and wholesaling sector was largely dependent on expansion of the primary industry sector. That sector was a significant user of industrial land.

• The industries most likely to generate growth and demand for land were those located at Heads Road.

7 An Industrial Growth Strategy was prepared for Council by Truebridge Callender Beech in 1998. That was then reviewed by MWH in December 2005. Page | 10

Although the Strategy is now dated, many of those observations remain relevant, including the importance of the primary sector.

Location of Future Growth

The MWH assessment concluded that there was more than sufficient land to meet future demand for the following 20 years. It made the following observations about the likely location and suitability of land for industrial growth:

• The Heads Road location provided some opportunity for expansion, and was well suited to primary manufacturing.

• Some limited expansion of smaller businesses (i.e. 1-5 employees) could be expected in areas where they have traditionally established (London Street, George Street, and Wilson Street).

• The report anticipated that Westbourne would develop and compete with other centres, but that it was constrained by demand and establishment cost.

• It was anticipated that some areas, such as Eastown and Aramoho, were unlikely to see major growth.

• All areas were expected to see an increase in the number of smaller businesses.

• The most sustainable financial option for catering for growth in the medium term was identified as concentrating activity in Heads Road and expanding opportunities in Eastown and Aramoho.

Key Industrial Land Issues

The 2008 Strategy identified that the following constraints and issues were applicable to the industrial zones:

• Flooding, in 50 year and 100 year events, was a concern for parts of the Heads Road East and West locations.

• Some industrial areas were considered “dirty”, detracting from their market appeal (e.g. parts of Heads Road, the Mill in Westbourne).

• Reverse sensitivity for Residential and Rural zoned activities (e.g. noise from heavy machinery/traffic).

• Reverse sensitivity can happen in the other direction with additional residential development occurring adjacent to manufacturing areas leading to complaints.

• The Manufacturing zone does not distinguish between the types of industrial activities that may exist and have different characteristics that need to be planned for differently. This leads to uncertainty, with two examples provided, such as a timber mill could co- locate alongside a food producer, as well as developers not planning infrastructure appropriately.

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The Strategy also made recommendations about the key considerations for individual areas going forward, and these are discussed further in Section 4.3 of this assessment.

2.3 GHD Whanganui Industrial Land Demand Study

The GHD ”Whanganui Industrial Land Demand Study” was completed for Whanganui District Council in November 2018 and completed five key tasks. Our assessment has been requested to draw on and add value to that report by providing more information about future demand, and making recommendations about how Council should adjust the Manufacturing zones to address issues about constraints and poor uptake..

The GHD report concluded that Manufacturing employment has remained static for the last two decades, and is expected to in the foreseeable future. On the supply side, the report suggests that there is plentiful vacant land in Whanganui currently, and there appears to be up to 150 ha of vacant zoned land and other land that is in an un-used or semi-derelict condition that could be available for redevelopment. The only reason that the GHD report foresees that new industrial land would need to be zoned in Whanganui would be if the land that is currently underutilised is deemed not fit for purpose.

One shortcoming of the GHD work is that even though it identifies the ANZSIC sectors specified by the NPS- UDC as being relevant to an industrial land assessment, the study definition is narrowed to reflect what they believe is encompassed in the District Plan definition of manufacturing. The result of that narrow definition is that the analysis does not include the types of activities that co-locate with manufacturing, and the study does not accurately capture all of the activity occurring on the ground.

Nevertheless, the study does provide useful insights into the vacancy and utilisation rates of land in each of the seven manufacturing zones, and our assessment builds on that work later in this report.

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3 Demand Assessment

This section describes the economic demand projections for industrial activity and in total for Whanganui District over the next 30 years. The projections model has incorporated recent population growth trends as evidenced by the MBIE data and population estimates by using a range of population projections that show both a short-term increase but longer term decrease (medium projection) and a steady increase (high projection). The economic projections for industrial activities have been translated into land demand (GFA and Ha).

3.1 Economic Futures Model

We have used a well-recognised and robust methodology to project future demand which has reference to national economic trends, including the decline of certain types of manufacturing activity. The Economic Futures Model is a macro-economic, multi-regional input-output projection model. It is used by many regional and district councils, economic development agencies and businesses within New Zealand. The model is run using scenarios and maps the growth path of each scenario, for 48 industries across 52 regions, over 30 years.

For each industry the EFM provides projections for the major economic indicators (gross output, value added and employment). For this assessment we have applied the baseline “business as usual” (BAU) scenario, and developed a higher growth scenario, with higher levels of gross fixed capital formation and exports. The BAU scenario is developed on the premise that the economy continues to function in the same way as it has over recent times, although with reference to expected changes in economic activity over time as a result of technological change and international trade flows. The higher growth scenario will provide a summary of a more optimistic growth future, and both will take into account changing demographic structures that influence economic functions.

The EFM provides a detailed set of projections about the types of economic activity that is likely to occur in Whanganui District over the next 30 years. This report provides estimates of employment (MECs8) for each timeframe, as the basis for understanding the industrial land requirements.

3.1.1 Population Projections

Population growth is an input into the EFM because some sectors primarily service the needs of households, while others grow based on their export-oriented role, which is modelled based on historical patterns.

The Statistics NZ (“SNZ”) medium population projections show a growing population for Whanganui District out to 20289 with an increase of 900 people (2.0%) in that time, while the high projections anticipate an

8 Modified Employment Counts (MECs) are a measure of employment developed by M.E to understand the number of employees and working proprietors engaged in activities. We calculate the measure by combining information from Statistics NZ’s Linked Employer Employee Dataset and the Business Demography estimates of employee counts (ECs). 9 10 years, being the medium term in the NPS-UDC Page | 13

increase of 2,500 people (5.7%) (Figure 3.1). In the long term to 2048, SNZ expect that the population will decline by 2,560 people (-5.8%) to 41,700 people under the medium scenario, although under the high scenario growth of 3,100 people (7.0%) is projected. Alternate projections that are applied in other Council planning10 estimates that the District’s population will grow by 440 people (1.0%) by 2028, and 2,170 people (5.0%) by 2048. There is clearly some divergence of opinion as to possible future population growth in the District, and because the fortunes of the District’s economy are likely to be influenced by population growth to some extent, this presents challenges for planning to accommodate business land needs.

Figure 3.1: Whanganui District Population Growth Projections, 2013-2048

50,000 High Medium idnz.co.nz 47,500

45,000

42,500

40,000

37,500

35,000 2013 2018 2023 2028 2033 2038 2043 2048

Based on recent trends Whanganui has been growing at an average annual rate of 170 people per annum over the last ten years, though this growth has not been consistent, with declines in the earlier part of the decade and significant growth in the last two years of more than 700 people per annum (Figure 3.2). It is evident that Whanganui has over the last two years experienced much stronger population growth than in the previous decade, which reflects anecdotal evidence of people choosing to move there from larger cities as the cost of housing continues to increase. What is not clear, is to what extent, and over what timeframe this trend will continue to occur. For the Infrastructure 30 Year Strategy, the Council has taken the view that an average increase of 200 people per annum would be realistic for the ten years out to 2028. This approach would see the district grow to 47,200 people by 2028, rather than by 2043 as estimated by the Statistics NZ projections.

10 Published by idnz.co.nz, an Australian company that uses Statistics NZ data. Because Whanganui District is a subscriber, we have decided to ensure that the projections are consistent other Council workstreams. Page | 14

Figure 3.2: Whanganui District Population Estimates, 1996-2018

46,500

46,000

45,500

45,000

44,500

44,000

43,500

43,000

42,500

42,000

3.1.2 Housing Trends

The Ministry for Business, Innovation and Employment has developed a Regional Economic Activity Web Tool11 to allow comparison of the economic performance of geographic areas, benchmarked against the national average. The housing indicators in the tool provide some confirmation of a recent upturn in Whanganui District’s recent popularity and growth. It confirms growth in population from a very stable range of 43,400-43,900 in the period 2004-2016 up to 44,500 in 2017 and 45,200 in 2018 (Figure 3.3). The indicators also show:

• A decline in housing affordability (buy) relative to the national average, to the lowest level seen since 2006. This indicates that Whanganui has become a relatively less affordable district in which to buy a house, and therefore relatively more popular, since 2014. Renting has not become less affordable in the same time relative to the national average, although is at its lowest absolute level in the period for which data is available (since 2004). So housing is now at its least affordable in Whanganui (both renting and buying) at any time in the last 14 years.

• Mean weekly rents in Whanganui have increased relative to the national average. They are still well below (59% of the) average, but up from 56-57% of the average over the last four years. Mean weekly rent is now $262, having only broken through $200 in

11 http://webrear.mbie.govt.nz/summary/new-zealand?accessedvia=new-zealand Page | 15

about 2011, and then $220 in 2016. These rent data indicate an increasing popularity of Whanganui as a place to live relative to other places in New Zealand.

• Mean house value is now at its highest ever level in the District, at $266,000, up from a fairly stable level of $200-220,000 in the period 2007-2016. House values have increased by 12.7% and 13.4% in the last two years, much more than the national average, although still leaving average house prices at only 39% of the national average, which is actually one of the lowest levels since 2004.

• There has been strong growth in new residential building consents, although the absolute number of those is still relatively small. In 2018 there were 139 such consents issued, double the 61 from 2015, and now at the highest point since the pre-GFC peak of 2005-2008. Whanganui District still only has half as many new dwelling consents per capita as the national average.

Figure 3.3: Whanganui District Housing Indicators compared to NZ Average 12

Together these indicators show that there has been strong demand for housing in Whanganui District in the last two years, and there has been associated population growth, however there remains significant room for ongoing growth, with both renting and buying affordability still well above the national average, and renting, house value and dwelling consents well below average.

12 http://webrear.mbie.govt.nz/summary/new-zealand?accessedvia=manawatu-wanganui Page | 16

3.2 Employment Demand Projections

This section describes the output of the EFM in terms of employment growth for the medium and high projections.

Medium Employment Projections

In total, employment in Whanganui is expected to increase in the medium term (to 2028) by 980 jobs (5.0%) (Figure 3.4). Approximately 58% of the growth (572 MECs) will be in industrial sectors13 that are likely to want to locate in the manufacturing zones or outer commercial areas of the district. Over the long term to 2048, employment in the district is expected to increase by 2,070 jobs (10.5%). That growth would equate to an additional 1,415 jobs in the industrial sectors.

The majority of the growth is expected to occur in the construction industry, with an increase of 310 jobs in the medium term (19.1%) and 840 jobs long term (51.9%). Other sectors in which the strongest employment growth is projected by 2048 include:

• Machinery and equipment manufacturing, +110 jobs (55.0%)

• Road transport, +90 jobs (19.1%)

• Fabricated metal product manufacturing, +90 jobs (34.6%)

• Wholesale trade, +70 jobs (13.0%)

• Other food manufacturing, +50 jobs (20.0%).

Note that these projections do not take into account any specific proposals for new business activity that may be under consideration, rather are modelled based on district, regional and national economic growth drivers. Due to the relatively low level of employment in many of these sectors, a single new proposal could result in a significantly different future for any of these sectors. However, the value in the projections lies more at an aggregate level, which is appropriate for the role that zones play in accommodating multiple types of activities.

13 As defined by the NPS-UDC ANZSIC definition Page | 17

Figure 3.4: Whanganui Medium Employment Projections, 2018-2048 (MECs)

Medium Growth (n) Growth (%) Industry 2018 2023 2028 2033 2038 2043 2048 2018-2028 2018-2048 2018-2028 2018-2048 Industrial Activities Meat and meat product manufacturing 780 790 790 800 800 790 800 10 20 1.3% 2.6% Dairy product manufacturing 40 40 50 50 50 50 50 10 10 25.0% 25.0% Other food manufacturing 250 260 270 280 290 290 300 20 50 8.0% 20.0% Beverage and tobacco product manufacturing 4 4 4 4 4 5 5 0 1 12.1% 27.2% Textile, leather, clothing and footwear manufacturing 480 460 450 440 420 410 420 - 30 - 60 -6.3% -12.5% Wood product manufacturing 160 170 170 170 170 170 180 10 20 6.3% 12.5% Pulp, paper and converted paper product manufacturing ------0.0% 0.0% Printing 50 50 50 50 50 50 50 - - 0.0% 0.0% Chemical, polymer and rubber product manufacturing 130 140 140 150 160 160 160 10 30 7.7% 23.1% Non-metallic mineral product manufacturing 70 80 90 90 100 100 110 20 40 28.6% 57.1% Primary metal and metal product manufacturing 8 9 9 10 10 10 10 1 2 11.9% 21.2% Fabricated metal product manufacturing 260 280 300 310 320 330 350 40 90 15.4% 34.6% Transport equipment manufacturing 110 110 110 110 120 120 120 - 10 0.0% 9.1% Machinery and equipment manufacturing 200 220 240 260 270 290 310 40 110 20.0% 55.0% Furniture and other manufacturing 200 200 200 200 200 200 200 - - 0.0% 0.0% Electricity generation and supply 6 6 7 7 7 7 7 1 1 8.9% 21.2% Gas supply 90 90 100 100 110 110 110 10 20 11.1% 22.2% Water, sewerage, drainage and waste services 90 90 100 100 100 100 110 10 20 11.1% 22.2% Construction 1,620 1,780 1,930 2,070 2,200 2,330 2,460 310 840 19.1% 51.9% Wholesale trade 540 550 570 580 590 600 610 30 70 5.6% 13.0% Road transport 470 500 520 530 540 550 560 50 90 10.6% 19.1% Other transport, postal, courier, transport support and warehousing services. 330 350 360 370 370 380 380 30 50 9.1% 15.2% Air and space transport 10 10 10 10 10 10 10 0 0 1.9% 1.9% Information media and telecommunications 4 4 4 4 4 3 3 0 - 0 0.7% -5.6% Rental, hiring and real estate services 3 3 4 4 4 4 4 0 1 8.7% 19.6% Industrial Total 5,905 6,196 6,477 6,698 6,899 7,069 7,320 572 1,415 9.7% 24.0% Other Activities Total 13,774 14,054 14,185 14,335 14,375 14,316 14,426 411 652 3.0% 4.7% Total Employment 19,678 20,251 20,662 21,033 21,274 21,385 21,745 984 2,067 5.0% 10.5%

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Figure 3.5: Whanganui High Employment Projections, 2018-2048 (MECs)

High High High Industry 2018 2023 2028 2033 2038 2043 2048 2018-2028 2018-2048 2018-2028 2018-2048 Industrial Activities Meat and meat product manufacturing 790 800 800 810 810 810 820 10 30 1.3% 3.8% Dairy product manufacturing 40 40 50 50 50 50 60 10 20 25.0% 50.0% Other food manufacturing 250 270 270 280 290 290 300 20 50 8.0% 20.0% Beverage and tobacco product manufacturing 4 4 4 5 5 5 5 1 1 15.1% 37.3% Textile, leather, clothing and footwear manufacturing 480 470 450 440 430 430 430 - 30 - 50 -6.3% -10.4% Wood product manufacturing 160 170 170 170 180 180 180 10 20 6.3% 12.5% Pulp, paper and converted paper product manufacturing ------0.0% 0.0% Printing 50 50 50 50 60 60 60 - 10 0.0% 20.0% Chemical, polymer and rubber product manufacturing 130 140 150 150 160 160 170 20 40 15.4% 30.8% Non-metallic mineral product manufacturing 70 80 90 90 100 100 110 20 40 28.6% 57.1% Primary metal and metal product manufacturing 8 9 9 10 10 10 10 1 2 13.0% 21.0% Fabricated metal product manufacturing 260 280 300 310 330 340 350 40 90 15.4% 34.6% Transport equipment manufacturing 110 110 120 120 120 120 130 10 20 9.1% 18.2% Machinery and equipment manufacturing 200 220 240 260 280 290 310 40 110 20.0% 55.0% Furniture and other manufacturing 200 210 210 210 210 220 220 10 20 5.0% 10.0% Electricity generation and supply 6 7 7 7 8 8 8 1 2 12.0% 32.1% Gas supply 90 100 100 110 110 120 120 10 30 11.1% 33.3% Water, sewerage, drainage and waste services 90 90 100 100 110 110 120 10 30 11.1% 33.3% Construction 1,630 1,790 1,950 2,100 2,230 2,370 2,500 320 870 19.6% 53.4% Wholesale trade 540 560 580 600 620 630 650 40 110 7.4% 20.4% Road transport 480 500 530 550 560 580 590 50 110 10.4% 22.9% Other transport, postal, courier, transport support and warehousing services. 330 350 370 380 390 400 410 40 80 12.1% 24.2% Air and space transport 10 10 10 10 10 10 10 0 0 1.8% 1.8% Information media and telecommunications 4 4 4 4 4 4 4 0 0 3.9% 4.0% Rental, hiring and real estate services 3 4 4 4 4 4 4 0 1 11.5% 29.2% Industrial Total 5,935 6,267 6,568 6,819 7,080 7,301 7,571 633 1,636 10.7% 27.6% Other Activities Total 13,854 14,324 14,735 15,085 15,375 15,555 15,925 881 2,072 6.4% 15.0% Total Employment 19,789 20,591 21,303 21,904 22,455 22,856 23,497 1,514 3,708 7.7% 18.7%

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High Employment Projections

In total, employment in Whanganui is expected to increase over the medium term by 1,510 jobs (7.7%) under the high scenario (Figure 3.5). A smaller share of the total growth will be in the industrial sectors than projected for the medium scenario, with approximately 41% (compared to 51% in the medium scenario) of the growth (635 MECs). Over the long term to 2048, employment in the district is expected to increase by 3,710 jobs (18.7%). That growth would equate to an additional 1,635 jobs in the industrial sectors.

The largest increase in employment is expected to occur in the construction industry (320 jobs short- medium term, and 870 jobs long term). Other sectors in which the strongest employment growth is projected by 2048 include:

• Machinery and equipment manufacturing, +110 jobs (55.0%)

• Road transport, +110 jobs (22.9%)

• Wholesale trade, +110 jobs (20.4%)

• Fabricated metal product manufacturing, +90 jobs (34.6%)

• Other transport, postal, courier, transport support and warehousing services, +80 jobs (24.2%).

3.3 Industrial Land Demand Projections

3.3.1 Calculating Industrial Land Area Requirements

As employment grows, so too will the built floorspace and land area needed to accommodate that employment. Not all employment will require new space to operate from, and some may be readily absorbed into existing businesses, although that is difficult to model and would necessarily be based on a number of assumptions that would be subject to a high level of uncertainty. For this assessment we assume that new employment will require new space to operate in. That demand for new space might be accommodated within land that is already zoned to accommodate it, or might require new land to be zoned. It is a key objective of this assessment to establish whether there is sufficient land already zoned to accommodate the needs of growth or not.

The employment projections assessed in section 3.1 form the basis of the industrial land demand projections. Employees in different sectors require different amounts of space from which to operate, depending on the characteristics of the industries in which they are employed. Some sectors are very space- extensive (e.g. warehousing) and have relatively low employment density, while others have much higher density. That is accounted for in the land demand projections by applying different space requirement factors (m2 per employee) to each broad sector, in line with guidelines provided in the NPS-UDC

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documentation.14 That documentation indicates that average floorspace (gross floor area, or GFA) required per worker is 100-170m2, although notes that local ratios may be different to the national averages.

Additional Margin of Feasible Development Capacity

The NPS-UDC also requires that local authorities account for uncertainty in land demand by applying an additional buffer on top of the base demand projected. The buffer is required to be 20% in the short (0-3 years) and medium (3-10 years) and 15% in the long term (10-30 years).15

3.3.2 Whanganui Industrial Land Requirements

We have calculated the industrial land requirements for total employment activity in industrial activities for Whanganui from 2018 to 2048 for a range of scenarios (Figure 3.6). These projections do not consider how much land is currently available in Whanganui, either occupied or vacant. Section 4 of this report provides a detailed description of the current utilisation and availability of zoned land in Whanganui, and then Section 5 compares industrial land demand with supply to provide an indication of the level of need for additional zoned land.

The projections show that under the medium projection scenario and allowing for 170m² per employee (medium/high with NPS buffer) growth will require space for an additional 19ha as a maximum by 2028. By 2048, the maximum additional space required will be 23ha (medium growth (high intensity)).

Under the high projection scenario and allowing for a high land area requirement of 170m2 per employee making allowance for the NPS buffer (which should ordinarily be applied only to medium projections) growth will require space for an additional 21 ha as a maximum by 2028. By 2048, the maximum additional space required will be 27ha (high growth (high intensity)).

Figure 3.6: Whanganui Industrial Land Requirements (Ha) 2018 to 2048

Scenario 2018 2028 2038 2048 2018-2048 Medium growth (low intensity) 94.5 103.6 110.4 117.1 23 Medium growth (high intensity) 160.6 176.2 187.7 199.1 38 Medium/low with NPS buffer 113.4 124.4 126.9 134.7 21 Medium/high with NPS buffer 192.7 211.4 215.8 229.0 36 High growth (low intensity) 95.0 105.1 113.3 121.1 26 High growth (high intensity) 161.4 178.7 192.6 205.9 45 High/low with NPS buffer 114.0 126.1 130.3 139.3 25 High/high with NPS buffer 193.7 214.4 221.5 236.8 43

14 Ministry of Business, Innovation and Employment and the Ministry for the Environment (2017). National Policy on Urban Development Capacity: Guide on Evidence and Monitoring, p64 15 National Policy Statement on Urban Development Capacity 2016, PC1, p13, http://www.mfe.govt.nz/publications/towns-and- cities/national-policy-statement-urban-development-capacity-2016 Page | 21

Figure 3.7: Whanganui Industrial Land Requirements (Ha) Medium Economic Growth 2018 to 2048

250

200

150

100 Land area (ha) Land area

0 2018 2023 2028 2033 2038 2043 2048 Medium growth (low intensity) Medium growth (high intensity) Medium/low with NPS buffer Medium/high with NPS buffer

Figure 3.8: Whanganui Industrial Land Requirements (Ha) High Economic Growth 2018 to 2048

250

200

150

100 Land area (ha) Land area

0 2018 2023 2028 2033 2038 2043 2048 High growth (low intensity) High growth (high intensity) High/low with NPS buffer High/high with NPS buffer

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4 Manufacturing Zone Land Supply

This section provides a contextual overview of Whanganui’s manufacturing activities, establishing a spatial framework from which to summarise current economic activity, land supply and vacancy. An historical summary of employment trends by economic sector is provided, as is a detailed summary of the type and location of economic activity in the district, including identification of major industrial activities. Our assessment of the suitability of land for industrial activity and occupancy levels is provided. Taken together, this detailed spatial overview of Whanganui’s manufacturing land provides a robust basis from which to assess the adequacy of that land to accommodate the needs of future demand, as assessed in section 3.

4.1 Spatial Economy Model

To understand where economic activity is located within the district, we have developed a spatial framework to code all the meshblocks in the district according to their primary zone classification in the District Plan. For this assessment, the focus has been ensuring that each of the meshblocks with some area classified as Manufacturing zone have been captured. However, we have also classified all the remaining meshblocks according to the District Plan zoning, so that we can understand where industrial activity is located if it falls outside of the Manufacturing zones.

The SEM uses data from Statistics NZ’s Business Directory, which identifies the number of businesses (geographic units) and employees (employment count, or ECs) by meshblock and industry code (ANZSIC). Market Economics has developed a methodology for estimating the number of working proprietors and includes these in our modified employee count (MEC16) estimates. The process involves incorporating information from the Linked Employer Employee Dataset to estimate the number of working proprietors by industry and location. This is an important distinction because for some industry sectors businesses are typically small and the owner operator is an integral part of the workforce and therefore needs to be counted, for example dairy owners and farmers.

The SEM uses the meshblock-based coding framework to summarise employment activity in the district into distinct locations, such as each individual centre, business area, and non-economic areas. The framework is useful for understanding the spatial distribution of economic activity within the District, including whether economic activity is choosing to locate in areas intended for that activity according to the zoning provisions, or whether that activity is locating in other zones.

16 An estimate of total employment that includes both paid employees (ECs) and working proprietors. Page | 23

4.2 Whanganui Industrial Activity

4.2.1 Current Situation

In 2017, there were 4,182 businesses (Geos) employing 19,775 people in Whanganui (Figure 4.1). Of those employees, just under a third (6,011 MECs) were engaged in the industrial sectors. Together the Manufacturing zones accommodate 23% of the district’s employment (4,455 MECs). The largest employment concentrations are in the other commercial and rural production zones (47%, 9,250 MECs), and a significant share (31%, 6,070 MECs) are in the ‘non-economic’ zones (rural, residential and open space zones).

Of the 4,455 MECs employed in the eight Manufacturing areas, 80% (3,580) are employed in industrial sectors. Those 3,580 MECs equate to 18% of Whanganui’s total workforce, and 60% of the district’s industrial employment (Figure 4.3). Most industrial employment is located at Heads Road West (2,750 MECs, 46%), and other significant locations include the Outer Commercial zone (1,010 MECs, 17%) and the Residential zones (800 MECs, 13%)17.

Heads Road West is by far the largest Manufacturing area, and 69% (3,090 MECs) of all employment (and 77% of industrial employment) in Whanganui’s Manufacturing zone is located there. The other Manufacturing areas are much smaller, with the largest of those being Heads Road East (560 MECs, 13% of Manufacturing zone employment), London St (320, 7%) and Aramoho (220, 5%). Heads Road West is not only significant within the district’s manufacturing areas but also within all zones, as it accommodates 46% of Whanganui’s industrial employment, and 16% of all Whanganui employment (Figure 4.3).

17 We have examined the location of the data and it shows that there are a range of small-medium sized businesses operating out of the residential zone, including: • manufacturing businesses such as one 5+ MEC business for milk and cream processing (C113100), one 10+ MEC factory based cake and pastry manufacturing company (C117200), a large (30+ MECs) other wood product manufacturing enterprise (C149900), one large (20+) printing company (C161100), and one medium (5+ MECs) non factory based bakery product manufacturer (C117400); • electricity, gas, water and waste services such as one small (5+MECs) solid waste collection services company (D291100); • construction companies such as two 5+MEC businesses, one 10+ MEC businesses and two 20+ businesses involved in house construction (E301100), one 5+ MEC business and one 10+ business engaged in painting and decorating services(E324400), two small (5+ MECs) plumbing services (E323100), and one large (40+ MECs) other heavy and civil engineering construction (E310900); • wholesale trade companies such as one 10+ MEC dairy produce wholesaling company (F360300), and one small (5+ MECs) clothing and footwear wholesaler (F371200). The data uses the registered mailing address as an indication of the location of the business, and for some enterprises, typically in the construction sector for example, often the home address of the business owner is used for correspondence, and therefore it is difficult to identify the exact location of those activities, however given that they don’t use space in the same way as other industrial activities, this is less of a planning consideration. Page | 24

Figure 4.1: 2017 Whanganui District Employment and Business by Industry Type and Location

MECs GEOs Other Other Retail Trade, Retail Trade, Finance and Education, Finance and Education, SEM Location Farming and Accommodation Government Farming and Accommodation Government Industrial Professional Social and Total Industrial Professional Social and Total Mining and Personal Services Mining and Personal Services Services Cultural Services Cultural Services Services Services Services Manufacturing Zones Manufacturing Heads Road West 2,750 50 120 50 20 110 3,090 90 6 20 40 4 7 170 Manufacturing Heads Road East 320 - 220 10 9 - 560 30 - 10 20 1 - 70 Manufacturing London Street 190 - 70 10 - 50 320 10 - 20 10 - 4 50 Manufacturing Aramoho 150 6 50 4 - 4 220 10 1 9 5 - 2 30 Manufacturing Eastown 40 - 30 3 - 50 120 6 - 2 2 - 4 10 Manufacturing Mill Road 120 1 - 2 - - 120 6 1 - 5 - - 10 Manufacturing Putiki 10 2 - 2 - 10 20 1 2 - 2 - 1 6 Marangai Manufacturing and Rural Amenity 0 2 - 1 - 1 5 0 3 - 2 - 1 6 Manufacturing Zone Total 3,580 60 490 83 29 225 4,455 153 14 61 86 5 19 352 Central Commercial 130 20 680 380 200 460 1,880 40 10 130 140 4 40 360 Outer Commercial 1,010 90 1,860 640 600 610 4,800 140 50 190 260 20 80 750 Neighbourhood Commercial 60 9 230 20 2 1,150 1,470 20 3 60 20 1 20 120 Arts and Commerce 20 - 30 20 - 110 180 5 - 5 10 - 6 30 Airport Enterprise Zone 30 20 - 0 - 3 50 2 2 - 2 - 3 9 Rural Production 170 450 60 80 - 120 870 60 270 30 160 - 20 540 Other Commercial and Production Zones 1,420 589 2,860 1,140 802 2,453 9,250 267 335 415 592 25 169 1,809 Residential 800 120 610 560 10 2,400 4,500 340 70 210 560 5 210 1,390 Rural Lifestyle 130 100 30 50 - 170 480 40 50 9 70 - 10 180 Rural General 80 430 30 60 360 80 1,040 40 260 7 100 2 20 440 Rural Residential 1 20 - 4 - 2 30 1 2 - 7 - 2 10 Coastal Residential ------Reserves - - - - - 20 20 - - - - - 1 1 Other Non Economic Zones 1,011 670 670 674 370 2,672 6,070 421 382 226 737 7 243 2,021 Total 6,011 1,320 4,020 1,898 1,201 5,351 19,775 841 731 702 1,415 37 430 4,182

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4.2.2 Past Trends

Employment in Whanganui has remained relatively stable this century, with a maximum of 20,700 MECs in 2005, and a minimum of 18,500 MECs in 2014. The current level of employment (19,780 MECs) sits just above the midpoint of the range for the last seventeen years, with total employment trending upwards since the 2014 low. In the last two years there has been significant growth in employment, with a year on year increase of 570 jobs between 2015 and 2016, and an increase of a further 460 jobs between 2016 and 2017. These trends mirror the recent population growth discussed in section 3.1.1.

Historically, the industrial sector has been the most significant sector in the district in employment terms, with employment ranging between 5,130 jobs at the lowest point in 2012 to 6,430 jobs at the highest point in 2008 (Figure 4.2). Recent trends since 2012 have seen the sector return to healthier times, although the long term trend since 2000 is for flat growth. Other significant sectors in Whanganui include “Other Education, Social and Cultural Services”, which has the second largest level of employment and has an upward trend, and the “Retail Trade, Accommodation and Personal Services” sector which has remained relatively static over time, albeit with growth since 2016, and is closely linked to population growth.

Figure 4.2: Whanganui Employment Activity by Industry, 2000-2017

10000 Industrial Farming and Mining Retail Trade, Accommodation and Personal Services Finance and Professional Services Government Services Other Education, Social and Cultural Services

7500

5000

2500

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Figure 4.3: Employment by Whanganui Location, 2017

Other Non Economic Zones 1,011 Industrial Employment Total Employment 17% Heads Road West 3,090 16% Heads Road East 560 3% Other Non Economic Other Commercial Heads Road West 2,750 Zones 6,070 410 46% 31% London Street 320 2%

Aramoho 220 1%

Eastown 120 0%

Mill Road 120 1%

Putiki 20 0%

Marangai 5 0%

Outer Commercial 1,010 17%

Marangai 0 0%

Putiki 10 Heads Road East 320 Other Commercial 4,450 Outer Commercial 4,800 0% Mill Road 120 5% 22% Eastown 40 2% 24% 1% Aramoho 150 London Street 190 2% 3%

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4.3 Whanganui Industrial Activity by Location

This report concentrates on the industrial activity that is occurring in Whanganui’s Manufacturing zoned areas, however significant shares of employment are also located outside those areas, especially in the Outer Commercial zone, where industrial activity is anticipated, but also in non-commercial and non- production zones. The purpose of this section is to describe the nature of economic activity that is present in the eight manufacturing areas, and provide commentary about the overall utilisation of the zoned area.

The net land area (that is, excluding roads and reserves, and available for built development) of Whanganui’s Manufacturing areas is as follows:

• Heads Road West, 114.4 Ha

• Mill Road, 104.7 Ha

• Aramoho, 61.9 Ha

• Heads Road East, 22.7 Ha

• Eastown, 11.6 Ha

• London Street, 4.7 Ha,

• Putiki, 1.2 Ha.

We have treated the Marangai and Manufacturing and Rural Amenity differently, as it is currently occupied by rural activities, and there are no plans to change the underlying use of the land in the foreseeable future. We note that all land areas in this report refer to net land, unless otherwise stated.

4.3.1 Heads Road West

Existing Business Activity

Heads Road West is the largest Manufacturing zoned area in Whanganui with approximately 114ha net area. In 2017, there were 170 businesses employing 3,090 people. Approximately 89% of the employment in the area is in the industrial sector (2,750 MECs), with other industry sectors playing smaller supporting roles, such as retail trade, accommodation, and personal services (120 MECs) and other education, social and cultural services (110 MECs).

Figure 4.4 shows that the top five industries in 2017 were:

• Meat processing, 880 MECs in two businesses

• Road freight transport, 450 MECs in four businesses

• Leather tanning, fur dressing and leather product manufacturing, 270 MECs in two businesses

• Prepared animal and bird feed manufacturing, 150 MECs in two businesses,

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• Road and bridge construction, 120 MECs in three businesses.

Figure 4.4: Heads Road West Largest Industries by Employment, 201718

Overall the average size of industrial businesses was 30.0 MECs in Heads Road West, with the average size of the other non-industrial businesses being 4.4 MECs. The average business size for all businesses in the Heads Road West location was 18.2 MECs. However, there are some very large businesses in the area, with the top three industries employing an average of more than 100 people per business, with the meat processors being an average of 440 per business.

Key companies in the area include:

• AFFCO Land Meats - 47 Bryce Street. The factory processes beef and pork to supply the domestic market, with a wide range of activities such as slaughter, and processing to retail cuts, gas flushed, chilled and frozen, offals and value added products. The original processing plant was built in 1897 and has undergone recent renovations to ensure that it can cope with the processing needs19.

• AFFCO Imlay – Imlay Place. The factory processes sheep and bobby calves and is licensed to export to major international export regions, including the EU, North America, China, Middle East and Asia, for a wide range of processing activities such as retail cuts, gas flushed, chilled and frozen, offal, feed meals and tallow. A rendering plant is also located there and is currently undergoing extensive refurbishment20, it

18 See the Appendix for a detailed table of all activities (Figure Appendix.1) 19 www.affco.co.nz 20 www.affco.co.nz Page | 29

renders raw material from AFFCO Manawatu and Land Meats Whanganui. Hides and skins are exported to domestic locations outside of the district (Napier and Wiri, Auckland).

• Tasman Tanning – Heads Road. This tannery employs 280 people21 and is the only end- to-end leather business and finishing tannery in New Zealand and Australasia. They process up to 20,000 wet blue hides and 8,000 finished leathers per week. The business has been located in Whanganui for over 60 years.

• Open Country Dairy – Imlay Place. The site processes dairy from Taranaki and Manawatu and specialises in manufacturing low thermopile and High Heat Heat Stable Whole Milk Powders (Standard, Vitamin Fortified, Instant) in a factory that can process to kosher and halal standards.

• Mars Petcare – Heads Road. The Mars Petcare company has been operating in Whanganui for more than 25 years. The plant has been extensively rebuilt in the last ten years, after additional land was brought to expand the plant in 2002. In 2018, the company employed 170+ people22. The semi-automated manufacturing plant has a 5,000m² factory which operates seven days a week.

• Wanganui Coldstorage Ltd, had approximately 40 permanent staff in 2018 when it was sold to a subsidiary of Denmark-based international petfood processing company BHJ. BHJ processes meat and fish materials in 13 countries for the petfood and feed industries23

• QSI – Pacific Place. QSI manufacture and distribute safety and medical products such as first aid kits, emergency kits, spill absorbent products, height safety, clothing, respiratory products and other general medical and safety products. The company has been in operation for over 40 years and has won several industry awards for innovation and excellence.

• McCarthy’s Transport – Heads Road. The main activity of this company is log cartage by freight vehicles in the lower North Island, with Whanganui being the hub for drivers. McCarthy Transport has been operating in Whanganui for over 60 years.

• Emmetts Civil Construction Ltd – Heads Road. Emmetts has been established for over 50 years and provides civil construction services such as bridge building and repairs, contracting, precast concrete manufacture, crane and plant hire, pile driving, concrete cutting, and drilling.

• Waters and Farr – Hinau Street. Waters and Farr is a wholesaler that makes polyethelene and polypropolene pipe and has been in Whanganui since 200224. The

21 www.tasmanleathers.co.nz 22 https://www.nzherald.co.nz/wanganui-chronicle/business/news/article.cfm?c_id=1503422&objectid=12049715 23 https://www.nzherald.co.nz/the-country/news/article.cfm?c_id=16&objectid=12060150 24 https://www.nzherald.co.nz/wanganui-chronicle/business/news/article.cfm?c_id=1503422&objectid=11918866 Page | 30

Whanganui location is the national base for the company and employs approximately 30 staff.

• Downer – Hinau Street. Downer designs, builds and sustains assets, infrastructure and facilities such as roads, rail, bridges, power and gas, communications, water, oil and gas, and defence for example. Downer undertakes much of the infrastructure work required by Whanganui District Council by working in an alliance with the council and with Opus.

• Q-West Boat Builders is located off Gilberd Street adjacent to Port Whanganui. Port Whanganui is currently little more than a slipway, but there are plans to redevelop the area which are currently being investigated with funds from the Provincial Growth Fund (discussed later in this section). It is an aluminium boat builder of vessels ranging from pleasure craft, catamarans, fishing and charter craft, pilot boats, monohulls, ferries, high speed foil assisted catamarans and work boats.

Business Activity Trends

The Heads Road West location has historically been dominated by industrial activity which makes up approximately 90% of total employment (Figure 4.5), reaching an employment peak for industrial activities in 2008 with 2,900 MECs in 111 businesses.

In 2016, the average business size of industrial companies was the highest over the period from 2000, at 31.2 jobs (Figure 4.6). From 2000 onwards the average business size of industrial firms has fluctuated around 25+ MECs, while in non-industrial companies that size has been much lower at around 4.5 MECs per business.

The share of all employment in the Manufacturing Zoned areas that is located in Heads Road West has increased over time, from 58% in 2000 to 62% in 2017 (Figure 4.8). In other sectors, Heads Road West’s share of employment has fluctuated over time, ranging from 12% in 2000, to a low of 9% in 2008, increasing to approximately 11% from 2011 onwards.

Figure 4.5: Heads Road West Employment by Industry Type, 2000-2017

3,500 100%

98% 3,000 96%

2,500 94%

92% 2,000

90% MECs 1,500

88% % % LocalArea MECs

1,000 86%

84% 500 82%

- 80% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

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Figure 4.6: Heads Road West Business Count by Industry Type, 2000-2017

120 100%

90% 100 80%

70% 80 60%

60 50% GEOs 40%

40 % LocalArea GEOs 30%

20% 20 10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

Figure 4.7: Heads Road West Average Business Size by Industry Type, 2000-2017

15 Avg Avg Bus Size (MECs) 10

- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other

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Figure 4.8: Heads Road West Share of Whanganui Manufacturing Zoned Area Employment, 2000-2017

70%

60%

50%

40%

30%

20%

10% % % of WhanganuiManufacturing Employment Area

0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Total Other

Land Supply at Heads Road West

There are small parcels scattered throughout the Manufacturing zone at Heads Road West that are underutilised or represent vacant potential opportunities. The GHD assessment indicated that underutilisation of land in the area tended to be in the form of derelict buildings rather than vacant land. It identified that there is approximately 25ha of vacant land on the outskirts of the zone, namely Balgownie Reserve, the Port Operational Area, and land adjacent to the AFFCO site. In comparison our assessment of vacant potential land identifies approximately 14.8ha, or 13% (Figure 4.9). Approximately half of the vacant or vacant potential land parcels are small (less than 2,000m²), with 13% of parcels larger than 7,500m² (6 properties).

The River City Beef processing plant at 2 Gilberd Street is currently vacant, and listed for sale, and is included in our estimate of vacant or vacant potential land. It is a significant built structure that is registered with MPI; and meets the specifications for processing goods destined for South East Asian markets, and is Halal and US listed. The property has cattle yarding, a special high chain for larger animals that often cannot be processed by other plants, blast freezers, chillers, an extensive range of purpose built and generic assets for beef slaughter, a by-products courtyard and additional land available for development. This represents an opportunity for a large food processing business to be accommodated in the location in a purpose built factory.

There are a number of parcels in the Heads Road West location that are unsuitable for further development but are currently classified as manufacturing zone. In our opinion, the following parcels are unsuitable:

• Balgownie Reserve, 22.2 ha in intended to remain as an open space area and not be developed. The reserve was previously the site of a landfill and would require significant work to make it developable.

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• There is some land to the west of Balgownie Reserve, that is 12.5 ha, that appears to be boggy and is part of the Kokohuia wetland. That land would need significant remediation work to enable it to be developed and this is unlikely to occur.

Figure 4.9: Heads Road West Assessment of Industrial Land Supply

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Figure 4.10: Heads Road West Characteristics Aerial Photo One, January 2019

Figure 4.11: Heads Road West Characteristics Aerial Photo Two, January 2019

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Figure 4.12: Heads Road West Characteristics Aerial Photo Three, January 2019

Factors Influencing Land Use at Heads Road West

The following key factors may affect the utilisation of the zoned area at Heads Road West:

• The GHD assessment highlighted that there are plans to revitalise the Whanganui Port, with investment into the feasibility and form of that development to be funded by Central Government. The report noted that a large proportion of existing vacant land is within the port. In early 2018 it was announced that subject to a business case stacking up, the government’s Provincial Growth Fund (“PGF”) would allocate $3m to port revitalisation, $3m to an upgrade of the town’s rail line, leading to the port, and $90,000 to assist with further technical and design work on the port.25 Concept designs and masterplans have been undertaken, although no delivery date has yet been announced. Because any upgrade is in its very early stages, it is not possible to assess the stimulus this may have for economic growth in the area, or potential effects on industrial land requirements.

• There are a range of site sizes available for development, with 23 small parcels (less than 2,000m²), 17 medium parcels, and 6 large parcels (greater than 7,500m²).

25 https://www.beehive.govt.nz/release/manawat%C5%AB-whanganui-port-and-rail-boost Page | 36

• There are a number of planning constraints that will impact on the ability for additional business activity at Heads Road West;

o including capacity issues with the stormwater and wastewater pumping stations on the west side of the river, which are under significant pressure. Large users of water for processing and production may need to financially contribute to solutions for handling bigger volumes of water in order to expand their operations or locate there.

o Flooding is a concern for parts of the zone in 50 year and 100 year events26.

o In the event of a significant tsunami, the majority of the Heads Road West area lies within the red, orange or yellow evacuation zones. If such an event occurred this would represent a significant loss of, or damage to, industrial buildings and infrastructure, and could have a crippling effect on the businesses located there.

o The Draft Growth Strategy indicated that some parts of the zone were considered to be “dirty” which had an impact on market desirability.

4.3.2 Mill Road

Existing Business Activity

Mill Road is the second largest manufacturing zoned area in Whanganui with approximately 106ha net area. In 2017, there were 10 businesses employing 120 people, reflecting its status as a relatively undeveloped manufacturing area. The GHD report estimated that approximately 78% of the zoned area was in use for agricultural purposes, and a further three residential sites accounted for another 10% of the total land area. Approximately 98% of the employment in the area is in the industrial sector (120 MECs).

The business directory recorded ten industry sectors in the area in 2017 (Figure 4.13), with the top two employers being:

• Other grocery wholesaling, one business of 63 MECs

• Site preparation services (construction), one business of 37 MECs.

Overall the average size of industrial businesses was 19.3 MECs, with the average size of the other non- industrial businesses being 0.5 MECs. The average business size for all businesses in Mill Road was 9.9 MECs, which is about half the average size of all businesses in the Heads Road West location.

Key companies in the area include:

26 WDC Strategy and Development Environmental Policy, November 2008. Draft Wanganui Growth Strategy, 2008-2038, p21. Page | 37

• Elders Primary Wool developed a wool store in the Mill Road which was completed in 2013. Approximately 25,000 bales are processed annually, with the wool originating from Taranaki, Taihape and Manawatu.27

• D Hickmans Transport and Storage provides transport and storage of dry bulk and general freight, dairy and non-dairy products, devanning of containers. It appears that they have relocated from Castelcliff into the Mill Road location.

• Jurgens Demolition and General specialise in large industrial demolition, partial demolition and internal and external demolition. They were established in Whanganui over 50 years ago, and work in a range of location in New Zealand.

• Parkwood Doors NZ manufactures solid timber doors and louvre doors and has been in Wanganui for 25 years, but in their existing purpose built premises for approximately two years.

Figure 4.13: Mill Road Industries Ranked by Employment, 2017

Ave. Broad Industry Industry Sector MECs Geos Business Size Industrial Other grocery wholesaling 63 1 63 Industrial Site preparation services 37 1 37 Industrial Road freight transport 7 1 7 Industrial Other hardware goods wholesaling 6 1 6 Industrial Tiling and carpeting services 2 1 2 Industrial Other warehousing and storage services 1 1 1 Other Sheep, beef cattle and grain farming 1 1 1 Other Finance 1 3 0 Other Non-residential property operators 1 1 1 Other Residential property operators 0 1 0 Total 119 12 10

Business Activity Trends

The existing activities have located there relatively recently, dating from around 2008, subsequent to the closure of the log sawmill. The location has historically been dominated by industrial activity which makes up more than 95% of total activity each year28 (Figure 4.14). In 2017, there were nearly as many employees there as there were when the Mill was at peak operation

27 https://www.nzherald.co.nz/wanganui-chronicle/news/article.cfm?c_id=1503426&objectid=11179300 28 The exception to this was in 2008, when the sawmill operations had ceased and replacement industrial activities had not established at that point. Page | 38

Figure 4.14: Mill Road Employment by Industry Type, 2000-2017

140 100%

90% 120 80%

100 70%

60% 80

50% MECs 60

40% % % LocalArea MECs

40 30%

20% 20 10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

Since the Mill vacated the site, the Mill Road area has redeveloped, and the average business size has increased. This indicates that the location is attractive to larger sized businesses, however one existing constraint is the capacity of the wastewater and stormwater infrastructure for large businesses.

Figure 4.15: Mill Road Business Count by Industry Type, 2000-2017

8 100%

90% 7

80% 6 70%

5 60%

4 50% GEOs 40%

3 % % LocalArea GEOs 30% 2 20%

1 10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

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Figure 4.16: Mill Road Average Business Size by Industry Type, 2000-2017

Mill Road Average Business Size 120

100

40 Avg Avg Bus Size (MECs)

- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other

Land Supply at Mill Road

While there has been an increased uptake of land at the Mill Road location, a large share of the available land remains vacant, or under-utilised as rural activities with the associated residential housing. The GHD report estimated that existing industrial activity and a building that was under construction occupied about 10ha of the zone. Our assessment estimates that there is 99.4 ha vacant land, which equates to approximately 94% (Figure 4.17). This is evident from the site visit we conducted in January 2019, and from aerial photographs (Figure 4.18).

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Figure 4.17: Mill Road Assessment of Industrial Land Supply

Figure 4.18: Mill Road Aerial Photo, January 2019

Factors Influencing Land Use at Mill Road

The following key factors may affect the utilisation of the zoned area at Mill Road:

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• The GHD report highlighted that the location is on the outskirts of the urban area and is largely rural in nature. Our assessment has shown that despite these characteristics, the area has seen a reasonable level of growth and financial investment in recent times.

• The relatively greenfield nature of the location will be attractive to businesses that wish to construct new buildings. The lower costs associated with building on new land, as opposed to demolishing existing buildings and/or retro-fitting buildings will be a strong drawcard for development.

• The location on the outskirts of the urban area also has the added drawcard for industries that are considered more likely to create reverse sensitivity issues, either from noise, odour, dust or long hours of operation.

• However, there are a number of planning constraints that will impact on the ability for additional business activity to locate at Mill Road;

o including capacity issues with the stormwater and wastewater pumping stations on the west of the river, which are under significant pressure, and large users of water for processing and production may need to financially contribute to solutions for handling bigger volumes of water. GHD identified that a large portion of the zone currently remains unserviced by infrastructure and that will be a significant cost that will need to be picked up by the land developer and businesses seeking to locate there.

o The Tregenna Pump Station requires upgrading to cope with current wastewater flows, and would also need additional capacity to cater for further growth at Mill Road29.

o The Mill Road Structure Plan identifies that poor drainage and potentially high groundwater levels can contribute to ponding of surface water and additional development in the area, and the associated impermeable surfaces, could generate flooding concerns downstream.

o Other geotechnical issues may also include the potential for slope instability, ground settlement, liquefaction and volume reduction.

o Approximately 19ha of the land at Mill Road is council owned30, which presents opportunities for council led investment and development.

o Increased capacity will need to be provided for water supply, which is currently sufficient to meet peak demand, but has insufficient capacity to provide adequate fire protection requirements31.

o The Mill Road Structure Plan provides a timeline required for upgrading the infrastructure by stage to ensure that the costs can be undertaken in line with

29 GHD, 2018. Mill Road Structure Plan. 30 GHD, 2018. Mill Road Structure Plan. 31 GHD, 2018. Mill Road Structure Plan. Page | 42

development and within council’s budget, with $6 million devoted to infrastructure provision in the short to medium term.

4.3.3 Aramoho

Existing Business Activity

Aramoho is the third largest manufacturing zoned area in Whanganui with approximately 62ha net area. It is located to the north of the CBD on the western side of the Whanganui River, straddling the rail line that connects Whanganui to Marton in the east and New Plymouth in the west. GHD described the area as having a mixed character including heavy industry, and small industrial land uses scattered amongst residential uses. In 2017, there were 29 businesses employing 220 people. Approximately 71% of the employment in the area is in the industrial sector (155 MECs), making it the fourth largest industrial employment location of the manufacturing zones.

Nine of the seventeen industry sectors in the area (Figure 4.19) were industrial activities in 2017, with the top three employers being:

• Other fabricated metal product manufacturing n.e.c, one business of 60 MECs,

• Retail trade, five stores employing 34 MECs

• Plaster product manufacturing, one business of 21 MECs.

Figure 4.19: Aramoho Industries Ranked by Employment, 2017

Ave. Broad Industry Industry Sector MECs Geos Business Size Industrial Other fabricated metal product manufacturing n.e.c. 60 1 60 Other Retail Trade 34 5 8 Industrial Plaster product manufacturing 21 1 21 Industrial Other machinery and equipment manufacturing n.e.c. 19 1 19 Industrial Plumbing services 17 3 6 Other Personal and other services 15 4 4 Industrial Prepared animal and bird feed manufacturing 13 1 13 Industrial House construction 13 2 7 Industrial Other heavy and civil engineering construction 9 1 9 Other Agriculture, forestry and fishing support services 6 1 6 Other Education and training 3 1 3 Other Professional, scientific, technical, administrative and support services 3 2 2 Industrial Taxi and other road transport 2 2 1 Industrial Cut and sewn textile product manufacturing 1 1 1 Other Other goods and equipment rental and hiring n.e.c. 1 1 1 Other Arts and recreation services 1 1 1 Other Non-residential property operators 0 2 0 Total 218 29 7

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Overall the average size of industrial businesses was 12.6 MECs, with the average size of the other non- industrial businesses being 3.8 MECs. The average business size for all businesses in Aramoho was 7.5 MECs, which is smaller than the average size of all businesses in the Mill Road location.

Key companies in the area include:

• Ravensdown; this factory is located to the north western end of the existing utilised area of Aramoho. Ravensdown typically specialises in fertilisers, agrochemicals, animal health, lime and seed products.

• Axiam Metals, 50 Kelvin Street, is an engineering company that manufactures complex plastic and metal components for domestic and international clients. Their key activities are aluminium die casting, shell and sand casting, plastic injection moulding, foam moulding, and tool making.

• Seale Winslow, produces high-performance compound feeds and feed additives for farmers in the domestic market. It recently redeveloped the existing Inghams feedmill and grain storage complex with modern milling equipment in time for the 2013/14 dairy season.

• Larsens Concrete and Drainage Wanganui, 18 Murray Street, produce precast water tanks, troughs, septic tanks, as well as other commonly used farm and home concrete products. It has been in operation for over 85 years.

• Easi-Stor Self Storage, Kaikokopu Road, provides off-site storage solutions for businesses and residences.

Business Activity Trends

Employment for both industrial activities, and in total has decreased over time in the Aramoho area. Its peak was in 2003, when there were 225 industrial jobs and 89 other jobs, this represents a decline of - 30.5%. The average size of industrial activities was 12.6 MECs in 2017, while the average size of other businesses was 3.8 MECs.

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Figure 4.20: Aramoho Employment by Industry Type, 2000-2017

250 100%

90%

200 80%

70%

150 60%

50% MECs

100 40% % % LocalArea MECs 30%

50 20%

10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

Figure 4.21: Aramoho Business Count by Industry Type, 2000-2017

30 100%

90% 25 80%

70% 20 60%

15 50% GEOs 40%

10 % LocalArea GEOs 30%

20% 5 10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

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Figure 4.22: Aramoho Average Business Size by Industry Type, 2000-2017

Avg Avg Bus Size (MECs) 6

- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other

Land Supply at Aramoho

The GHD report estimated that 60% of the land in Aramoho is vacant, underutilised or are characterised by the presence of vacant buildings. Of the land that was identified as vacant, the majority of that land was currently being used for rural activities. Our estimates are that there is 31.2 ha vacant land currently, which equates to 50% of total zoned area (Figure 4.23). Some of the rural land would require significant land works to make it of a nature that would be suitable for industrial activity to locate there, the aerial photos (Figure 4.24) show the undulating nature of the hills, and for this reason we have deemed that approximately 17.0 ha is unsuitable for industrial development. We have also been informed that there are other portions of land that have been contaminated by prior uses, and that land remediation costs would be substantial, and for this reason, those areas have also been classified as unsuitable for this assessment.

Factors Influencing Land Use at Aramoho

The following key factors may affect the utilisation of the zoned area at Aramoho:

• The GHD report identified that the hilly topography is a constraint on development on some of the land and we agree with this position and have classified some of that area as being unsuitable for development. Our recommendation would be for that area to be removed from the manufacturing zone and be classified for rural activities.

• Like elsewhere, the stormwater and wastewater capacity issues which affect the pumping stations to the west of the river apply and will affect the ability for larger activities to establish in the zone, which is likely to come in the form of development contributions for upgrades to the network.

• As mentioned, there are land contamination issues which have been generated by activities that were previously established in the zone. For this reason we have

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classified any such areas that would require significant remediation as unsuitable for future development.

Figure 4.23: Aramoho Land Supply Assessment

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Figure 4.24: Aramoho Aerial Photo, January 2019

4.3.4 Heads Road East

Existing Business Activity

Heads Road East is the fourth largest manufacturing zoned area in land area terms, and with approximately 22.7ha net area is medium in size. In 2017, it was the second largest manufacturing area in terms of the number of businesses (70 geos) and employment (560 MECs). Approximately 56% of the employment in the area is in the industrial sector (320 MECs), with retail trade, accommodation, and personal services (220 MECs) playing a strong supporting role.

Figure 4.25 shows that the top five industrial activities were:

• Car wholesaling, 43 MECs in one business

• Medical and surgical equipment manufacturing, 40 MECs in one business

• Road freight transport, 36 MECs in one business

• Other structural metal product manufacturing, 30 MECs in one business.

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Other non-industrial activities that are significant in the area are: retail trade (118 MECs in 5 businesses), accommodation and food services (75 MECs in 4 businesses), and personal and other services (31 MECs in 6 businesses).

Figure 4.25: Heads Road East Largest Industries Ranked by Employment, 201732

Overall the average size of industrial businesses was 9.0 MECs in Heads Road East, with the average size of the other non-industrial businesses being 7.0 MECs. Overall, the size of businesses in the zoned area is much smaller than for other locations in Whanganui, especially in comparison to Heads Road West, and Mill Road.

Key companies in the area include:

• Pitzac Wood Enterprises, 239 Taupo Quay, processes timber for fencing for rural activities.

• AMF Boats, 234 Taupo Quay, manufactures powerboats for the domestic and international markets, and has been established for over ten years.

• Citi-Box Containers, 151 Taupo Quay, provides storage solutions with a wide range of shipping containers and Off Shore Containers.

• B. Bullock Ltd, 219 Taupo Quay, is a contracting, earthworks, road construction, drainage, timber processing, treated fencing products, aggregate production, ready mix concrete and land development company that has been established since 1928. The company currently employs approximately50 people.

32 For a full breakdown of employment and business activity occurring in Heads Roads East see the Appendix Figure 0.2 Page | 49

• Mitre10 Mega, 200 Taupo Quay, is a home improvements and DIY retailer.

• CRV Equipment Ltd, 5 Pacific Place, is a heavy machinery and diesel specialist. (anything more?)

• Steam & Machinery Ltd, 7 Pacific Place, specialises in new and reconditioned boilers, burners and steam surveys

• Skyline Buildings Wanganui, 20 Pacific Place, construct garages, gottages, garden sheds, carports, sleepouts, commercial buildings, baches, holiday homes, cribs, accommodation, storage solutions and offices.

• Nu-look Windows & Doors, 4 Pacific Place, has been established in Wanganui for over 30 years and supplies windows and doors.

• Allied Concrete, 18 Liffiton Street, is a concrete plant.

• Farmlands, 49 Heads Road, is a farm owner co-operative which undertakes a range of rural services and provides access to farming supplies.

• Hooker Pacific, 4 Head Road, are a transport freight company that specialise in transporting home and office goods.

Business Activity Trends

The Heads Road East area has historically been dominated by industrial activity, however in recent times from 2008 onwards, the mix of activity has moved away from being so reliant on industrial activity (Figure 4.26). In 2017, approximately 56% of total employment was in the industrial sectors, in comparison to the peak of 79% in 2005.

The average business size for industrial companies has been relatively stable between 8 to 10 MECs since 2000 (Figure 4.28). The average business size of other industries located there has increased over time from 2 to 3 at the beginning of the period to 6 to 7 MECs towards the end.

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Figure 4.26: Heads Road East Employment by Industry Type, 2000-2017

450 100%

400 90%

80% 350

70% 300 60% 250 50% MECs 200 40%

150 % LocalArea MECs 30%

100 20%

50 10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

Figure 4.27: Heads Road East Business Count by Industry Type, 2000-2017

60 100%

90% 50 80%

70% 40 60%

30 50% GEOs

40%

20 % LocalArea GEOs 30%

20% 10 10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

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Figure 4.28: Heads Road East Average Business Size by Industry Type, 2000-2017

Avg Avg Bus Size (MECs) 4

- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other

Land Supply at Heads Road East

Our assessment of vacant potential and underutilised land estimates that there is approximately 8.3 ha vacant potential in the area (37%), this includes one large site of 1.05ha (6%) that is currently for lease but with established buildings (Figure 4.29). This compares with the GHD assessment which estimated that less than 1% of the area was vacant, but also highlighted that a number of sites were underutilised. In GHD’s opinion the western part of Heads Road East was underutilised, with some vacancies, residential and the Downer depot.

Factors Influencing Land Use at Heads Road East

The Heads Road East location is a highly sought-after location, with a wide range of activities occupying the area. The diversity of economic activity can be both a strength and a weakness. Reverse sensitivity issues are likely to arise with different activities co-locating together. However, the popularity of the area for different industry types is likely to ensure that the area is well utilised in the future. Parts of Heads Road East are susceptible to flooding in 50 year and 100 year events33, and this will affect the ability of businesses to conduct their operations when the river is significantly flooded, as well as clean up and insurance costs.

33 WDC Strategy and Development Environmental Policy, November 2008. Draft Wanganui Growth Strategy, 2008-2038, p21. Page | 52

Figure 4.29: Heads Road East Assessment of Industrial Land Supply

4.3.5 Eastown

Existing Business Activity

Eastown is a medium manufacturing zoned area with approximately 11.6ha net area. It is located to the north of the CBD on the eastern side of the Whanganui River, and is adjacent to the railway. In 2017, there were 14 businesses providing 124 jobs (Figure 4.30). Approximately 33% of the employment in the area is in the industrial sector (42 MECs). This reflects the diverse mix of activities and relatively large underutilised or less efficiently used parcels observed in the manufacturing zone on our site visit.

Four of the nine industry sectors in the area were industrial activities in 2017, with the top two employers being:

• Log sawmilling, one business of 20 MECs,

• Natural rubber product manufacturing, one business of 19 MECs.

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Figure 4.30: Eastown Industries Ranked by Employment, 2017

Ave. Broad Industry Industry Sector MECs Geos Business Size Other Health care and social assistance 51 4 13 Other Accommodation and food services 22 1 22 Industrial Log sawmilling 20 1 20 Industrial Natural rubber product manufacturing 19 1 19 Other Retail Trade 6 1 6 Industrial Non-residential building construction 3 3 1 Other Professional, scientific, technical, administrative and support services 3 1 3 Other Non-residential property operators 0 1 0 Industrial Land development and subdivision 0 1 0 Total 124 14 9

Overall the average size of industrial businesses was 6.9 MECs, with the average size of the other non- industrial businesses being 10.3 MECs. The average business size for all businesses in London Street was 8.9 MECs. Key companies in the area included Burgess Matting and Surfacing which has a large warehouse on Poutini Street, Scrap Metal Recyclers Wanganui, which takes up a large space for recycling old cars, and the sawmill and storage area adjacent to the railway line which inaccessible from the street on our site visit.

Business Activity Trends

Historically, the area has been dominated by other activities, both in terms of business counts and employment, with industrial activity accounting for between 30% and 40% of total activity.

In 2017, the average business size of industrial companies was the lowest over the period from 2000, at 6.9 jobs. From 2000 onwards the average business size of industrial firms has fluctuated between 7 to 17 MECs, while in non-industrial companies that size has been much lower at around 8 to 14 MECs per business.

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Figure 4.31: Eastown Employment by Industry Type, 2000-2017

120 100%

90% 100 80%

70% 80 60%

60 50% MECs

40%

40 % LocalArea MECs 30%

20% 20 10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

Figure 4.32: Eastown Business Count by Industry Type, 2000-2017

14 100%

90% 12 80%

10 70%

60% 8

50% GEOs 6

40% % % LocalArea GEOs

4 30%

20% 2 10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

Land Supply at Eastown

There are a range of activities occurring in Eastown which occupy large parcels of land, but do not use them fully for productive use. For example the old cars at the metal scrapyard occupy a significant piece of land, that could otherwise be built on and used more productively (Figure 4.34). The GHD report identified that the eastern portion of vacant railway land is 5ha, and estimated that approximately 50% of the area was occupied by buildings. Our assessment of vacant potential land identifies approximately 6.4ha, or 55% (Figure 4.33).

The key tension is deciding whether encouraging that land use to move to another location will result in the most efficient outcome from a land use planning point of view, as the metal scrapyard will still need to

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locate somewhere else in the district. Section five provides more commentary on these types of considerations.

Figure 4.33: Eastown Assessment of Industrial Land Supply

Factors Influencing Land Use at Eastown

The following key factors may affect the utilisation of the zoned area at Eastown:

• There are a few existing large scale businesses that operate in the area that would be difficult to relocate to other locations. The milling operation would be reliant on access to the railway, and the as mentioned earlier the scrapyard would still need to locate within the district, but at another location.

• In terms of vacant land or vacant potential land, there are only two large parcels which are greater than 7,500m² that would need to be redeveloped to allow fore more intensive activity on the site.

• The site is adjacent to the railway, and would appeal to industries that transport goods by rail.

• There is a reasonable sized retirement home backing onto the manufacturing zone, and other residential activity adjacent to the manufacturing zone, so reverse sensitivity issues would need to be well managed.

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Figure 4.34: Eastown Aerial Photo, January 2019

4.3.6 London Street

Existing Business Activity

London Street is a small manufacturing zoned area in Whanganui with approximately 4.7ha net area. It is located to the north of the CBD on the western side of the Whanganui River, and relates to a number of small parcels which are located along an approximately 1km stretch of London Street that leads into Aramoho. In 2017, there were 47 businesses employing 323 people. Approximately 59% of the employment in the area is in the industrial sector (192 MECs), making it the third largest industrial employment location of the manufacturing zones.

Fourteen of the nineteen industry sectors in the area in 2017 (Figure 4.35) were industrial activities, with the top four employers being:

• Rigid and semi-rigid polymer product manufacturing, one business of 80 MECs,

• Wooden structural fitting and component manufacturing, one business employing 50 MECs,

• Wooden furniture and upholstered seat manufacturing, 20 MECs in one business,

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• Other furniture manufacturing, one business of 14 MECs.

Figure 4.35: London Street Industries Ranked by Employment, 2017

Ave. Broad Industry Industry Sector MECs Geos Business Size Industrial Rigid and semi-rigid polymer product manufacturing 81 1 63 Industrial Wooden structural fitting and component manufacturing 51 1 51 Other Retail Trade 39 6 6 Other Health care and social assistance 27 3 9 Other Education and training 24 1 24 Industrial Wooden furniture and upholstered seat manufacturing 20 1 20 Other Accommodation and food services 18 4 5 Industrial Other furniture manufacturing 14 1 14 Other Personal and other services 13 7 2 Other Professional, scientific, technical, administrative and support services 8 3 3 Industrial Other grocery wholesaling 8 1 8 Industrial Motor vehicle dismantling and used parts wholesaling 6 1 6 Other Non-residential property operators 2 7 0 Industrial Electrical services 2 1 2 Industrial Road freight transport 2 1 2 Industrial House construction 2 1 2 Industrial Plumbing services 2 1 2 Industrial Postal services 2 1 2 Industrial Other building installation services 1 1 1 Industrial Other goods wholesaling n.e.c. 1 1 1 Industrial Iron smelting and steel manufacturing 1 1 1 Other Finance 0 3 0 Total 323 47 7

Overall the average size of industrial businesses was 13.4 MECs, with the average size of the other non- industrial businesses being 4.0 MECs. The average business size for all businesses in London Street was 6.9 MECs.

Key companies in the area include:

• Axiam Plastics is an engineering company that manufactures complex plastic and metal components for domestic and international clients. Their key activities are aluminium die casting, shell and sand casting, plastic injection moulding, foam moulding, and tool making.

• Wanganui Enterprises Inc is a charitable trust that provides rehabilitation, training and employment for people living with disabilities. It specialises in woodwork and light engineering and has a show room and training facilities.

• Sorensen Furniture Company is a manufacturer of solid timber furniture that has been established for 30 years.

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Business Activity Trends

Industrial employment has declined since the peak in 2005 of 206 MECs, however since 2014, there has been a resurgence of activity with a total of 192 MECs engaged in industrial activities in 2017 (Figure 4.36). The area has a broad mix of activity with industrial accounting for 59% and the remainder in other activities (41%) in 2017. The mix has varied over time, with 70% industrial in 2005 for example, but over recent times has tended to be roughly the same mix as 2017 (Figure 4.25).

In 2017, the average business size of industrial companies was the highest over the period from 2005, at 13.4 jobs. From 2000 onwards the average business size of industrial firms has fluctuated between 8 to 15 MECs, while in non-industrial companies that size has been much lower at around 5 to 7 MECs per business.

Figure 4.36: London Street Employment by Industry Type, 2000-2017

250 100%

90%

200 80%

70%

150 60%

50% MECs

100 40% % % LocalArea MECs 30%

50 20%

10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

Figure 4.37: London Street Business Count by Industry Type, 2000-2017

45 100%

40 90%

80% 35

70% 30 60% 25 50% GEOs 20 40%

15 % LocalArea GEOs 30%

10 20%

5 10%

- 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Industrial Other Industrial %

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Land Supply at London Street

London Street is mainly occupied, with the exception of two parcels, one triangular piece of land that is truly vacant, and another which is occupied, but appears to be underutilised (Figure 4.38). Our estimate is that approximately 0.5ha is vacant or vacant potential, equating to approximately 10% of the zone.

Figure 4.38: London Street Assessment of Industrial Land Supply

Factors Influencing Land Use at London Street

The following key factors may affect the utilisation of the zoned area at London Street:

• London Street is nearly fully occupied, and that indicates that it is popular with businesses as a location.

• The co-location of industrial activity with residential and schools may present some reverse sensitivity issues that will need to be well managed by Council.

4.3.7 Putiki

Existing Business Activity

Putiki is a small manufacturing location with 1.2 ha net area applying to a triangular pocket at the junction of State Highways 3 and 4. In 2017, there were 6 businesses employing 24 people (Figure 4.38). Less than

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half of the employment (40%) in the area was in the industrial sector (10 MECs), with other industry sectors making up 15 jobs in education and training, professional, scientific, technical administrative and support services, and sheep, beef cattle and grain farming.

Two companies were visible from the road on a site visit:

• Palamountains, was established in 2001 and is aligned with vitaPower Ltd. Together the companies provide products that improve the health and vitality of animals. Palamountains’ key activities are; research services, marketing, veterinary, animal and biomedical sciences and animal health services for horses, cats, dogs, birds, bees, deer, cows, sheep and goats.

• Auto stripes, which is a car graphics company.

Figure 4.39: Putiki Industries Ranked by Employment, 2017

Ave. Broad Industry Industry Sector MECs Geos Business Size Other Education and training 11 1 11 Industrial Veterinary pharmaceutical and medicinal product manufacturing 10 1 10 Other Professional, scientific, technical, administrative and support services 2 2 2 Other Sheep, beef cattle and grain farming 2 2 1 Total 24 6 4

Business Activity Trends

Putiki has historically had less than 0.6% of the district’s industrial employment, with the share dropping to below 0.3% from 2004 onwards. The share of other sectoral employment located in Putiki reached a high of 0.8% in 2007 with 33 MECs, but has dropped down to approximately 0.3% in 2017.

In 2017, the average business size for industrial companies was 9.6 jobs, which has declined from the peak of 18.5 MECs in 2000. The average business size of other industries has been less than 7 MECs since 2000.

Land Supply at Putiki

It was difficult to assess the land use occupancy of the three parcels at Putiki, due to tree cover along the borders of the property. Aerial images show that there are significant parcels of land that appear to be underutilised, and we estimate that this applies to approximately 0.7 ha (46%) (Figure 4.40). This compares with the GHD report which estimated that 50% of the zoned land was vacant, and the remaining site was not well utilised. The ratings database classifies two of the three sites as residential, though there are a number buildings clustered together on both sites. Without inspecting the site on foot, it would appear that two of the sites are being mainly used for residential purposes rather than for business activity. For this reason we have assumed that 0.7ha of the total area is occupied by industry at present.

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Figure 4.40: Putiki Assessment of Industrial Land Supply

Factors Influencing Land Use at Putiki

The following key factors may affect the utilisation of the zoned area at Putiki:

• The site is well located adjacent to the junction of both State Highways 3 and 4, and is currently serviced for water and wastewater infrastructure. It is on the rural urban boundary and is therefore well suited to a range of activities.

• The land is not subject to flooding, which makes it a good option for establishing enterprises that will not be interrupted in extreme weather events.

• However, the site is small, and would only accommodate small to medium sized enterprises, when the rural land becomes unlocked for development.

4.3.8 Marangai Manufacturing and Rural Amenity

The Marangai Manufacturing and Rural Amenity zone is a unique zone that was applied to some rural zoned land nearly 10km to the east of Whanganui with the specific purpose of establishing a sole petcare products manufacturing facility when Mars was considering moving from their current location. The landowner went to significant effort to provide an Assessment of Effects to petition the Council to re-zone the site to allow industrial activity to be permitted there. Although the initiative was successful, the land remains undeveloped and unserviced by wastewater, stormwater and potable water and roading infrastructure. An

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advantage of the site is its proximity to SH 3 which is an important consideration for industrial activities that are reliant on road network connections. It is currently being used for cattle grazing, and while ownership has recently changed, the new owners appear to have no immediate plans to try to attract industrial businesses to locate there (Figure 4.41).

The business directory has the following key business activities recorded for the zone in 2017:

• Sheep, beef cattle and grain farming, two businesses with two employees;

• Professional, scientific, technical, administrative and support services, one business with one MEC;

• Health care and social assistance, one business with one MEC;

• Forestry and logging, one business with one part-time employee, and

• Non-residential property operators, one business with one part-time employee.

Figure 4.41: Marangai Aerial Photo, January 2019

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Factors Influencing Land Use at Marangai

Currently the land is not serviced by key infrastructure, and this would add significant cost to making the land easily occupied. It is likely that a significant portion of the set up costs would fall to the land developer or any organisation choosing to develop at the site. Due to its distance from urban Whanganui, it is not perceived to be very attractive to the market. However, there are some key advantages of the location being in a rural zoned area, and there is the potential to accommodate more odorous or noise sensitive activities.

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5 Industrial Supply Recommendations

Whanganui District has significant areas of vacant and vacant potential land located in the manufacturing zone that is more than sufficient to cater for future demand growth from the industrial sectors. In addition, there is space within the Outer Commercial Zone and at Marangai to provide additional choice. The key constraint for significant parts of the vacant and vacant potential land is the ability for them to be serviced by infrastructure, in particular by stormwater and wastewater systems which require upgrades to improve their ability to handle higher usage volumes.

5.1 Future Industrial Land Requirements

The economic projections derived from the EFM were translated into industrial land requirements (ha) in section 3.3 of this report. This analysis showed that the minimum land area required in the short to medium term (to 2028) would be an additional 9.2ha to serve employment growth (Medium growth – low intensity), up to a maximum of a further 20.7ha (high/high with NPS buffer) (Figure 5.1).

In the long term, Whanganui would require additional industrial land of between 21.3 ha (medium/low with NPS buffer) and 44.5ha (high growth (high intensity).

Figure 5.1: Whanganui Industrial Land Demand 2018 to 2048 (Ha)

Total Industrial Total Industrial Land Demand (Ha) Industrial Land Demand (Ha) Land Growth 2018 2028 2038 2048 Requirements (Ha) Medium growth (low intensity) 94.5 103.6 110.4 117.1 22.6 Medium growth (high intensity) 160.6 176.2 187.7 199.1 38.5 Medium/low with NPS buffer 113.4 124.4 126.9 134.7 21.3 Medium/high with NPS buffer 192.7 211.4 215.8 229.0 36.2 High growth (low intensity) 95.0 105.1 113.3 121.1 26.2 High growth (high intensity) 161.4 178.7 192.6 205.9 44.5 High/low with NPS buffer 114.0 126.1 130.3 139.3 25.4 High/high with NPS buffer 193.7 214.4 221.5 236.8 43.1

The existing manufacturing zoned land supply situation is described in Figure 5.2 and its location is shown in Figure 5.3. It shows that according to our assessment, of the 322.3ha total net land area currently zoned that approximately 123.4ha is occupied. We estimate that approximately 37.7 ha of land that is currently zoned for manufacturing activity is unsuitable for development due to topography constraints and land contamination. This means that there is a total level of vacancy in the manufacturing zones of 161.1ha. This estimate is broadly equivalent to the 150ha estimated to be available in the GHD report. It should be noted that for some of that land, there are already existing businesses or other uses occupying parts of those areas, and encouraging individual owners to subdivide their properties or rent underutilised areas to other businesses may be difficult.

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Figure 5.2: Whanganui Industrial Land Supply, 2019

Vacant or Net Zoned Occupied Unsuitable Vacant Location Area (Ha) (Ha) Land (Ha) Potential (Ha) (Available) Industrial Land Supply Heads Road West 114.4 78.9 20.7 14.8 Mill Road 105.7 6.4 - 99.4 Aramoho 61.9 13.7 17.0 31.2 Heads Road East 22.7 14.4 - 8.3 Eastown 11.6 5.2 - 6.4 London Street 4.7 4.2 - 0.5 Putiki 1.2 0.7 - 0.6 Total Manufacturing Zone 322.3 123.4 37.7 161.1 Marangai Manufacturing and Rural Amenity 154.3

The majority of the vacant or vacant potential land is located at Mill Road (99.4 ha), with other significant areas in Aramoho (31.2 ha) and Heads Road West (14.8 ha). There are smaller quantities of vacant land in Heads Road East, (8.3 ha) and Eastown (6.4 ha).

Figure 5.3: Whanganui Manufacturing Zoned Land Supply by Use, 2019

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There is a good mix of site sizes available in the existing manufacturing zone, with approximately one third of parcels in each of the small, medium, and large categories (Figure 5.4). Heads Road West and Mill Road have the most choice in terms of parcel size.

Figure 5.4: Whanganui Vacant or Vacant Potential Manufacturing Zone Sites by Location, 2019

Small Large Location Medium Total <2,000m² >7,500m² Industrial Land Supply Heads Road West 23 17 6 46 Mill Road 5 4 11 20 Aramoho 2 1 12 15 Heads Road East 4 2 3 9 Eastown - - 2 2 London Street 1 1 - 2 Putiki - 2 - 2 Total Manufacturing Zone 35 27 34 96

If the net additional land required is subtracted from the net available land, then Whanganui will have somewhere between 117 ha and 140 ha surplus land until 2048 under the medium growth scenario. This means that in total there is sufficient zoned vacant land to cater for growth until at least 2048. There is also a wide range of choice in terms of site size and location.

Because there is already some existing activity occurring on the vacant potential land, to test the sensitivity of our analysis, we have modelled an assumption of allowing for only 50% of land identified as vacant or vacant potential to be available in each of the zones, with the exception of Mill Road, which we have applied a 75% ratio to. This assessment shows under these assumptions there would be a surplus of manufacturing zoned land in the order of 61 ha to 84 ha by 2048. This shows that there is more than enough land currently zoned for industrial activities, even after some of the land which is unsuitable for development is excluded. Another way to look at the issue is that all the growth could be developed at Mill Road if it was serviced appropriately, and there would still be land available for other unanticipated growth opportunities in that location.

In addition to the manufacturing zoned land, industrial activities can also locate in the Outer Commercial Zone, and the Marangai Manufacturing and Rural Amenity Zone would also be available to cater for large and unique activities wanting to establish in the district, provided that servicing constraints were able to be overcome through affordable and attractive methods.

It is difficult to predict where future industrial activity might establish, and to a large degree that is a function of opportunity, and so new economic activity will be likely to go in appropriate zones that can accommodate the activity (both in a policy sense and with reference to site characteristics). There are a range of options for extra industrial activity stimulus in the district, including the redevelopment of the port area, and the possibility of attracting key companies into the district due to skilled, low-value workforces and relatively affordable housing options.

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5.2 Planning Considerations

The draft National Planning Standards have established a national zoning framework in an attempt to ultimately achieve consistent zoning between councils. Relevant to this assessment, those standards propose zones similar to those adopted in the Auckland Unitary Plan, where there is distinction made between Light and Heavy Industry. That distinction may be appropriate to apply in Whanganui.

The purpose of the Light vs Heavy distinction is to allow industrial activities34 to locate in either zone, but to otherwise differentiate the two zones for the other activities that might establish there:

• The Light Industry zone (“LIZ”) provides for a much broader range of other activities, with a number of non-industrial activities having either permitted, discretionary or restricted discretionary status, including commercial services, drive through restaurants, entertainment facilities, garden centres, vehicle sales, marine retail, show homes, trade suppliers, recreation facilities, wholesalers and horticulture (among others).

• The Heavy Industry zone (“HIZ”) applies much more restrictive activity statuses to most activities, making most of those listed in the LIZ bullet point either non-complying or prohibited. The intent of that is to create a more “pure” industrial zone where activities producing objectionable emissions (odour, dust or noise) can operate without concern about reverse sensitivity effects. Another key attribute of the HIZ is that it contains sites large enough to accommodate large-scale industrial activities, but otherwise the HIZ is no more permissive for industrial activities than the LIZ is.

While the port location is currently characterised by activities that would fit into the heavy industry classification, if the activities that are intended for the redevelopment of the port area, as investigated with the funds from the Provincial Growth Fund, there will be a mixture of commercial, light industry and heavy industry located there. We would recommend that due to the combination of activities in the specific location that a spot zone would be appropriate for the port area.

The operative Plan provides for only one Manufacturing zone, although industrial activity is also permitted in the Outer Commercial zone as well.

In our opinion, the Light Industry Zones would be appropriate to be applied to the following locations:

• Outer Commercial Zone, which has a mix of large format and trade retail currently (for example Mitre 10 Mega).

• Heads Road East which is a well occupied area with limited vacant space available and a range of activities occurring there.

• Putiki would also be appropriate due to the limited nature and mix of activities currently.

34 defined as “the manufacturing, assembly, packaging or storage of products or the processing of raw materials and other accessory activities” Page | 68

• London Street is a manufacturing hub with a specific focus on wooden furniture and other wooden products manufacturing, and very little heavy industrial activity.

The zones which should have a Heavy Industry zoning applied are:

• Heads Road West which is home to some large manufacturing companies that have had a long tradition of being based in Whanganui and are manufacturing activities or transport and construction based requiring large sites for storing equipment and materials.

• Mill Road currently has businesses established there that are similar to those located in Heads Road West, however due to its greenfield characteristics, the area could easily accommodate a mixture of both light and heavy industrial activity.

• Aramoho also has a significant concentration of businesses that would typically be described as heavy industry. Due to its location on the periphery of the urban area, and with the majority of suitable vacant land being located adjacent to the rural area, it would be a suitable location for activities which are likely to create reverse sensitivity issues.

• Eastown has a mixture of activities which are generally large scale and more suited to heavy industry activities that are reliant on access to the railway line. The key consideration will be the location adjacent to residential uses which is likely to create reverse sensitivity issues even though the sites have been historically used for these types of activities. Currently a large portion of the site is underutilised and further development of the area may start to generate additional reverse sensitivity issues.

5.2.1 Infrastructure Issues

The main obstacle to utilising some of the vacant and vacant potential land throughout the district relates to the lack of current servicing of areas, and the constraints present in the water and wastewater network in particular, which is under significant pressure from further loads on capacity, especially at pumping stations on the western side of the river and at times of extreme rain events.

In addition some areas, for example Mill Road, require significant work to provide infrastructure that is sufficient to enable development of areas. The cost of providing such infrastructure is likely to fall to land developers or businesses wishing to locate there, and those costs will influence the desirability of the area. These are the most significant issues that would need to be overcome to ensure that sufficient land and choice is available to industrial businesses seeking to establish in those locations in the future.

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Appendix

Figure 0.1: Heads Road West Total Business Activity, 2017

Ave. Broad Industry Industry Sector MECs Geos Business Size Industrial Meat processing 880 2 440 Industrial Road freight transport 448 4 104 Industrial Leather tanning, fur dressing and leather product manufacturing 273 2 137 Industrial Prepared animal and bird feed manufacturing 153 2 76 Industrial Road and bridge construction 118 3 45 Industrial Natural textile manufacturing 83 1 83 Industrial Other warehousing and storage services 82 2 51 Other Health care and social assistance 67 2 34 Industrial Other furniture manufacturing 67 1 67 Other Retail Trade 58 9 6 Industrial Clothing manufacturing 57 1 57 Industrial Non-residential building construction 49 2 23 Industrial Other machinery and equipment manufacturing n.e.c. 45 6 8 Other Education and training 44 3 15 Industrial Pharmaceutical and toiletry goods wholesaling 43 1 43 Other Professional, scientific, technical, administrative and support services 41 12 3 Industrial Boatbuilding and repair services 39 2 24 Other Forestry and logging 38 3 11 Industrial Other fabricated metal product manufacturing n.e.c. 37 5 7 Other Personal and other services 37 8 5 Industrial Milk and cream processing 30 1 30 Industrial Other motor vehicle parts manufacturing 27 1 27 Industrial Concrete product manufacturing 25 1 25 Other Accommodation and food services 24 6 4 Industrial Motor vehicle new parts wholesaling 22 2 11 Other Central government administration, defence and public safety 19 4 5 Industrial Agricultural and construction machinery wholesaling 18 1 17 Industrial Metal furniture manufacturing 18 1 18 Industrial Other construction services n.e.c. 15 2 7 Industrial Pesticide manufacturing 15 1 13 Industrial Paper product wholesaling 14 1 14 Industrial Metal and mineral wholesaling 13 5 3 Industrial Other specialised industrial machinery and equipment wholesaling 13 2 6 Industrial Waste treatment and disposal services 13 1 13 Industrial Other heavy and civil engineering construction 12 1 12 Industrial Metal roof and guttering manufacturing (except aluminium) 11 1 9 Industrial House construction 11 2 5 Industrial Site preparation services 10 2 6 Industrial Architectural aluminium product manufacturing 9 1 9 Industrial Hire of construction machinery with operator 9 3 3 Industrial Metal coating and finishing 9 2 6 Industrial Other machinery and equipment wholesaling n.e.c. 8 1 8 Industrial Wooden structural fitting and component manufacturing 7 2 4 Industrial Rigid and semi-rigid polymer product manufacturing 6 1 6 Industrial Airport operations and other air transport support services 6 1 6 Industrial Other transport support services n.e.c. 6 1 6 Industrial Other goods wholesaling n.e.c. 6 1 6 Industrial Iron and steel casting 6 1 6 Other Dairy cattle farming 4 1 4 Other Horticulture and fruit growing 4 1 4 Industrial Other hardware goods wholesaling 3 1 3 Industrial Port and water transport terminal operations 3 1 3 Other Non-residential property operators 3 17 0 Industrial Agricultural machinery and equipment manufacturing 3 1 3 Industrial Bakery product manufacturing (non-factory based) 3 1 3 Industrial Other food product manufacturing n.e.c. 2 1 2 Industrial Other wood product manufacturing n.e.c. 2 1 2 Industrial Plastering and ceiling services 2 1 2 Other Arts and recreation services 2 2 1 Industrial Electrical services 2 1 2 Industrial Other metal container manufacturing 2 1 2 Industrial Other electrical equipment manufacturing 2 1 1 Industrial Printing 2 1 2 Industrial Other manufacturing n.e.c. 2 1 2 Industrial Log sawmilling 1 1 1 Industrial Other electrical and electronic goods wholesaling 1 1 1 Industrial Courier pick-up and delivery services 1 1 1 Other Poultry, deer and other livestock farming 1 1 1 Industrial Other polymer product manufacturing 1 1 1 Other Passenger car rental and hiring 1 2 1 Other Other goods and equipment rental and hiring n.e.c. 1 1 1 Other Finance 1 6 0 Industrial Heavy machinery and scaffolding rental and hiring 1 2 1 Industrial Land development and subdivision 1 2 0 Other Residential property operators 0 1 0 Total 3,091 170 18

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Figure 0.2: Heads Road East Total Business Activity, 2017

Ave. Broad Industry Industry Sector MECs Geos Business Size Other Retail Trade 118 5 24 Other Accommodation and food services 75 4 20 Industrial Car wholesaling 43 1 43 Industrial Medical and surgical equipment manufacturing 40 1 40 Industrial Road freight transport 36 1 36 Other Personal and other services 31 6 5 Industrial Other structural metal product manufacturing 30 1 30 Industrial Other sheet metal product manufacturing 19 1 19 Industrial Other electrical and electronic goods wholesaling 17 1 16 Industrial Architectural aluminium product manufacturing 16 1 16 Industrial Courier pick-up and delivery services 14 2 7 Industrial Waste treatment and disposal services 12 1 12 Industrial Glazing services 9 1 9 Other Central government administration, defence and public safety 9 1 9 Industrial Plumbing services 9 1 9 Industrial Other agricultural product wholesaling 9 1 9 Industrial Wool wholesaling 7 1 7 Other Professional, scientific, technical, administrative and support services 7 4 2 Industrial Air conditioning and heating services 6 1 6 Industrial Ready-mixed concrete manufacturing 6 1 6 Industrial Other specialised industrial machinery and equipment wholesaling 6 3 2 Industrial Agricultural and construction machinery wholesaling 5 1 5 Industrial Boatbuilding and repair services 5 1 4 Industrial Electrical services 5 2 3 Other Non-residential property operators 4 10 0 Industrial Clothing manufacturing 3 1 3 Industrial Other wood product manufacturing n.e.c. 3 1 3 Industrial Other machinery and equipment manufacturing n.e.c. 3 1 3 Industrial Other heavy and civil engineering construction 3 1 3 Industrial Non-residential building construction 2 1 2 Industrial Site preparation services 2 1 2 Industrial Metal and mineral wholesaling 1 1 1 Industrial Other machinery and equipment wholesaling n.e.c. 1 1 1 Industrial Boiler, tank and other heavy gauge metal container manufacturing 1 1 1 Industrial Other polymer product manufacturing 1 1 1 Industrial Other transport n.e.c. 1 1 1 Other Passenger car rental and hiring 1 1 1 Industrial Heavy machinery and scaffolding rental and hiring 1 1 1 Other Real estate services 0 2 0 Other Finance 0 2 0 Total 562 70 8

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