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Bayleys Research


ANNUAL 2007 PALMERSTON NORTH REGIONAL FOCUS

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Focused Growth for Industrial

The industrial property market in Palmerston North has experienced rapid growth in the last few years with significant increases in land values and rentals as well as firming yields. The industrial sector has been bolstered by the expansion of warehouse and distribution centres in tandem with a number of smaller industries.

Palmerston North has for some time been recognised as a significant distribution hub with distribution centres for both national and international companies such as Coca Cola Amatil, Toyota New Zealand, Progressive Enterprises and Foodstuffs. Further expansion in this sector is occurring, exemplified by the development of the 27,000m2 Ezibuy distribution centre, completed last year, and the proposed development of a new 30,000m2 lower North Island distribution centre for Foodstuffs.

Crean is the latest business to signal its interest with a new food storage and distribution centre, with an estimated development cost of just over $3 million. The completed complex will comprise a freezer, store, warehousing, an office block and five loading docks.

The rapid expansion and uptake of industrial land around Palmerston North and its boundaries in recent years has led to the Palmerston North City Council (PNCC) and Manawatu District Council (MDC) undertaking analysis into the provision of industrial land in the area. Stage one of an Industrial Land Use Planning Review Report has recently been released, with stage two of the report set to provide more in-depth research on the longer term options for industrial development. Stage three is likely to focus on the implementation of actions including plan changes either singularly or as a part of a district plan review.

The initial findings from the stage one report noted that there was currently a lack of industrial land in terms of location, size and tenure with particular reference to larger sites around 4 hectares. Currently there is a total of 538 hectares of land zoned industrial in Palmerston North with approximately 135 hectares vacant. While this represents almost a quarter of industrial land it was reported that it was frequently unavailable with a high proportion of vacant land being held by a select number of key players within the Palmerston North property market. The Manawatu District currently has 100 hectares of industrially zoned land, with just over 30 hectares vacant.

Pockets of rural land have been rezoned to industrial land over the last few years in order to facilitate growth, however, the councils appreciate there is still need for future growth nodes to provide for the expected expansion of the sector. As a result, the report identified three suitable long-term growth nodes as south-east Feilding, Longburn and north-east of Palmerston North’s North-East Industrial Zone, with the latter being the only area where adjoining land ought to be rezoned to industrial in the short to medium-term.

 

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