After a decade of sifting through ideas & starting earthworks on its Drury South Crossing property, Stevenson Group Ltd has sold about 75% of the 28 lots in the first 2 industrial blocks. They range from 7000m² to 4ha.
Drury South Crossing chief executive Stephen Hughes said during a site tour last month the company was about to start marketing block 3 – “right in the middle of the project. Our expectation is that that will sell quite quickly. All those 3 blocks will be delivered late next year to early 2021.
“Block 3, about 15ha, has another 10 lots averaging 1.5ha, including some premium sites for service stations etc, priced a bit higher because the market’s moved and it’s our best offering at this stage.”
Stevenson’s is also marketing a 10ha commercial strip at the moment, and carrying out siteworks on the special housing area beside the motorway.
“The commercial will probably become more of a mixed use zone. We think with that open space reserve & residential, there’s an opportunity to accommodate some residential in that area. It gives a critical mass to it – a community after hours.
‘When you’re selling product, you don’t want to be selling all from one basket. You can sell it a lot quicker. That commercial/mixed use zone will be a third strand in our strategy.
“The council’s Drury-Opaheke structure plan, recently out for consultation, is going to offer more housing & commercial development in the area. It’s complementary for us. I think it could be a positive thing for the area.”
Classic to build 800 houses
In addition, Classic Builders Group Ltd is doing earthworks for its residential subdivision. Stevenson’s sold the 50ha residential development site nearest the motorway to Classic, which will build about 800 houses on it (starting price point $580,000, midpoint $680,000). The first homes should be available this year.
Stevenson’s began investigating the feasibility of an industrial zone adjoining its Drury South quarry in 2008, lodged its plan change application in 2011 and, this year, the extensive earthworks programme has brought construction close to reality.
Industrial land supply tight
Mr Hughes said inquiries for industrial sites dipped after the 2017 election & Christmas, but had picked up this year: “We’ve signed a couple of contracts in the last few weeks – typically $4-10 million, 1-2ha blocks.
“There are a number of larger requirements, 10-20ha, but that’s slow-moving.”
However, as takeup grows at Drury South, developers are looking at a long drive down the motorway to the next project.
The supply of industrial land in Auckland is very limited, Mr Hughes said: “If you don’t take this you’re looking:
- outside Auckland
- Westgate 50ha.
“We’re about $400/m², whereas everybody else is $600+/m².
“From a logistics point of view, everybody wants to be in the south of Auckland.
“The big guys have been talking about servicing the whole North Island from here, probably largely by road. If you’re looking for 10-20ha, you will probably have to move quite quickly unless you move out of Auckland.
The Sleepyhead move
“Sleepyhead have made a big move to the Waikato, building for their workers, it’s quite radical. They had 10ha at Manukau next to the Te Whero waterpark but it was rezoned residential so they sold. Then they bought land at Tidal Rd, Mangere, they’ve sold down a subdivision of that – some at $570/m² and onsold at $620/m².
“We started at $300/m² and are now at $400/m².”
Sleepyhead confirmed its move to Ohinewai, between Hampton Downs & Huntly, last month, including its intention to provide housing its workers can afford.
Lifestyle blocks an expensive issue
As well as the limited supply of industrial land, Mr Hughes said the other issue on the urban periphery for Auckland was all the lifestyle blocks: “Even to stay residential you have to put in all the infrastructure. We had to buy 30 properties to make this one work. It would be really hard for a public body to make that work.
“Lifestyle blocks can easily be $200/m² to purchase, plus development costs.
“If we go to $1000/m² for industrial land it might work – which seems unlikely, [though] industrial land is selling at $800/m² in East Tamaki now.
“Stevenson’s developed Lady Ruby & Sir William in the 1990s, around 1995, at $50/m². Before the global financial crisis they got up to $400/m², and recent sales there are about $800/m². It’s probably why we’re getting so much inquiry now.
“There will be smaller lots there – our smallest is about 7000m². East Tamaki would be a quarter of that.”
Mill Rd could still affect site
Even with that steady interest in large industrial lots, plus the introduction of a commercial zone and the start on residential, some changes to the 361ha estate may still be made.
One revolves around the route into Auckland of the Mill Rd extension, talked about for years as a second arterial to reduce traffic on State Highway 1. One option could take it through the middle of the Drury industrial land, though, Mr Hughes said, “This whole project’s designed without it. If you’re putting it in at the right time it’s a nice to have.”
Getting it across the site would be an expensive task because Drury South Crossing is on a floodplain. While the company’s been working on the creation of wetlands through 90ha of the site, in addition to the Hingaia & Maketu Streams which meander through the area, introducing a major new thoroughfare would require a bridge or causeway, starting at 15m above the floodplain and going down to 4m above – the level Stevenson is taking its site to.
“You end up with a 500m-long bridge or causeway, and it would get very close to the new pump station,” Mr Hughes said.
The southern entrance to the site has already required a bridge across the wetland, with 18 beams – each one 35m long and weighing 65 tonnes – brought up from Te Puke through the night on special over-length trucks, and put in place straight off the truck.
Mr Hughes described the wetlands as “a 200,000m³ hole, average 4m depth over 2.5ha, in about 90ha of open space. We don’t touch the stream, but we’re upgrading & planting the edges of it.”
Long horizon needed
Mr Hughes said the uncertainty over things like arterial routes could be avoided if we looked 30 years ahead: “You want the council to focus on the big things, the important pieces of infrastructure.
People have to put their personal preferences aside.
“I don’t see a 30-year plan in which you have to make some big decisions. Even if you look at the harbour bridge, there’s no reason not to have a plan in place. There’s no meaningful plan.
“People say things change, why plan? It will only get harder and it gives people more certainty.”
We’d been talking about the possibility of a bridge across from Weymouth to Karaka – flagged years ago, then ditched, but a potential short route into the Franklin area: “If you said to the people of Weymouth & Karaka, for instance ‘Here’s what’s going to happen’, it’s always hanging there.”
Other changes would follow: “Pukekohe might change if Mill Rd goes right through there and the population changes. That could be where the future industrial is 20-30 years away. It probably needs the Weymouth bridge, to the airport. It’s not a big crossing.”
Auckland Council planning committee agenda item, 6 August 2019:
8, Drury-Opaheke & Pukekohe-Paerata structure plans
Attachment A – Drury-Opaheke structure plan 2019 (117 pages)
Attachment B – Pukekohe-Paerata structure plan 2019 (138 pages)
11 February 2019: Industrial sites are selling as Drury South Crossing kicks into second gear
16 October 2018: Fulton Hogan drops Huntly quarry from Stevenson purchase, Commerce Commission happy
22 September 2017: Kiwi Property settles second Drury site purchase
10 September 2017: Second round for Auranga precinct confirms Drury as major growth centre
2 July 2014: Report indicates acute shortage of industrial land likely, but key land advocates don’t press for specific measures
30 June 2014: Report says business land supply “at best” meets 5-year demand
30 August 2013: Drury South industrial area plan change & MUL extension approved
Attribution: Site visit, Drury South Crossing website, council agendas.