Lots of projects in Southpark’s pipeline

5:00 AM Saturday July 25, 2015 Colin Taylor

Artist’s impression of warehouse and showroom for Ideal Electrical at 827 Great South Rd, Mt Wellington, due to be completed by the end of this year.

New design-build facilities for Ideal Electrical, The Aromatherapy Company and NZX-listed Fliway Transport are among $52 million worth of new industrial property projects under construction by Southpark Corporation.

The development company is building a bespoke facility for Ideal Electrical in Mt Wellington, Auckland, while The Aromatherapy Company has signed up to a new distribution base in neighbouring Penrose. Other committed and uncommitted construction projects in Auckland and Christchurch are also underway, including a new facility for Fliway.

Scott Campbell, who has recently joined Southpark as general manager of development, says several factors in the property market and, more broadly, the New Zealand business landscape have contributed to the company’s large pipeline of development projects.

“Industrial vacancy rates in Auckland are at historic lows. At the same time, many businesses are looking for efficient, user-friendly, new-generation buildings with more cubic capacity and better yards,” Campbell says.

“This preference has resulted from a change in the business models of many industrial property users from manufacturing and distributing to importing and distributing.

“An evolution in the way many New Zealand businesses operate has prompted industrial occupiers to re-evaluate their property needs. In many cases their supply chain has changed so they are now coming to the market because they need high stud distribution facilities with functional yards for truck movements, rather than traditional manufacturing buildings.”

“However, a major challenge facing businesses is the continued shortage of A-grade industrial property available for occupation, particularly in Auckland’s central industrial areas of Mt Wellington and Penrose.

“In many cases, searching the market fails to uncover any viable existing properties that can be modified to provide the operational efficiency and storage capacity they require. So businesses are approaching us to design and build new facilities that will meet their needs exactly.”

Campbell has joined Southpark following nearly eight years at Goodman Property Trust, where he negotiated over 250,000 sq m of new industrial and commercial developments across Auckland and Christchurch. He says Southpark holds nearly 15 hectares of land across three large, strategically-located sites in Auckland’s central industrial area, where the projects for Ideal Electrical and The Aromatherapy Company are underway as well as an as-yet uncommitted development project.

“Following land acquisitions, deconstructing old buildings and land remediation, we now hold the biggest portion of vacant development land left in Mt Wellington and Penrose,” says Campbell.

He says the company’s land parcels can accommodate buildings from 2000 sq m in size right up to 40,000 sq m, with the potential to include a rail siding further increasing the attractiveness of the sites to industrial occupiers.

The 6000 sq m warehouse and showroom for Ideal Electrical at 827 Great South Rd, Mt Wellington, has been designed by Eclipse Architects and is due to be completed by the end of this year.

Ideal Electrical managing director Darrin Hughes says the company chose the corner site for a “new concept” facility because of its excellent brand exposure and easy access from arterial routes.

“The new building will be an innovation for the electrical distribution sector, with a ‘mega branch’ attached to a distribution centre which will carry over 15,000 product lines. This will be the greatest breadth of product in any single location in the country.”

The state-of-the-art facility will include efficient lighting and modern data solutions that will help the company achieve better operating efficiency..

As well as the showroom/trade outlet and distribution warehouse, the facility will also include first floor offices, off-street car parking, covered canopies and a large yard.

Southpark Corporation is also constructing a 5200sq m ‘spec’ build next to Ideal Electrical. The building will have a 10 metre high stud and is due for completion in the middle of next year. “The high demand and low vacancy rates in this area have given us the confidence to proceed with uncommitted developments,” says Campbell.

The site can also accommodate either a third facility of similar size or two further smaller buildings.

In Penrose, Southpark is constructing a 2800 sq m distribution facility for Star Products (The Aromatherapy Company) at 117 Hugo Johnston Drive, next to its recently-completed facility for Visa Global Logistics.

Campbell says The Aromatherapy Company is moving from its current location in Penrose to a bigger facility due to business growth. “We’re now well underway with the design process for the new building and aiming for completion early next year,” says Campbell.

Southpark Corporation is further broadening its portfolio in Christchurch, where several developments are underway.

“A major Southpark joint venture development in Christchurch is Waterloo Business Park, which will incorporate a wide variety of industrial and commercial occupiers around a central town centre community hub – a similar concept to Highbrook in Auckland which has never been seen before outside Auckland,” Campbell says.

The 114 ha Waterloo Business Park is being constructed on the old Islington Freezing Works site on the western edge of the city, with several of the old brick buildings due to be restored to provide a heritage focus to the new town centre and community hub.

“We have sold or leased nearly half of the total lots available at Waterloo so far, with the most recent signing to Fliway Transport for a 7000sq m facility on a 12-year lease.”

Further diversifying Southpark’s portfolio is around $800 metres of new development across its Kensington Park residential community in Orewa, north of Auckland and Market Cove residential development at Mangere Bridge, as well as various holdings including the Kinloch Golf Course and Takapuna Towers.

Scott Campbell, Southpark Corporation.jpg

Scott Campbell of Southpark.