28 April 2014
Not Enough Land for Business in Auckland
Research commissioned by Property Council shows that the Proposed Auckland Unitary Plan risks considerably
underproviding land for commercial development. This could be exacerbated by residential building activity encouraged on
land where business activities should logically have been allowed to grow to support the demand generated by residential
growth – resulting in suboptimal outcomes.
Property Council supports the PAUP’s promotion of business activity around the airport and the theoretical capacity for
business development in the CBD, metropolitan centres and town centres. However in practice, taking into account
development realities, there will probably be a shortage of sufficiently available business land in the medium to long
term across Auckland.
The latest Capacity for Growth Study (CfG) undertaken by the Auckland Council reports 1,875 hectares of vacant business
land and vacant potential land. However, Research by Colliers International suggests that this may be overstated. There
is less than 800 hectares of land currently available for industrial development. The inclusion of vacant land zoned for
office or retail development, of which very little exists, would make only a small difference. Industrial zoned land
accounts for 70 per cent of business land, according to the CfG study.
If annual long term absorption rates settle at 50 hectares per year, Auckland would require around 950 hectares of land
between 2012-2031, in this respect. With the market heating, absorption rates could be significantly higher. Between
1996 and 2006, annual business land absorption rates reached 113 hectares.
There is currently insufficient vacant industrial land to cater for this demand. Auckland Council must prioritise making
greenfield and vacant potential structure-planned/special-zoned available. Even more so if absorption rates start to
drift higher.
Property Council chief executive Connal Townsend says there needs to be a clear signalling and timely decisions by
Auckland Council, so that the development industry has certainty on this matter.
“Given the fluctuation in absorption rates within cycles, the timing of release of land will need to be carefully
monitored,” Mr Townsend said.
Property Council notes:
• Structure planned/special zones and vacant potential business land accounts for almost 80 per cent of total
business land capacity, while vacant business land accounts for just 20 per cent (including both urban and rural).
• 60 per cent of vacant business parcels in the urban area are less than 1,000 square metres in size with limited
vacant business parcels over one hectare. A lack of large vacant sites and a shortfall of vacant greenfield land for
business use in the region limits options for firms looking to locate large scale land extensive activities.
• Most land available for industrial development is in the south. This could lead to a shift in employment
clusters, and absorption rates are likely to be therefore higher in this area – both of which should be properly
accounted for by the Council.
These issues highlight the importance of undertaking robust and timely assessments to meet future business requirements,
and for the Council to ensure it is not overly reliant on theoretical modelling and predictions that are not undertaken
on a regular basis. Market realities and practical considerations are key and must be accounted for in this respect.
Property Council urges Auckland Council to continue carefully assessing the location and type of activities in business
zoned land, to avoid adverse impacts on the vitality of the existing city centre, metropolitan, town and local centres.
This is a vital issue, with significant ramifications for Auckland’s future employment, business and economic growth.
About Property Council New Zealand
Property Council is New Zealand’s commercial property voice. Property Council represents New Zealand's office,
industrial, retail, property funds and multi-unit residential property owners, investors and managers. Property
Council’s branches throughout the country represent some of the largest commercial property portfolios in Auckland,
Waikato, Bay of Plenty, Wellington, East Coast/Hawkes Bay and the South Island and Otago region, the value of which
exceeds billions.
ENDS