A tall order for developers
Industrial buildings might have to go higher to keep up with demand. Chloe Winter reports.
The rise of online shopping and the push for improved delivery is forcing property developers to come up with creative solutions to provide more space.
Bayleys industrial and logistics director Scott Campbell said the pressure meant developers were considering building multi-storey industrial properties.
Multi-level industrial sites were common in densely-populated Asian cities, with some reaching up to 15 storeys high. Campbell believed New Zealand would following suit, though on a smaller scale
‘‘The demand for industrial property that can fulfil the needs of a ‘click and collect, same-day delivery’ culture is only going to increase,’’ he said.
Goodman, which had already developed multiple multi-storey industrial properties across Asia, was one of the firms taking the lead on vertical warehousing in Australia and New Zealand.
Speaking to the Sydney Morning Herald in February, Goodman chief executive Greg Goodman said areas where land values were high would lend themselves to vertical industrial properties.
‘‘Increasing urbanisation, rising consumerism, and changes in technology are creating increased competition between residential, higher density industrial, e-commerce and data centre uses, driving rents and land prices in areas where supply is already constrained.
‘‘We are increasingly seeing a shift towards multi-storey industrial facilities or changes of use to commercial and residential.’’
Growth in online shopping and the push for improved delivery would inevitably drive demand for high-rise warehouses, he said.
Campbell said pressure was building in New Zealand to upgrade industrial areas to meet the sector’s changing needs.
‘‘Business growth in and around well-located industrial precincts has peaked to levels not seen since before the global financial crisis, and the boom in e-commerce has been rocket-fuel for the logistics industry.
‘‘The growth in e-commerce is driving much of the change in the sector, and inevitably industrial sites in New Zealand will need to be developed along similar lines in the future.’’
Most industrial properties in New Zealand were single level. If there was a second level, it was often used for office space.
‘‘Multi-level industrial will become increasingly feasible for high-value industrial users who can afford rents that would be needed to support the additional cost of multi-level construction,’’ Campbell said.
‘‘As the sector becomes more technology-based and consumer demand for products distributed in an increasingly shorter time-frame continues to rise, the cost gap will become smaller and smaller.
‘‘This will accelerate the development of multi-storey industrial properties in New Zealand.’’