Boss of $250m project on bold land deal: They called us mad

“A lot of market feedback was that we were mad at the time,” said the chief of a new $250 million logistics/ warehouse centre in Puketāpapa/Mt Roskill.

Goodman Property Trust’s John Dakin was referring to 2018 market opinion about the trust paying $93m for the 13.1ha site in Roma St.

Turned out, Goodman wasn’t so mad after all. But this story starts earlier last century.

For decades, Foodstuffs North Island’s headquarters was at 58-60 Roma Rd, about 35,000sq m of building covering less than 30 per cent of the site. But last year Foodstuffs shifted to rented premises at the airport.

Four years ago, Goodman bought the big site. That was pre-Covid and the trust paid what people said was well over the odds, Dakin recalled.

What those sceptics didn’t factor in was the growth in online shopping about to hit during the pandemic.

“We bought the site pre-pandemic but . . . these sorts of sites around the world are incredibly valuable for distribution,” Dakin said, standing above the platform of NZ Post’s planned 1.7ha parcel handling building.

“We had a 10-year horizon. But the pandemic accelerating e-commerce and supply chain issues has led to greater demand for warehousing and has really accelerated our plans for not just this site but for others as well.”

Goodman initially planned to keep and lease the old Foodstuffs buildings.

But it became apparent that demand was strong due to people being at home and ordering goods online. Towering pine trees were felled. About 90 per cent of the existing buildings were recycled, although asbestos was more extensive than expected. Concrete and bluestone volcanic rock was crushed for re-use or sold. Only about 10 per cent of materials in the old Foodstuffs building was dumped. All up, 6370 tonnes of demolition material was recovered and diverted from landfills.

“Replacing or repurposing obsolete buildings and remediating contaminated sites is an important part of our development strategy. It improves the quality and performance of existing building stock without consuming additional land, a finite resource in a growing city,” Dakin said.

Mike Gimblett, Goodman development general manager, said a new road would be built through the site as an extension of where Roma Rd ran now, so although it would be private it would appear as an extension of Roma Rd.

A new roundabout would allow easy traffic access to four large new warehouses and distribution buildings.

A public cafe was also planned. About 7000 native trees would be planted for carbon neutrality and to encourage birdlife, Gimblett said.

The NZ Post building would have about 450 rooftop solar panels and 80,000l of water tanks for greywater recycling.

The population within a 20-minute delivery truck radius is estimated to be about 700,000 and the wider consumer catchment has purchasing power of about $23 billion, Goodman says.

“New Zealand consumers have embraced online shopping, making around $7.7b of purchases in 2021, an increase of over 30 per cent from a year earlier. The increasing penetration of e-commerce follows offshore trends in markets such as Britain, the United States and China . . .”

The new warehouse/logistics hub is targeting a 5 green-star rating from the Green Building Council, aiming to be carbon neutral.

Goodman plans energy-efficient automated LED lighting, electrical sub-metering for performance monitoring and measurement, electric vehicle charging stations, rooftop solar energy, HVAC systems that use low emission refrigerants, lowemission double glazing, low-flow water fittings, rainwater harvesting, low volatile organic compound materials and finishes and the extensive landscaping.

Goodman is trading around $2.21, down 6 per cent annually, giving it a market cap of $3b which makes it one of New Zealand’s largest listed property investors.