Waikato Times

Air­port re­bounds from Covid hit

- Business · Travel · Pacific Aerospace · Otorohanga · Hamilton International Airport · Te Rapa · Auckland

A mix of good board gov­er­nance, man­age­ment, and a sup­port­ive own­er­ship struc­ture has placed Waikato Re­gional Air­port Ltd in a strong po­si­tion to move for­ward as the Covid-19 emer­gency wanes, said chief ex­ec­u­tive Mark Mor­gan.

The air­port com­pany was es­tab­lished in 1989 when a con­sor­tium of lo­cal au­thor­i­ties, in­clud­ing Hamil­ton City Coun­cil and Waipa, Waikato, Mata­mataPi­ako and Otoro­hanga district coun­cils ac­quired the for­mer Rukuhia aero­drome from the Gov­ern­ment.

A sur­round­ing 133ha of land came with the air­port ter­mi­nal and run­way, and over the fol­low­ing years the air­port com­pany es­tab­lished the 75ha Ti­ta­nium Park, an in­dus­trial and com­mer­cial de­vel­op­ment in four precincts on the air­port perime­ter.

This year Covid-19 threw a big span­ner in the works. As April’s national lock­down bit, air­port pas­sen­ger num­bers – and the in­come that came with them – col­lapsed from around 35,000 in April 2019, to just four in April 2020.

A multi-mil­lion dol­lar up­grade of the air­port’s ter­mi­nal build­ing and car park, planned to be­gin in early 2020, was put on hold, and the com­pany’s newly-up­graded Hamil­ton Air­port Jet Park Ho­tel ceased trad­ing as air travel came to a halt. A se­ries of buy­ers of land in Ti­ta­nium Park backed out of their deals as the busi­ness en­vi­ron­ment be­came un­cer­tain.

Things were look­ing grim. Ac­cord­ing to Mor­gan though, a num­ber of fac­tors came to the res­cue. First, the Gov­ern­ment took over the ho­tel to use as a Man­aged Iso­la­tion Fa­cil­ity, con­tracted to April 30, 2021 with a fur­ther ex­ten­sion pos­si­ble.

A strong crop har­vest from the air­port-owned farm con­trib­uted, as did in­creases in land val­ues around the air­port.

Air­side, pas­sen­ger num­bers re­turned to al­most pre-Covid lev­els with pro­jec­tions for a 7 per cent in­crease in seat ca­pac­ity from March 2021, and even stronger pas­sen­ger growth ex­pected in 2022.

Land sales at Ti­ta­nium Park are a key part of the com­pany’s fu­ture, and the land is highly com­pet­i­tive with com­pa­ra­ble in­dus­trial and com­mer­cial of­fer­ings in the north of Te Rapa, and there are no de­vel­op­ment con­tri­bu­tions re­quired.

Mor­gan said the prop­erty sit­u­a­tion had gone full cir­cle with new land buy­ers com­ing for­ward, mostly lo­cal in­ter­ests, but also large busi­nesses in­clud­ing farm ma­chin­ery sup­plier Land­power and tyre dis­trib­u­tors TyreLine.

‘‘We have run out of land in Stage 4 and in the Cen­tral Precinct and the South­ern Precinct now has only two lots left. We are about to start con­struc­tion on 5ha in Stage 5 of the Cen­tral Precinct, with lots rang­ing from 3500 to about 8000 square me­tres.’’

Earth works be­gin in Fe­bru­ary 2021, and ti­tles will be available later in the year. Stage 5 will take it through to the bound­ary of Pa­cific Aerospace prop­erty and pro­vide sev­eral years of land sup­ply.

‘‘Over the past six months things have re­cov­ered far quicker than we ex­pected,’’ Mor­gan said.

‘‘In­vestors are look­ing for places to park money and peo­ple are chas­ing as­sets, so land is wel­comed as a home for liq­uid­ity. ‘‘We took a strate­gic de­ci­sion a few years ago to be­come a net ac­quirer of land, so we only sell land which is not re­quired for our air op­er­a­tions and re­cy­cle cap­i­tal into other as­sets, in­clud­ing the ho­tel and farm. We re­cently pur­chased a life­style block ad­ja­cent to our North­ern Precinct, which will al­low us to take ad­van­tage of the fu­ture South­ern Links road­ing con­nec­tion.

‘‘Sale pro­ceeds are in­tended to pro­vide long-term cap­i­tal for the air­port com­pany, and this has put us in a far bet­ter po­si­tion than many other re­gional air­ports which have re­lied en­tirely on their air op­er­a­tions. Our fore­cast com­pany debt lev­els over the next 12 months will be amongst the low­est in the last decade.’’

Real es­tate com­pany NAI Har­courts has been busy sell­ing in­dus­trial and com­mer­cial land at Ti­ta­nium Park, and sales and leas­ing agent Sean Stephens said there was now a wait­ing list of busi­nesses and in­vestors keen to ac­cess the next stages of de­vel­op­ment.

‘‘We have been might­ily sur­prised at the level of de­mand and en­quiry for the air­port land. De­mand has been so high the (Air­port) board has de­cided to go ahead with Stage 5 and a scheme plan is ex­pected early next year, ahead of their pre­vi­ous busi­ness plan.

‘‘We are see­ing owne­roc­cu­piers, peo­ple com­ing from Auck­land want­ing to move to Hamil­ton. Land prices at the air­port have risen $70 to $80 a square me­tre in the past 12 months,’’ Stephens said.

 ??  ?? Waikato Re­gional Air­port chief ex­ec­u­tive Mark Mor­gan.
Waikato Re­gional Air­port chief ex­ec­u­tive Mark Mor­gan.

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