Cold storage is hot property
The cold storage sector faces huge challenges globally as demand for space escalates on the back of interrupted supply-chain dynamics, changes in food-buying patterns and, critically, vaccine storage.
In New Zealand cold storagerelated property has been identified as one of the leading growth sectors in the industrial property market.
This is largely due to the success of our primary industries and associated export activity, but also from the rise in online grocery and food delivery volumes.
Bayleys’ national director industrial Scott Campbell said, anecdotally, the secure and safe storage of Covid-19 vaccines is also contributing to high demand in the sector in New Zealand.
Campbell said importantly, the broader cold chain – including refrigerated containers, blast freezers and chillers, cold rooms, dedicated cold storage warehouses and refrigerated transport – is vital to New Zealand’s economy, which is founded on the primary sector.
“Given our isolated geographical location, New Zealand’s export cold chains are some of the longest in the world requiring specialist logistics knowledge,” he said.
“The downstream effect of pandemic-restricted trade and disrupted supply chain movements throughout 2020 continues to put strain on the limited supply of property geared up to provide cold storage in our key centres and in regional New Zealand.
“Food producers and suppliers – particularly those with frozen goods for the export market – have been scrambling to find storage solutions, competing for space, and trying to get to grips with new health and safety protocols.
Due to the specialised nature of the sector, developing purpose-built cold storage facilities requires deep pockets – particularly as energy efficiencies are sought – and the ongoing maintenance costs over a facility’s lifespan are also significant.
Campbell points to the investment made by grocery giants Foodstuffs and Woolworths, with both entities building huge distribution facilities with cold storage capacity to cater to the growing demand for online shopping and the need to streamline logistics.
Bayleys recently concluded two significant transactions within the cold storage sector. A 5961sq m facility on a 1.62ha site in Mt Maunganui was bought by an Auckland investor for $16,126,000. The property is fully-leased to CSN, a leading player in New Zealand’s cold storage sector.
In Kirkwood Rd, Hastings, a comprehensive cold store complex on 1.5ha, fully tenanted by Lineage Logistics NZ Ltd, sold for an as-yet undisclosed figure. Lineage Logistics is a wholly-owned subsidiary of the world’s largest cold store supply chain company, USbased Lineage Logistics LLC, which recently acquired Emergent Cold’s operations around New Zealand.