Northern firms opt for southern bases
Cost efficiencies are luring more North Island businesses south as they split their distribution centres between Christchurch and Auckland.
Sam Staite, director of industrial at Colliers Christchurch, says the affordability of the Canterbury market is a major attraction coupled with the ease of business relationships.
“Businesses are very conscious of keeping their costs under control so they can continue to offer their products at competitive pricing.
“With property occupancy being a significant portion of a firm’s overheads, and given the current economic challenges, it makes sense that more and more are looking south for ways to find efficiencies,” Staite says.
“With cheaper warehouse rental costs plus efficiencies in transport and labour, it has certainly been a growing trend over the past five years. In some instances, warehousing in Christchurch can be almost half the rental charged in Auckland for a similar product, so it’s no wonder inquiry is building.”
Staite cites a 77-year-old North Island family business he recently worked with to identify the right development opportunity in Christchurch to build a new distribution centre.
Steelfort, a leading supplier of outdoor power equipment, is the contract distributor of high-end kitchen and laundry appliance brand Miele. It has a longestablished stainless steel fabrication business and manufactures commercial finned-tube heat exchangers for the likes of the kiwifruit and apple industries.
It already owns a state-of-the-art 2000sq m distribution centre at 880 Great South Rd in Auckland and an
11,000sq m manufacturing facility in Palmerston North but sees immense opportunities in Christchurch.
Earmarked for completion in October, its cutting-edge design/ build is located at 21 William Lewis Drive in Sockburn and is being developed by Calder Stewart.
Staite says John McOviney, Steelfort’s managing director, contacted Colliers because of its reach and market knowledge.
“He lives in Mt Maunganui, so we wanted to spend whatever time necessary to ensure he fully understood the options here and took him to meet a variety of developers. It meant that, with our advisory support, he could make an informed decision.”
McOviney says the company has been looking at the Christchurch market for some time.
“We were very keen to have a strong presence in the South Island and see big things happening here over the next 10 years. It’s an ideal location for distribution. The South Island, and particularly Christchurch, has always been very good for Steelfort and particularly for our Lawnmaster branded products.
“Sam introduced us to the right people, showed us the right site, and had extensive market knowledge.”
The new 3100sq m building includes 600sq m of showroom and sits on 5998sq m of land.
Steelfort’s new neighbours in Christchurch are another North Island-based company that was already renting in Christchurch but was keen to become an owneroccupier.