FOCUS on transport and logistics Spring 2019

u p d a t in g a n d in f o rmin g t h e Gre a t e r E a st Ta ma ki b usin e ss co mmu n it y

4 JUST THE RIGHT CHEMISTRY 6 TRANSPORT & LOGISTICS SECTOR AT THE CROSSROADS 8 MAKING TRANSPORT SUSTAINABLE 12 DOES THE GATHERING GLOBAL GLOOM MATTER? 19 PRODUCT STEWARDSHIP 22 CHALLENGE 2 CHANGE CHANGES LIVES

ON TRANSPORT & LOGISTICS

SPRING 2019

Editor: Jane Tongatule E gm@getba.org.nz Advertising: E comms@getba.org.nz

From the Chair

PO Box 58260 Botany Auckland 2163 P 09 273 6274

getba.org.nz

Welcome to the Spring issue of the GETBA magazine, where we FOCUS on transport and logistics. It seems to me ironic that as soon as we hear of a drone bombing oil production in the Middle East, prices at the pump in New Zealand rise almost immediately, when not a single litre of more expensive fuel has been imported. A week on and we now understand the temporary impact, but New Zealand distributors keep the fuel pump prices at their peak.

Aucklanders and Auckland businesses have regional fuel tax and global oil security-inflated fuel prices, so the link to the transport industry and logistics element of our supply chains becomes increasingly important. It’s also interesting to hear the Ports of Auckland trucking capacity issues associated with moving imported vehicles from the Port to South Auckland storage yards as a logistical challenge, getting airtime in the current mayoral debates.

While the New Zealand economy continues to grow at the lower end of 2% GDP, it appears that in addition to Brexit, the China-US trade war fallout potential, we can add renewed oil insecurity and potential war on Iran to our global economic outlook. Take a look at the Auckland Council Chief Economist’s article on page 12.

Upcoming events

Another issue business is facing at present is associated with employee recruitment and retention, where with all time low unemployment (3.9% is effectively zero unemployment), it is getting harder and harder to attract and retain both skilled and unskilled staff. Add to this the immigration settings that are making it impossible for the existing immigrant workforce to renew their work visas, and staff retention is becoming a real issue. Auckland business is further penalised by the 30 additional visa points applicants enjoy if they work outside the Auckland region. Is it time for the Auckland region to have separate skills shortage and more competitive immigration settings to supply our workforce? Come along to our November Business Owners Forum on Immigration to find out more.

After a long and very wet winter, we can now say that spring is in the air, so happy reading.

BRENDAN KELLY CHAIRMAN, GETBA

22 October St John: Mental Health First Aid 6 November St John: First Aid Level 1 12 November Business Owners Forum: Immigration 13 November People Essentials: Implementing Flexible Working November/December Breakfast

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GETBA SPONSORS

RSM TRANSPORT AND LOGISTICS

It is more important than ever that business owners and managers have a good handle on the dynamics of their business. To be successful they must fully understand their costs, cash flows and the prices that need to be charged.

We are seeing our clients utilising effective and efficient accounting and information systems to ensure they are in control.

Advances in technology have meant that suitable systems are available at a fraction of the cost they once were.

Health and Safety Transport can be a difficult and sometimes dangerous business. Operators not only have to guard the health and safety of their own team but also the public at large.

Recruitment, business sustainability and health and safety are three current hot topics in the transport industry. Charles Worth provides his opinion on these trends, and how they affect the local landscape.

Recruitment: how to attract and retain the right people?

and supply doesn’t seem to be keeping up.

Employers can no longer be complacent about their team’s stability.

Robust health and safety regimes are integral to today’s businesses. Those charged with governance must ensure that they are implemented, monitored and maintained.

Our clients are introducing new and innovative practices to retain quality people in their businesses.

Increasingly, technology is being deployed in a bid to make the sector safer.

Training and personal development opportunities are clear drawcards and do assist with attracting the right candidates when looking to recruit.

Sustainability of business model

Business is booming and industry growth is a certainty. This creates a growing demand for skilled drivers and support staff

Costs are rising and pressure on rates is ongoing. Competition is hot and in a low interest rate environment, barriers for new entrants to the industry are diminished.

Truck manufacturers and other providers are producing a range of innovations that are improving the safety of road transport.  Charles Worth is a partner in the RSM Auckland office with more than 30 years of accounting experience, both in practice and as a financial controller.

Charles has a diversified client base covering a broad range of industries, size and types of entities, and has a particular interest in the transport industry. rsmnz.co.nz

We partner our clients so when the rubber hits the road, they know their numbers.

More than accountants, we’re partners with our clients on their growth journeys.

We bring the best of local expertise combined with the 6th largest international accounting network of independent audit, tax and advisory firms.

• Transport & Logistics accountants • R&D Tax Credits: know what you can claim • Maximise capital allowances, financing and bank support • Risk management, financial reporting and control systems • Tax advisory, Customs, GST • Structuring your business in NZ and internationally P: +64 (9) 26 11 674 E: charles.worth@rsmnz.co.nz

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CHEMFREIGHT

JUST THE RIGHT CHEMISTRY New Zealand family-owned and operated, Chemfreight is a specialised 3PL distributor offering the complete solution of hazardous, non-hazardous and separate dedicated food storage and chemical toll blending backed by a national transport network.

Started in 1989, it was the brainchild of Harry Price who, having worked in the chemical industry for many years, saw an opportunity and industry need for the specialist third party storage and distribution of hazardous goods. Three years ago, his son Joseph Price, took the helm as General Manager bringing his well-rounded business experience following years in insolvency and accounting. The business has undergone substantial changes and almost doubled in size from a staff of 40 to 80, and 100 clients to 200. Chemfreight does not have a sales or marketing function and has used their reputation for operating class leading facilities and delivering an excellent 3PL supply chain service to attract new business and also retain their existing valued clients.

With their Head Office in East Tamaki, Chemfreight operates three Major Hazardous Facilities with two state-of-theart storage facilities in Auckland and a large storage facility servicing the South Island located in Christchurch. They process approximately 3000 inbound containers per year and store in excess of 20,000

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pallets across nine warehouses. Next year construction is planned to commence on a specialised concrete walled and roofed store for flammable substances with a capacity of 5,000 pallet spaces.

Low staff turnover Many of the staff have worked at Chemfreight for years, and it is very much a family focussed business. “There are some families where as many as three family members are employed here as part of our team,” says Joseph.

In an industry that sees a high staff turnover, Chemfreight has very low turnover. “Finding high calibre skilled staff is a challenge,” says Joseph, “and we have worked really hard to attract and retain our team. This means investing in the best safety and handling equipment and listening to what our team needs, giving them as much choice as possible when selecting their work equipment from safety glasses, wet weather and hot weather gear, to work boots.”

Joseph worked at Chemfreight in his high school and University years. “I have a good understanding of what is involved from the ground up and know the physical and operational challenges of the work,” which is why he wants to ensure his staff are comfortable and have the most appropriate safety gear. “We put employee welfare ahead of anything else and our team appreciate this approach,” he says.

Chemfreight has a diverse group of staff which, Joseph explains, “reflects our approach to employing on merit.”

Joseph describes the company as a meritocracy, saying, “Everyone wears the same brand and are treated the same. Our people are respected for what they do here and their contribution to the business.” He believes that this environment is crucial to the success of the company. Joseph explains that the staff appreciate, “There is a clear progression for staff. Our team like to see there are opportunities for development within the business and consequently this is reflected in our low staff turnover.”

Team training and wellbeing The team’s safety is paramount and in the last twelve months, Chemfreight delivered in excess of 2000 hours of training. “We also consider staff wellbeing outside of the workplace. We look after our people because we understand people have lives and challenges outside of work.”

He explains that it is not safe to have distracted workers in their high hazard facilities, “There are some products here that if not handled correctly can be very harmful and possibly fatal.”

monitoring and tracking and carry chemical pump over capabilities for hazardous and non-hazardous chemicals. For the 3PL industry, transport margins are tight and congestion on the roads leads to rising costs.

Delivery windows can be set by customers who then require inward goods at certain times and this creates additional time pressures. Chemfreight currently distributes close to 2,000 tonnes of freight a week and provides DIFOT reporting to its customers.

Safety and compliance a priority Chemfreight take pride in having a great compliance structure with six people devoted to compliance who are highly qualified in science fields such as organic chemistry and biochemistry. Joseph explains, “Not only do we understand what we store and handle, we understand what it can do to you, how to treat it, what to store it with and what not to store it with.”

In addition to keeping the staff well trained, Chemfreight continuously undertakes risk assessments and review their safety procedures. They strive to exceed all legal and quality requirements. This has had the advantage of attracting new business.

The Chemfreight health and safety philosophy goes beyond their own facilities, with the company choosing to only work with transport partners who really understand the risk of what they do. With family connections sewn into the business, a workplace injury or death would have extra consequences. Joseph says, “We have a culture here where people think about safety first. If someone has a different approach, they won’t continue to be employed by us.”

Another example of putting employee wellbeing first is the introduction of a policy to reduce loose load inbound containers.

Chemfreight aligned itself with WorkSafe best practice and made the decision to scale back these activities in order to avoid injuries and improve outcomes for workers. “After informing clients and ensuring everything was palletised for health and safety, we have seen a fall in injuries arising from this activity as staff are no longer lifting heavy loads from above the head, back and shoulder regions.”

Impact of traffic congestion Chemfreight own and operate a fleet of 11 specialised trucks in its Metro Fleet with Dangerous Goods capabilities and certification. They are equipped with GPS

Fortunately, Chemfreight have the versatility and flexibility to diversify into other services.

They have a ‘Toll Blending’ service in which they manufacture chemicals, then store and distribute them through the Chemfreight network. With the ability to blend up to 5,000 litre batches and with four blending tanks they can manage the whole supply chain from start to finish. They can also provide a service similar to fuel transfer in which they deliver the chemicals, pump them into the customers vessels, clean up and leave, taking away with them the drums and making it very easy for the end customer.

Joseph credits the success of Chemfreight to his team of 80 staff having a clear objective to ensure the team works together to achieve it.  chemfreight.co.nz

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ANZ

AT THE CROSSROADS The Transport & Logistics Sector

The Transport and Logistics sector is vital to New Zealand’s economic prosperity. But new approaches are needed to address the challenges it is facing, according to a new report from ANZ Bank New Zealand Limited (‘ANZ’).

FREIGHT GROWTH FORECAST 2012-2042 (IN MILLION TONNES) Source: ANZ Analysis; National Demand Freight Study 0

20

40

60

80

100

120

General freight (manufacturing & retail) Concrete, aggregate & other minerals Logs & timber Dairy Limestone, cement & fertiliser Horticulture & other Waste

The report (part of ANZ’s Business Insights series) analysed 170 Transport and Logistics businesses from around New Zealand to create a snapshot of the industry and its future outlook.

Livestock Petroleum Coal Steel & aluminium Meat & wool

The report emphasises the importance of the sector to New Zealand, exemplified by the strong correlation between freight activity and GDP growth. The Transport and Logistics sector itself contributes $12 billion to New Zealand’s national income – around 4.7% of GDP (June 2019).

Underneath the optimism, however, the Transport and Logistics sector is facing challenges.

The prospects for the future look bright too, with the industry having to meet a potentially growing demand for its services.

“The industry has always been fiercely competitive,” says ANZ General Manager Commercial & Agri Auckland & Northland, Andrew Sheed, “and that hasn’t changed.

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Courier Vehicle

2012

2042

But as the report makes clear it’s also facing low productivity growth, driver shortages, an ageing fleet, and pressure to become more sustainable.”

The report also shows that the gap between the most and least profitable operators has widened over the last few years.

EBIT MARGIN Source: ANZ Analysis

immigration system and encouraging driver diversity. The Government is also making investments in road, rail and coastal shipping infrastructure.

16% Upper quartile 14%

14%

When it comes to more environmentally sustainable freight, the report found no ‘silver bullet’ and outlines a range of approaches that is likely to be implemented as businesses take incremental steps towards achieving their sustainability goals.

12% 10% 8%

Medium quartile 7%

6% 4%

Lower quartile 3%

2%

A different way of doing business

0% 2013

2014

2015

“While the industry has been a resilient performer, the status quo is increasingly under threat,” says Andrew Sheed.

“For the industry to survive and thrive – and to ensure New Zealand continues to benefit from reliable, high-quality transport and logistics services – we think it’s clear that new approaches are needed from both operators and end-users.”

2016

2017

2018

All things considered, to fully enable these and other initiatives as well as address the challenges the sector is facing, the report argues that the Transport and Logistics sector will need to evolve into a more collaborative, whole of supply chain approach.

Addressing the challenges Encouragingly, both the industry and the Government are taking steps to address these challenges. The Government has committed $2.8 million to train 700 commercial drivers a year in 2018, while the industry is calling for changes to the

The report sees an opportunity for both operators and end-users to enter into closer working relationships and explores what a more integrated model could mean for specific sectors.

Disclaimer: The report and this article is prepared for information purposes, is necessarily brief and does not constitute advice. ANZ relies on information from third parties at a particular point in time and ANZ doesn’t warrant its accuracy, completeness or suitability for your use. You should get professional advice for your particular circumstances. ANZ doesn’t accept any liability for any opinions or information or any losses or consequences arising from its use.

 To obtain a copy of ANZ’s new Business Insights report, “At the Crossroads: The New Zealand Transport & Logistics Sector“ anz.co.nz/transport

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S P R I N G 2 0 1 9 FOCUS ON TRANSPORT & LOGISTICS

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FISHER & PAYKEL HEALTHCARE

MAKING TRANSPORT

SUSTAINABLE The transition from fossil fuel vehicles to electric vehicles (EV) and other forms of more sustainable transport is well under way around the world. Fisher & Paykel Healthcare is charging ahead at the front of the pack.

They are undertaking a number of initiatives to encourage employees to move to alternative forms of commuting as a way of reducing greenhouse gas emissions and local air pollution. Initiatives are being driven by the Sustainability Team who are fostering a growing Green Team of sustainability champions embedded throughout the company. One Green Team sub-stream is the Sustainable Transport team which encourages employees to drive electric, ride bikes, e-bikes or e-scooters, take public transport and carpool.

Electric vehicle charging Fisher & Paykel Healthcare completed the installation of 45 slow electric vehicle charging stations and one medium speed DC charging station in March 2019 with the help of co-funding from the Government’s Low Emission Vehicle Contestable Fund administered by the Energy Efficiency and Conservation Authority (EECA). In July 2016 there were just four EVs being driven to work by employees. Four slow EV charging stations were installed as a pilot project to encourage more employees to drive electric. By October 2018 there were 35 EVs regularly using the four charging

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stations in three carefully managed shifts during the day. It was clear there was a need for more EV charging facilities.

Most people driving an EV charge overnight at home for much of their driving. This means that they wake up each morning with a ‘full tank’ – something not possible with a fossil fuel car. But one of the worries that people have before moving to an EV is where they will be able to charge if they really need to. Workplace charging is one way to mitigate this worry and means that even the first generation of EVs with 100 km of range per charge are excellent for commuting. The current generation of more affordable EVs can drive 200-500 km per charge.

While the up-front cost of an EV may be a little higher when compared to a fossil fuel car, EVs have much lower running and maintenance costs – as little as $4 per 100km when slow charged. Fisher & Paykel Healthcare employees driving 15,000 km per year are seeing savings of about $2,500 per year. Many of the EVs are being driven by employees who have longer commutes. For example, those with round-trip commutes of close 100 km are seeing savings of more than $4,000 per year, quickly offsetting the increased upfront cost.

In October 2018 the installation of 18 additional smart slow EV charging stations and the medium speed DC charging station was complete, and by the end of March 2019 the remaining 27 slow charging stations were installed, including the upgrade of the original four. The medium speed charging station is for use by employees and visitors, while the slow charging stations are for employees only. The eight-hour work day is more than enough to fully charge most EVs using the slow charging stations, which deliver up to 32 amps. ChargeNet, the company rolling out a nationwide EV fast charging network, have been contracted to provide the back-end billing service. Users simply swipe their standard ChargeNet RFID fob to start charging and pay a tariff per kWh. The tariff is set by Fisher & Paykel Healthcare to cover the cost of power. ChargeNet bill the user’s credit card each month in their usual manner. There are now 50 Fisher & Paykel Healthcare employees regularly driving an EV.

Alternative transport Fisher & Paykel Healthcare also has a keen and vocal bunch of commuters on bikes, e-bikes, e-scooters and e-skateboards, evidenced by a fourth place in the Aotearoa Bike Challenge 2019. Covered lock-up areas, great shower facilities, bike stands for maintenance and tyre pumps have been installed around the campus to help encourage these forms of transport.

Encouragement is certainly needed, as the local roads such as Highbrook Dr, Cryers Rd, Trugood Dr, Harris Rd, and Ti Rakau Dr are very busy, and definitely not cycle-friendly. The high volume of local heavy vehicle traffic adds to the reluctance of less confident riders to take on these roads. To help improve this, a group of Fisher & Paykel Healthcare cycling advocates, with endorsement from senior management, approached Howick

Carpooling In addition to these alternative commuting methods, Fisher & Paykel Healthcare also promotes and facilitates carpooling to its employees. It makes sense, in an organisation with around 2000 onsite, that people will likely be commuting on similar routes at similar times. To address this, an online carpooling tool was created that connects employees who live near to each other and allows easy creation of carpool groups. To date, there are around 100 registered carpoolers who are all enjoying saving money, saving the environment, making new friends, and potentially even getting some sleep on the morning commute, (passengers only!).

Local Board in 2017 with a proposal for improving cycling infrastructure in the area, including an off-road cycleway along the northern side of Highbrook Dr, from the motorway down to Business Parade Nth, and onwards to Harris Rd. This has since become part of the Howick Walking and Cycling Network Plan released in 2018. We remain hopeful that this plan will receive appropriate funding and action during the next local board election cycle.

The Fisher & Paykel Healthcare cycling advocates also supported the new off-road pathway around the water’s edge and across the mangroves from Stonedon Dr to Ti Rakau Dr which was opened in 2018.

This further encourages employees to cycle, scooter and walk, as it avoids the congested Trugood Dr and Cryers Rd network, and starts only 100m from the Stonedon Dr rear entrance of the Fisher & Paykel Healthcare campus.

Even though the incentives to carpooling are substantial, there is still a long way to go to get more people on-board. The barriers to carpooling are generally thought to be a sacrifice of convenience and independence, as well as the reluctance to meet and engage with strangers. However, as the cost of independent commuting continues to increase, carpooling and other alternative methods will likely become more popular.  fphcare.com/nz

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Trustworthy  Certified  Reliable  Experienced  09 273 3682 | www.mc2ca.co.nz administrator@mc2ca.co.nz S P R I N G 2 0 1 9 FOCUS ON TRANSPORT & LOGISTICS

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TRANSPORT

AMETI

EASTERN BUSWAY UPDATE

Stage 1 construction Work is now underway along the entire Stage 1 route between Panmure and Pakuranga Town Centre. Work crews have been busy cutting back the cliff and building the new retaining wall along the eastern side of Lagoon Drive, making space to build the busway along with cycling and walking paths. Construction has also begun on the new busway bridge over the Tamaki River.

Plan ahead: take advantage of more travel choices To endeavour to minimise disruption, Auckland Transport are maintaining all traffic lanes during peak travel times, using live monitoring, adjusting traffic signals and carrying out the more disruptive work during off-peak travel times, holiday periods and weekends, where possible.

Auckland Transport have also launched a new T2 lane, express bus services and a Park and Ride at Lloyd Elsmore Park to give more travel options during the busy construction period. The new express bus 10

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“Whilst we are working hard to keep traffic flowing, some disruption can be expected given the amount of work taking place. We thank people in advance for their patience and cooperation. Our advice is that people think about their travel plans in advance. This may include looking at alternative travel routes, talking with employers about commuting outside of peak periods, carpooling or using public transport where possible.�

AMETI Programme Director Duncan Humphrey

services depart from Howick and the Lloyd Elsmore Park and Ride regularly during peak hours, connecting to further trains or buses at Panmure Interchange.

Reeves Road flyover & stages 2, 3 and 4 There has been recent publicity over the delay in the construction commencement date of the Reeves Road flyer with a revised Eastern Busway delivery strategy for stages 2, 3 and 4.

This does mean a longer period of uncertainty as to the final design impacts along Ti Rakau Drive and related delays in engagement with property owners, however we are assured by Auckland Transport that there will be no delay to the 2025 final completion date and that the new integrated design, planning and construction model will be more efficient and have a greater focus on reducing community impacts and footprint. Auckland Transport advise that they will be in touch with affected property owners.

Sign up for a personalised journey plan Auckland Transport is working with residents, schools and businesses in local communities of Pakuranga and Howick, offering personalised journey plans that provide alternative options for people travelling around the area. Teams have been visiting local residents for the last month and 400 people have signed up for the initiative so far. East Tamaki businesses can also take advantage of personalised travel plans for staff who commute through the construction area. ď ľ For a personalised journey plan and travel advice visit AT.govt.nz/travelplaneast

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11

DOES THE GATHERING GLOBAL GLOOM MATTER?

By David Norman, Auckland Council Chief Economist

We are bombarded by stories of impending economic doom, particularly focused on what is happening offshore. Risk of recession in the US and Europe, and weaker growth in China, the stalwart that helped keep global economic growth above zero through the Global Financial Crisis (GFC) 10 years ago.

In New Zealand, business sentiment is the weakest in 10 years. Does this gathering global and domestic gloom matter to Auckland? The short answer is easy – yes, of course it does. But a more meaningful question is: How much does it matter?

Or how well insulated is Auckland against these risks?

Let’s start with some facts Auckland is in an exceptionally strong economic position. Here’s the evidence: • Year on year GDP growth to June 2019 is estimated at 2.8%.

• The unemployment rate is 4.2%, the lowest in a decade, and has been flat for about nine months at that point.

• Employment (actual number of jobs) is up 2.8% year on year to June 2019.

• Guest nights, despite some recent wobbles, are up 2.8% in the year to June, and at the highest ever figure for Auckland, 12

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ANNUAL NEW RESIDENT DWELLINGS CONSENTED 15,000

12,000

Unitary Plan-stimulated growth pattern begins in earnest

9,000

6,000

3,000

0 Jul 03

Jul 05

Jul 07

Jul 09

Jul 11

Jul 13

Jul 15

Jul 17

Jul 19

Source: Chief Economist Unit, Auckland Council; Statistics New Zealand

at 7.49 million (that’s 20,500 guests per night in our city, excluding uncounted categories like baches and AirBnB).

• Annual net New Zealand migration remains around 50,000, down only 20% from the peak two years ago. Half this migration is into Auckland, so about 26,000 more people a year, with no sign of abating further. They all need to eat,

be clothed, use internet services, and have their hair done. That means huge demand growth for Auckland businesses.

• Auckland has consented 14,200 new dwellings in 12 months to July, up 11% in the year, 39% since the Unitary Plan began to affect development two years ago, and up 353% (not a typo) since we bottomed out in August 2009.

• Non-residential floor area consented is up 95% in the year to June 2019 compared to two years earlier. More than 80% of this growth is driven by the private sector. How does this fit with business sentiment claims?

HOW THE TRADE WAR AFFECTS US

CHINA BUYS LESS FROM AUSTRALIA

• We’re also actually constructing what we’re consenting. Annual building work put in place in Auckland is up 20% in nominal terms, or an estimated 15.6% in real terms in the last 12 months.

• We’ve added 160,000 jobs to our economy in the last five years, not just in construction and tourism. In fact, around 22,000 of them were in professional services, which includes lawyers, accountants, engineers and other highly educated and usually well-paid workers.

• Wages are growing strongly, and household incomes are up 57% in the last 10 years, or more than 40% in real terms. One caveat is this has been driven by growth in personal incomes as well as higher labour force participation and more adults per household as high house price growth has led to bigger household sizes.

I’ll stop there as I am sure I’ve gotten the message across. Auckland is not growing at the 5% it briefly touched a couple of years back, but the region is in an exceptionally strong position. And I say this not as someone paid to wave the flag for Auckland – my job requires me to be the clinical voice of reason. But these facts speak for themselves.

In fact, if you look at the current economic data, the only one that looks a little worrying is the Official Cash Rate sitting at 1.0%, a record low. I’ll get back to that later.

Risks of contagion What is it that’s happening overseas that should cause some concern? Primarily, it’s the trade war between the US and China. These two countries are exchanging increases in tariffs on each other’s goods, as the US administration seeks to stop what it sees as unfair advantages for Chinese exporters to the US. Trade protectionism is not new; it was one of the bedrocks upon which the Asian Tiger economies grew rapidly in the second half of the 20th century. Put big tariffs on imports, create your own domestic industry until you have the economies of scale to compete and even outperform.

But a once popular approach is mostly out of favour today.

Trade between China and the US is heavily skewed toward China’s benefit. As a result, tariffs are having a bigger impact on the Chinese economy. China is also a bigger trading partner for New Zealand, so we’ll

US/CHINA TRADE WAR

GROWTH SLOWS AUSTRALIA BUYS LESS FROM NZ CHINA BUYS LESS FROM NZ

follow the logic of how the trade war will affect China and thus us.

China’s exporters are being badly affected.

This means they will be incentivised to find ways to trade more with other countries.

This could mean cheaper imports for New Zealand consumers (as will a weaker Chinese currency). At the same time, weaker trade for China will mean less job growth there, fewer pay rises and thus less money for Chinese people to spend on premium products like New Zealand milk product.

It may also mean less demand for overseas products used to drive China’s infrastructure development, such as logs from New Zealand or coal from Australia.

And fewer Chinese factory managers will be holidaying in New Zealand, or sending their children to study here at international student prices.

So New Zealand is affected two ways: direct trade with China may fall, and indirect trade with other countries like Australia may fall as they trade less with China.

Finally, if the trade war continues to expand, it will also become a war over political ideologies. Both sides will want peripheral nations to choose between them. Will we side with our biggest trading partner or with a country we traditionally share more political similarities with?

• As already described, Auckland starts from a position of strength. Even if growth drops away or unemployment rises to say 5% or 5.5%, while undesirable, our economy can weather this.

• Our banking and Reserve Bank system is far better protected than it was at the time of the GFC. And let me be clear, I am not in any way suggesting GFC 2.0 is upon us, in large part precisely because the regulatory system is so much stronger.

• We have a proactive Reserve Bank.

Too proactive, some would argue. The Governor has been clear that in an environment of GDP growth under 3%, he would expect to keep the OCR low.

• We have huge fiscal surpluses and reserves. Post 2020 election, whoever is in government will have plenty of room to borrow if there is any reason to think the economy needs it.

• Auckland’s economy is largely focused on domestic consumption, despite being the international gateway, limiting risk. We have a tiny primary sector (a sector which accounts for 71% of New Zealand’s goods exports), some exposure to manufacturing exports, and moderate exposure to tourism exports. But only about one-seventh of the city’s economy is directly exposed to international trade.

How big is the risk?

Auckland will not be immune from this risk, but our city and indeed our country have some buffers that will help.

Disclaimer: The Chief Economist’s job is to provide an independent view on economic issues. As such, these views do not necessarily reflect those of council staff or elected officials

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BREAKFAST WITH COUNTIES MANUKAU EAST AREA COMMANDER, INSPECTOR WENDY SPILLER

BUSINESS OWNERS FORUM – WORKPLACE WELLBEING

Photographs by Grant Southam, grant@southam.co.nz

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BREAKFAST WITH HON. GRANT ROBERTSON

BAYLEYS PROPERTY MARKET UPDATE

S P R I N G 2 0 1 9 FOCUS ON TRANSPORT & LOGISTICS

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MEET GETBA’S COMMITTEE Elected at the Annual General Meeting on 3 October 2019.

Chairperson

BRENDAN KELLY

Brendan is co-owner of Quest Highbrook, a hotel apartment franchise business in the Crossings precinct of Highbrook employing 19 people which opened for business in 2013. Brendan returned to New Zealand after a 30-year ‘overseas experience’ trip, most of which was with DHL in Europe, where he was a regional operations director and global sales director. He used GETBA services to develop and promote the business when it opened and has continued to use the networking and education and training opportunities. As a SME employer Brendan feels that GETBA delivers real value to his business. Brendan was elected to the Committee at the 2017 AGM and was appointed Chair in February 2019 replacing retiring Chair Richard Poole.

Secretary

HENRY JANSEN Henry is a lawyer, Partner and Notary with Wynyard Wood. He joined the firm at their East Tamaki office in 1992 and very soon after that began the work of co-founding GETBA which was incorporated in 1994.

Henry has been the Association Secretary since that time. Wynyard Wood moved to new premises in Highbrook in 2013 so he’s very familiar with the East Tamaki/ Highbrook area and is proud to have been a part of the development that has taken place. Wynyard Wood has been and continues to be an active sponsor of GETBA. He believes successful businesses provide a vital foundation for cohesive, vibrant communities and that GETBA contributes to the growth and development of both.

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Treasurer

LIZ GROENEWEGEN Liz is Managing Partner at RSM New Zealand (Auckland), a member firm of the global international audit, tax and consulting group located in 120 countries globally. She joined RSM New Zealand in 2002 and has been based at the East Tamaki branch since 2005 leading a team of 68 people (including 11 partners) at Highbrook, and with 150 people in three offices across Auckland. RSM actively sponsors GETBA. Liz has been a business owner in East Tamaki and until recently, was a commercial property owner in the area.

She was a founding member of Highbrook Rotary and has played an active part in the business community. She joined the GETBA Committee in 2010 and became Treasurer in late 2011.

efficient solutions and ongoing maintenance services for industrial users of compressed air, Nitrogen and vacuum systems. They have a staff of 12 and have been in business since 1995, with the last 17 years based in East Tamaki. Having lived in the area for over 20 years and worked in East Tamaki for the lion’s share of that, he feels a close affinity to the area. He has been on the GETBA committee for two years and has a good network within the local business community. He feels that his strong local connections are a sound conduit through which important local issues can be raised and addressed.

NICK STEELE Nick is one of two Managing Directors of Boyd Visuals Ltd, importer and distributor of presentation products, office furniture and audio-visual products. They have 16 staff and have been in the East Tamaki area since 2007. They are a property owner too, so Nick looks to represent commercial property stakeholder interests as well. Growing up in Howick, he has a natural affinity with the local area, and as a Committee member see the opportunity to be more involved and contribute to the local business community. Nick was first elected to the Committee in 2018.

DAVID LINDSAY

As well as being the designated representative for Auto Super Shoppe Botany, David owns an Accounting Practice, Lindsay and Associates. He is interested in practical business issues as well as tax advice and measuring to manage businesses. He has worked in East Tamaki for over 20 years, been on the GETBA committee for 15 years including as Treasurer for 7 years. He feels GETBA has made big gains in the areas of crime reduction and local infrastructure and has an effective voice to advocate for business and property owners and represent the area’s best interests.

NICK BILAND

Nick is Managing Director of Plummer Compressors Ltd, specialists in energy

New Committee Member

ANDREW TURNER

Andrew is Managing Director of Nautech Electronics Ltd, world leaders in the design, development and manufacture of electronic products and solutions for over 30 years. His background is electronic engineering and he has a passion for robotics and automation.

Nautech has been based in East Tamaki for 24 years and has been an active GETBA member for many years. Having worked with NZ Police for over 20 years, Nautech has supported GETBA in their crime prevention efforts by providing ANPR camera systems and automated reporting to Police. Andrew feels GETBA plays a critical role in the future development of the Greater East Tamaki area by bringing companies together and supporting local businesses. Andrew was appointed to the Committee in March 2019 on the retirement of Richard Poole.

MEET GETBA’S ASSOCIATION SPONSORS We’re very grateful to our Association sponsors whose additional financial contribution demonstrates their commitment to supporting our local business community and to assisting GETBA meet our objectives on behalf of members. We encourage you to show them your support should the opportunity arise.

ANZ has a team of banking professionals available to help Greater East Tamaki businesses plan and achieve their goals.

ANZ offers expertise in business and commercial banking, agri business, asset finance, transactional banking and trade.

ANZ also has a full service branch and a network of mobile mortgage managers in the area. The ANZ team is proud to be part of the thriving East Tamaki community and to support local events and associations such as GETBA.

BNZ Partners is committed to helping East Tamaki business people be good with money, which is why they open up their innovative Partners Centres for educational GETBA events and business owner forums. Their local, experienced bankers are dedicated to providing businesses with tailored banking solutions and can put you in touch with their network of finance and industry specialists.

Matrix Security is a business founded on protecting the people, buildings and communities they inhabit, developing solutions tailored specifically to meet the needs of their clients. “For our commercial customers, our security solutions focus on supporting the proper functioning of the business, ensuring business premises, infrastructure and staff have continuity. For residential customers, security extends to ensuring their family, home and assets are safe and secure,” says CEO Scott Carter.

 bnz.co.nz

 matrixsecurity.co.nz

With the largest local presence of any broking company in New Zealand, Crombie Lockwood is entrusted with the protection of thousands of businesses throughout the Country. Their focus – “To protect your business and all it provides to you, your family, your staff and their families.”

More than just accountants, RSM are partners with their clients on their growth journeys. They bring the best of local expertise combined with the 6th largest international accounting network of independent audit, tax and advisory firms.

They might be the 10th largest accounting group in New Zealand but they’re as much at home with our smaller clients, as they are in the boardrooms of our largest clients. It’s all about the power of being understood.

 crombielockwood.co.nz

 anz.co.nz

 rsm.global

Bayleys Real Estate is New Zealand’s largest full service real estate company and has enjoyed a long standing relationship with GETBA. Based in East Tamaki for nearly two decades, they have provided real estate and property services to this high performing industrial precinct and look forward to continuing this into the future.

Goodman is an established business with a premium property portfolio and quality customer base. With property assets of over $2.6 billion, it is New Zealand’s leading industrial and business space provider. With substantial estates, including Highbrook Business Park, M20 Business Park, Savill Link and Westney Industry Park, located throughout South Auckland, it’s a portfolio that offers a range of property solutions for its customers.

Wynyard Wood is proud to have 20+ years involvement in the Greater East Tamaki business community. With their main office in the Highbrook Business Park, they are literally next door. Wynyard Wood has the expertise to provide a full range of legal assistance, including corporate, commercial, property, family, dispute resolution and notarial.

 bayleys.co.nz

 nz.goodman.com

 wynyardwood.co.nz S P R I N G 2 0 1 9 FOCUS ON TRANSPORT & LOGISTICS

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ADVOCACY

SUCCESS IN ADVOCATING ON WATER STRATEGY AND WASTE BYLAWS Auckland Council has been considering a new water strategy and changes to waste bylaws. Feedback from GETBA has resulted in some useful amendments.

Our Water Future The ‘Our Water Future’ Strategy looks to set a framework across all water issues in the region so that the Council is prepared when it needs to make decisions about how to manage water.

A key recommendation arising from the Association’s advocacy is that the Strategy will now include the importance of water for businesses, industries and economic development. Water will also look to be valued for commercial and business purposes alongside other values.

Recognition has been given to finding new water supplies to accommodate population and business growth beyond 2050. Council will also look to work directly with industry and business in developing future planning processes. Further, the Strategy will include a priority to identify revenue sources to pay for water infrastructure that equitably shares the burden of the costs of cleaner water across the community instead of relying just on rates and targeted rates.

Trade Waste Bylaw As all business premises across Auckland discharge waste into the public wastewater system, Auckland Council decided they must all be regulated under 18

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the new Trade Waste Bylaw, either as low risk dischargers, or by being subject to a trade waste agreement.

The Council wanted effective controls in place as they determined that all discharges could have some effect on wastewater pipes, the environment and public health. The Bylaw seeks to reduce these effects by requiring all businesses that discharge waste to meet minimum discharge standards.

Submissions made on behalf of the Association raised concerns that if all businesses were subject to the Bylaw, then the rules relating to low risk dischargers needed to be very clear to avoid these kinds of businesses having to meet higher restrictive standards.

Following feedback, the Council has recommended that the new Bylaw be adopted, but with some minor changes to address these concerns.

In particular, the Bylaw will clarify that unavoidable discharge of rainwater into trade waste systems from low risk businesses does not require a trade waste agreement. New definitions have been added for clarification and completeness.

Additional related information will be included in the Bylaw to better inform low risk business dischargers. Further, the grounds for varying a trade waste agreement have been clarified.

Waste Management and Minimisation Bylaw The new Waste Management and Minimisation Bylaw seeks to manage and minimise waste, protect the public from health and safety risks and nuisance and to manage the use of council-controlled public places.

Of particular concern to businesses was the regulation of kerbside collection bins in retail and high density town centre areas.

Discussions are planned between Council and business associations to identify the reasons for the problem and to work towards a solution. It was also suggested that an ‘Explanation’ be included in the Bylaw setting out in plain English the rules regarding the storage of kerbside collection bins.

Ongoing issues were raised about the ‘zero waste event’ obligations in waste management and minimisation plans and the consequent high operational costs for small scale community events. Again, discussions are planned to work towards a solution.

The waste management and minimisation plans for residential and mixed-use multi-unit developments were also raised as a concern. Of importance has been recognition that these plans be drafted to cover the needs of businesses in mixeduse multi-unit developments as well as other businesses adjacent to these developments.

Ongoing advocacy As Auckland Council looks to develop future strategies or bylaws, GETBA will ensure the interests of its members are made clear to the Council.

GETBA‘s submissions on the above as well as a recent submission on Auckland Council’s proposed Climate Action Framework can be found on the GETBA website.

WASTE MINIMISATION

Compostable Courier Bags: show your customers you care by sending plastic-free

PRODUCT STEWARDSHIP In August, the Government announced a consultation process for the establishment of regulated product stewardship. The consultation period closed on 4 October.

GETBA informed members through our email newsletter and hopefully those potentially affected have been able to give feedback as the proposal has implications for producers and importers of the six proposed priority categories.

Product stewardship is an approach where those that put products on the market are made responsible for the cost of collecting and recycling those products. Typically, this requires Government to pass regulation to ensure that an entire industry sector takes part, and to ensure that imported products are treated in the same way as New Zealand-made products. In New Zealand to-date product stewardship schemes have been voluntary, such as Fisher & Paykel’s appliance collection and recycling scheme.

Product stewardship has been put in place in many countries throughout the world.

In the European Union, for example, all producers / importers of electronic equipment (computers, TVs etc) have been required to provide free collection and recycling of their products for the last 15 years.

There are variations on how to approach product stewardship. For example, a bottle deposit scheme administered by the beverage industry is a type of product stewardship scheme. The first step towards creating compulsory product stewardship schemes in New Zealand is for a product, or group of products, to be declared as a ‘priority product’. The Ministry for the Environment has proposed declaring six priority product groups: tyres, electrical and electronic products (including batteries), agrichemicals and their containers, refrigerants and other synthetic greenhouse gases, farm plastics, and packaging (beverage containers, singleuse plastic packaging).

The Government proposes a co-design approach to establishing regulated product stewardship schemes for these six product groups under the Waste Minimisation Act 2008. They also propose a set of guidelines for how schemes should be run and what their expected outcomes will be.  mfe.govt.nz/consultations/ priorityproducts

On 25 September, at the WasteMINZ Conference, Associate Minister for the Environment Eugenie Sage further announced that work is underway to develop a beverage container return scheme (CRS). Supported by Government funding of nearly $1 million ($966,000) from the Waste Minimisation Fund, Auckland Council and Marlborough District Council will work with the Ministry for the Environment and representatives from the beverage, packaging and recycling industries, councils, retailers, charitable organisations, Māori, consumer representatives, and product stewardship groups on the design and development of a national CRS.

Voluntary Product Stewardship Taking a voluntary approach, and to frontfoot the potential regulatory changes, the Sustainable Business Network (SBN) is on a mission to increase the number of businesses offering take back schemes in New Zealand, and to then promote those organisations who offer them – a starting point for a more circular economy.

On 22 October SBN will be running a free workshop in Auckland aimed at helping businesses offer end of life take back schemes.

The workshop will provide insights from businesses who are already running successful product stewardship campaigns, highlight the best tools to establish your business’ product stewardship potential, build a business case and begin the process.

Then next year SBN will run a communications campaign getting businesses to ask when they procure products ‘what do I do with this at the end of its life?’ and then direct people to those businesses that have a take back scheme.

East Tamaki business EcoBags, under their consumer goods brand Ecopack, have released new compostable courier bags – an environmentally friendly alternative to traditional plastic courier packs.

These new Ecopack courier satchels are made with corn starch and are 100% compostable – certified for both home and commercial compost – and leaving behind no harmful residues in the process. After use, you can simply peel off the label and throw the packaging in your home compost bin.

Ecopack’s first generation of compostable courier bags were green and are still available in A4 and A5 sizes. The second generation of the product – a thicker, white courier satchel – is available now in A3 and DLE sizes. A4 and A5 versions are in production.

The new white compostable range features a second seal strip so each courier pack can be sent a second time (excludes DLE) making these an even smarter, sustainable choice for local businesses.  Purchase online at ecobags.co.nz

GETBA Waste Advisory Service Want to reduce your business’ waste to landfill or to find solutions for significant or problematic waste streams?

GETBA has received funding to pay an environmental consultancy to undertake free waste assessments within our business precinct. No fish-hooks, just the opportunity to assess and get a report on your current waste and recycling output and identify waste minimisation opportunities.

This will only take 30-45 minutes and may result in a cost saving and a lower carbon footprint for your business.

Contact Karen Hadley on 273 6274 or email operations@getba.org.nz

 sustainable.org.nz S P R I N G 2 0 1 9 FOCUS ON TRANSPORT & LOGISTICS

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HAPPY 50TH BIRTHDAY FRASER THOMAS

Delighted Fraser Thomas staff, taken soon after moving into new Highbrook premises, April 2017

Planning, surveying and engineering consultancy, Fraser Thomas Ltd, celebrates its 50th Anniversary of being in business this year.

History The company originally formed in 1969 following the merger of two existing firms – Fraser & Thomas, an engineering practice based in Papatoetoe, and Jackman, Gunman & Partners, a surveying company based in Otahuhu. Jackman, Gunman & Partners’ origins stretch back to 1947, with the establishment of a small surveying company in Manurewa by Ray Jackman.

After forty-eight years in the original building (albeit altered and added to over the years) in Papatoetoe, the company relocated their Head Office to more modern accommodation in El Kobar Drive, Highbrook and is enjoying being part of the GETBA community.

In the 1980’s, Fraser Thomas expanded its services to include Geotechnical Engineering, and established the International Department, which has since gone on to work in over 20 countries in Asia and the Pacific, covering water resources, rural infrastructure, urban development and roading development projects.

Fraser Thomas also owns a medium-sized surveying and engineering company, Barry Satchell Consultants – acquired in 1991 – which has an office on New North Road 20

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servicing the Central Auckland market, offering survey, civil engineering and planning services with particular expertise in relation to multi-story buildings.

During 2010-11 Canterbury experienced a horrific series of earthquakes starting with a 7.1 magnitude earthquake in September 2010. In response to these earthquakes Fraser Thomas provided consulting services, initially to assist the EQC and insurance companies in their earthquake damage assessment works. The initial involvement was on a fly-in/fly-out basis. Eventually a permanent office was set up in Christchurch in February 2013 following the sequence of earthquakes. Since then the office has grown to 14 permanent employees, offering engineering and land surveying services to our South Island clients.

This year has also seen our presence expanded to the regions with branches opening in Napier and Cromwell.

Services offered Today the company offers a full complement of services, including civil, geotechnical, structural and environmental engineering, as well as surveying and

planning, contaminated land management and asbestos building surveys.

For our commercial/industrial clients, we offer specialist expertise in flood risk assessments, building seismic assessments, stormwater treatment, environmental management plans and industrial and trade process consenting.

The Future Whilst technological advances, legislative changes and the obvious need to produce more environmentally sustainable outcomes have changed the face of the work carried out by Fraser Thomas, building strong relationships with our clients and the commitment and dedication of our staff to get the job done to the highest standard hasn’t changed.

As is tradition, the milestone has called for several birthday celebrations throughout the year (including cake). Managing Director Greg Maddren, says “It has been great to catch up with former Directors and current clients of the company at these events. The longevity of the company is testament to the quality of the service we have provided and shall continue to provide to our clients on projects both within New Zealand and overseas.”  fraserthomas.co.nz

WELLBEING

The benefits of practising mindfulness

The benefits of a mindful workplace

There are numerous studies supporting the benefits of mindfulness. Incorporating mindfulness into your company culture can provide you with numerous benefits, which include: • Greater employee engagement • Improved ability to focus • Enhanced ability to manage stress and cope with change

By Kim Ahern, Pod Consulting

Do leaders within your business operate mindlessly or mindfully? When they’re frustrated or under pressure, do they react based on their emotions, or do they step back, pause and take a minute to respond appropriately? Do your leaders push to be heard when others disagree with them, or are they open to other perspectives?

Mindfulness is a hot topic right now, with more and more individuals and workplaces, such as Google and Twitter, jumping on the mindfulness train and reaping the benefits.

Yet, even with comprehensive research supporting mindfulness programmes, many workplaces are yet to embrace the practice.

Is it because it’s seen as ‘nice-have’ for companies who can afford it, or that some believe it’s linked to religion and is too spiritual? Are they nervous they will need to sit cross-legged and learn to levitate?

So, what exactly is mindfulness and how can it benefit your workplace?

What is mindfulness?

Mindfulness is simply about being present – having present-centred attention and awareness – which means the individual

is not dwelling on the past, or worrying about the future, they are simply fully concentrating on the here and now.

It is a psychological process, not a religious one. Practicing mindfulness makes us more self-aware (a core skill in effective leadership), forcing us to effectively selfmanage and self-regulate our behaviour.

With modern society constantly having us running around in ‘go’ mode, pressuring us to do more with less, self-regulation and self-management are often forgotten about which negatively impacts our decisionmaking, problem-solving, leadership skills and our ability to innovate. Using mindfulness, we are provided with the tools we need to operate in a manner more consistent with our values, and at a pace more appropriate to a healthy, successful outcome.

Workplace mindfulness is when an employee is being mindful in their work, taking in what is happening in the workplace but not reacting to it. The mindful employee approaches both their work and workplace relationships in a non-judgemental manner. This allows for greater empathy, well-being and enjoyment, which ultimately impacts employee performance. It also permits individuals to respond more appropriately to given situations, rather than acting on emotions.

• Improved productivity • Decreased absenteeism and turnover • Increased innovation and creativity • Increased self-aware and enhance emotional intelligence • Boosts to working memory Mindfulness increases self-awareness, empathy, compassion, courage and resilience, all of which are essential leadership qualities. Leaders who have these qualities are better able to support a company through the changes and challenges businesses experience.

We all know leaders create and largely impact the company culture. Great leaders do their jobs well by inspiring others to perform their best and take responsibility, modelling the company values, and displaying empathy and compassion towards others.

Using mindfulness, you can not only develop yourself as a leader, but those around you, having a greater consciousness of what is going on in the present which is vital for a good leader.

Want to introduce mindfulness or learn more?

As we’ve mentioned, introducing mindfulness at your workplace can provide you with numerous benefits, including decreasing stress, promoting productivity and positively impacting your company culture.

Mindfulness is simply about being present

As well as our own Mindful Leader programme, we also offer a range of Ovio Mindfulness programmes as part of our offering at POD Consulting.  pod.co.nz

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CRIME PREVENTION

CHALLENGE 2 CHANGE CHANGES LIVES Challenge 2 Change is a joint initiative run between Youth Workers from the Salvation Army and sworn Police Officers from Counties Manukau East Police Youth Aid. The 8-week programme, that culminates with a 4-day adventure camp at National Park, is based around empowering the 14– 17 year old male attendees to make better decisions and choices through activity-based learning, team work and skill sessions.

The programme is run with separate intakes in terms 1, 2, and 3 of the school year, and to date has seen 35 young men graduate over a calendar year. The initiative takes at-risk young people who have been involved in offending, or are showing signs of heading that way, and providing them with a positive intervention to make changes in their lives.

One such boy is Marcus* who was referred to Challenge 2 Change by his Youth Aid Officer as part of an Alternative Action Plan because he had been joyriding in a stolen car. Marcus lives in Otara, and at the time he came to Police attention, his Dad was in jail, and his Mum, who was passionate about seeing her son succeed, was struggling to keep him motivated to stay in school.

He had many friends across a wide range of groups and had so far resisted getting involved with serious offending and gangs as many other young people he knew had.

Proudly supporting

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Marcus embraced the opportunity he was given with Challenge 2 Change and quickly established himself as a leader amongst the young men in his intake. After graduating, Marcus’ mother detailed that he came out of the programme with a clear direction, having decided he wished to follow in his Uncle’s footsteps and join the Navy after finishing school, which he has now become focussed about achieving at, and completing.

Pleasingly, Marcus also approached the facilitators of Challenge 2 Change and returned to the following term’s intake as a mentor for the next group of young men coming through, and his influence and guidance assisted greatly with that intakes success.

When Counties Manukau East Youth Aid were subsequently approached by Howick Lions Club looking to offer a young person for an extremely generous sponsorship package to attend a 21-day Outward Bound experience in the Malborough Sounds in January 2019, Marcus was put forward amongst other young men, as a nominee.

Marcus was chosen for Outward Bound and enjoyed an amazing experience in January. He then presented on his experience to Howick Lions Club at a dinner they hosted.

During his presentation, Marcus made special mention of Challenge 2 Change and how it had positively impacted on him to create goals and direction for himself. He explained that without it, he didn’t think he would be in the same place he was, and was thankful for the experience and things he had learned as a result of being a Chanllenge 2 Change participant. *Name has been changed

PROPERTY UPDATE

Green Star performance rating

Highbrook Business Park Progress Welcoming new business New customers that have chosen Highbrook as their business location in the last 12 months include: • Kaikaha, Techtronic Industries NZ Limited, KiwiHarvest NZ Limited, NSK New Zealand Limited, Uniline, Heartland Bank (Marac), Sakura Filters who have all leased facilities in the Parade Units on Business Parade South.

• K & S Freighters has leased the Kerwyn Ave warehouse that was previously the home of Cottonsoft. In 2018 Cottonsoft expanded into Spicers previous facility and Spicers now have a purpose-built facility next to Metro Performance Glass.

• Fusion Workplace Services Limited has expanded into Unit C of the Highbrook Drive multi-units.

• JOST, Premium Apparel, Mercury Marine and FDM have all leased warehouses in the award-winning Gateway development.

• Finesse Residential has moved into Building 2 and taken signage rights.

• Active Healthcare (NZ) limited has leased Unit A of the El Kobar Units which are under construction on Highbrook Drive.

• Nisbets has leased Plytech’s previous building on Business Parade North, and Plytech has moved across the road into a larger purpose built facility.

RSM House Accounting and Business Advisory Firm RSM has taken naming rights over the commercial building that neighbours The Brook and Goodman’s Management office, previously Building 5. RSM House (as it’s now called) is also home to Barfoot and Thompson, Madison Recruitment, Public Trust and Skills Organisation.

435,000 sqm OF INDUSTRIAL AND BUSINESS SPACE

Goodman is undertaking a Green Star Performance Rating of five buildings at Highbrook (in conjunction with NZ Post and Panasonic). The pilot study will assess the effectiveness and benefits of the new rating system.

The Green Building Council launched the green star performance tool to assess the operating performance of existing buildings. It includes criteria for energy and water, waste, and work space quality.

It provides a credible and independent certification of the energy efficiency and environmental performance of an individual building that can be aggregated to a portfolio level. Unlike the Design and As Built Green Star ratings available for new buildings the Performance measure aims to benchmark an existing property / portfolio while providing a framework for continual improvement.

Partnering with customers will provide the opportunity to optimise these buildings, improving the performance and / or lowering the operating costs for customers. It is also expected to identify further opportunities to upgrade building systems with capital projects targeting energy and water efficiency.

It’s a three-year project that will ultimately improve the environmental performance of these buildings, creating better quality workspaces for the people that work in these businesses.  highbrook.co.nz

40 ha

OF ADJOINING PARKLAND AND RESERVES

100

LEADING BUSINESSES

5,000

STRONG WORKFORCE

• FedEx Express NZ has leased Schneider Electric (NZ) Limited facility and Schneider has moved into the newly completed Building 6 on Highbrook Drive along with Kia Motors New Zealand Limited.

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BAYLEYS: EAST TAMAKI INDUSTRIAL MARKET

The development sector has responded to tight market conditions, however this response is hindered by both the a shortage of land and, where land is available, the cost of land.

With interest rates declining, from already low levels, both in New Zealand and internationally the demand for higher yielding investment assets has increased.

Industrial property has proved to be one of the favoured options and as a result ongoing yield compression has seen capital values rise.

East Tamaki vacancy East Tamaki’s industrial area is one of the largest of the region’s established precincts, with approximately 1 million sqm of space included within the Bayleys Research 24

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EAST TAMAKI INDUSTRIAL VACANCY Source: Bayleys research 8% 7% 6% vacancy rate (%)

Auckland’s powerfully performing economy which has driven business expansion and job creation has seen demand for industrial workspace continuing to outstrip new development. As a result, vacancy rates across the region have declined to historic lows placing upward pressure on rentals.

5% 4% 3% 2% 1% 0% 2014

2015

2016

Industrial Vacancy Survey. The precinct houses a diverse range of businesses and therefore the precinct’s survey results provide a good indication as to how business, and the property market is performing.

As at the date of the 2019 Bayleys Research Industrial Vacancy Survey, just 1.3% of the precinct’s inventory was physically vacant – the lowest recorded in the current cycle and below the regional average of 1.7% which is itself at a

2017

2018

2019

historically low rate. With the exception of 2017 and 2018 when the date of survey coincided with some short term vacancies a vacancy rate of under 5% has been the norm, with the average rate since 2014 sitting at approximately 2.1%.

At 1.3% the quantum of vacant space, within the survey area, is just under 12,500 sqm, this space however was spread across multiple buildings with only one vacancy of over 2,000 sqm recorded.

Development sector response

AUCKLAND REGION INDUSTRIAL BUILDING CONSENT (BY FLOOR AREA)

floor area consented (sqm)

Source: Statistics New Zealand

Industrial property development has ramped up significantly over recent years as pressure on the market has increased. Over the 12 months to July 2019 building consents issued for industrial development reached a new high with just short of 570,000 sqm of space being consented. The latest figures topped the pre-GFC high of approximately 500,000 sqm recorded in 2005. Over the last five years consents for over 1.75 million sqm of development have been approved.

600,000 500,000 400,000 300,000 200,000 100,000

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

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2003

2002

2001

2000

1999

1998

1997

1996

1995

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HOWICK WARD INDUSTRIAL BUILDING CONSENT (BY FLOOR AREA) Source: Statistics New Zealand floor area consented (sqm)

Development within the Howick Ward area, in which East Tamaki’s industrial precinct is located, has seen strong development activity over the last two years supported by the fact that the Highbrook Business Park has had development land available; something which has become increasingly rare within the region’s other established industrial precincts.

In the year to July 2018, over 100,000 sqm of new industrial development was consented within the ward and although activity has eased subsequently, the 12 months to July 2019 figure of just over 53,000 sqm shows that demand for space remains strong.

Looking to the longer term, like other areas, a lack of development land will become a constraint within East Tamaki as, even within Highbrook industrial development is likely to reach capacity by 2021.

1992

1991

0

120,000 100,000 80,000 60,000 40,000 20,000 2012

2013

2014

2015

As the returns on risk-free investments have fallen, investors seeking higher yields have been forced to seek alternative assets, with commercial property becoming one of the favoured vehicles.

Investment demand strengthens The Reserve Bank of New Zealand lowered the OCR to 1% in August from an already historically low 1.5%. A majority of commentators expect further reductions over the course of the next 12 months as rates trend down internationally.

2016

2018

2017

2019

and commercial office, returning double digit returns over 1, 3 ,5 ,10 and 15 years according to statistics released by MSCI.

The competition for industrial assets has resulted in yield compression thereby lifting capital values; this in concert with the upward pressure on rentals which has been brought about by historically low vacancy rates, has lifted total investment returns.

Yields have tracked interest rates lower over recent years with the median yield generated by sales of industrial property across the Auckland region currently sitting at just below 6% according to the Bayleys Research industrial yield index. Given the reduction in interest rates, further slight reductions in yield rates are possible which will support capital values.

Over recent years industrial property has outperformed the other major sectors, retail

 bayleys.co.nz

NZ INVESTMENT RETURNS INDUSTRIAL PROPERTY Source: MSCI Capital

Income

Total

20.00

15.00

5.00

0.00

-5.00

Jun 19

Mar 19

Dec 18

Sep 18

Jun 18

Mar 18

Dec 17

Sep 17

Jun 17

Mar 17

Dec 16

Sep 16

Jun 16

Mar 16

Dec 15

Sep 15

Jun 15

Mar 15

Dec 14

Sep 14

Jun 14

Mar 14

Dec 13

Sep 13

Jun 13

Mar 13

Dec 12

Jun 12

Sep 12

Mar 12

Dec 11

Jun 11

Sep 11

Mar 11

Dec 10

Jun 10

Sep 10

Mar 10

Dec 09

Jun 09

Sep 09

Mar 09

Dec 08

Jun 08

Sep 08

-10.00 Mar 08

annual return (%)

10.00

S P R I N G 2 0 1 9 FOCUS ON TRANSPORT & LOGISTICS

25

It’s not enough to wish for greatness.

Greatness is not a singular pursuit, nor is it one that is easy to reach.

At Goodman our vision is to make it possible for everyone by making space for it, in everything we do.

We give our customers the space they need to succeed, by providing high-quality property solutions in strategic locations.

El kobar Units Highbrook, East Tamaki

Business Parade Nth 3,100 Highbrook, East Tamaki

2 high profile units in Highbrook

High profile and close to amenity

Available now Available Jan 2020 Unit C

Available now Available Dec 2019

Unit A – Leased

Unit B

H ig Subject to final design

hb r ook

b El Ko

ar D

rive

Bruno Warren

021 506 010

offices

DEVELOPMENT MANAGER

bruno.warren@goodman.com

s in

es s

Driv e

1,400–1,500 sqm 350–370 sqm 417–423 sqm warehouses

Bu

yards

William Main

DEVELOPMENT DIRECTOR

021 583 887

william.main@goodman.com

Pa ra

de

Nth

3,130 sqm warehouse Bruno Warren

021 506 010

Subject to final design

400 sqm

DEVELOPMENT MANAGER

bruno.warren@goodman.com

930 sqm

office

William Main

yard

DEVELOPMENT DIRECTOR

021 583 887

william.main@goodman.com

goodmanproperty.co.nz

MSFG Video

highbrook.co.nz

There’s space for you here.

Highbrook Video

0800 375 6060 For warehouse developments contact:

Bruno Warren

William Main

DEVELOPMENT MANAGER

william.main@goodman.com

bruno.warren@goodman.com

Underwood 1,000 Highbrook, East Tamaki

DEVELOPMENT DIRECTOR

021 583 887

021 506 010

Building 6, Highbrook Crossing Highbrook, East Tamaki

Contemporary design and space Brand new and high profile Available Nov 2019

Available Now

H igh

o d St Underwo

Subject to final design

826 sqm warehouse Bruno Warren

021 506 010

197sqm office

DEVELOPMENT MANAGER

bruno.warren@goodman.com

198 sqm

William Main

yard

DEVELOPMENT DIRECTOR

021 583 887

william.main@goodman.com

broo

k Dr ive

At the centre of Highbrook with excellent brand exposure on Highbrook Drive.

Join Kia and Schneider.

260 – 1,000 sqm office

Evan Sanders

PORTFOLIO MANAGER

021 82 6462

evan.sanders@goodman.com Robyn Barfoot

ASSET MANAGER

021 428 446

robyn.barfoot@goodman.com

This document has been prepared by Goodman Property Services (NZ) Limited and has been prepared for general information purposes. Whilst every care has been taken in relation to its accuracy, no warranty is given or implied. Further, you should obtain your own independent advice before making any decisions about any of the products and/or properties referred to in this documents. All values are expressed in New Zealand currency unless stated otherwise.

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