Waikato Business News September/October 2017

16 WAIKATO BUSINESS NEWS September/October 2017
BAY NEWS
Apartment living a feature of $100
million Farmers redevelopment
The $100 million-plus redevelopment of
Farmers Tauranga operations will bring a
very different look to its long-established
“corner” on Elizabeth Street and Devonport
Road.
By DAVID PORTER
As well as creating an
8000 sqm retail footprint,
the new building
will also include around
70 apartments, ranging in
size from 100 sqm to 25 sqm,
which will be for sale.
Under the current plans,
there will be two levels of retail
above ground, and seven
to eight levels of apartments,
subject to design development
and resource consents, which
are expected to be lodged by
the end of the year.
A strong retail offering
is an important part
of any city centre,
and it’s great to have
an experienced, long
term-focused investor
with a strong brand
like the James Pascoe
Group seeing the
value of Tauranga’s
city centre.
A pool, tennis court and
garden areas have also been
earmarked for the development.
At this stage, plans include
400 car parks on five
levels, with one or two underground
and three to four levels
above ground. Apartment buyers
will also be able to acquire
a car park space.
“We intend to sell the apartments
to the public, and none
will be held to rent,” said Brett
Nicholls, a spokesman for the
family-owned James Pascoe
Group, which owns Farmers
and Elizabeth Properties, the
subsidiary that holds the site
and is managing the redevelopment.
“The sale of the apartments
is not integral to the financing
of the development,” he said.
“The intention is to optimise
the site’s potential for the
benefit of Tauranga and the revitalisation
of the CBD. High
quality, attractive mixed-use
developments like this one are
a key way of attracting residents
and shoppers back in to
the central city. We want the
heart of Tauranga to be strong
once again.”
Farmers will move temporarily
to Tauranga Crossing
during the rebuild, which is
expected to take about two
years.
Nicholls said 6000 sqm of
the retail space was likely to
be used by companies related
to the James Pascoe Group,
including Stevens Homeware,
Whitcoulls and Pascoes the
Jewellers. But there will be a
further 2000 sqm provision
available for other tenants.
The group will retain ownership
of the retail and the retail
car-parking spaces, as was
its usual practice, said Nicholls.
“That is all the more reason
why we want this to be
an attractive, high-quality
building that will last. We’re a
family-owned Kiwi company,
and for us it’s important to be
proud of what we do.
“We have been in Tauranga’s
CBD for around 50 years
and we believe that the CBD
has an exciting future. We’re
backing that belief with a major
investment. We have faith
in Tauranga and we’re here to
stay. We want the people of
Tauranga to be really proud of
Farmers’ spokesman Brett Nicholls:
We want the heart of Tauranga to be
strong once again.
this development and want it
to act as a catalyst for further
revitalisation of the CBD.”
Business and city leaders
have welcomed the redevelopment.
Tauranga mayor
Greg Brownless said his conversations
with the Farmers
developers indicated a potentially
impressive building that
showed a strong commitment
towards the growth of the city
centre.
“In fact, I believe the development
will exceed expectations
simply because of the
size of the site and the commitment
of Farmers to increase
their presence in downtown
Tauranga, said Brownless.
“A project of this size will
have a positive impact on the
economy and the vibrancy of
our city. It will surely raise the
bar for city retail experiences.”
Priority One chief executive
Nigel Tutt said the redevelopment
was a major project
that will not only bring
economic benefit to the city
centre, but also vibrancy and
confidence for businesses and
shoppers alike.
“A strong retail offering is
an important part of any city
centre, and it’s great to have
an experienced, long term-focused
investor with a strong
brand like the James Pascoe
Group seeing the value of Tauranga’s
city centre.”
Tauranga Chamber of
Commerce chief executive
Stan Gregec said the development
would be “a real shot
in the arm” for the CBD - in
particular in the Farmers corner
area.
“There has been quite a bit
of redevelopment announced
for further downtown, with
the Westpac redevelopment,
the council’s heart of the city
planning, the new Trustpower
building opening and the
planned University of Waikato
campus,” he said.
“It’s great to see there will
be a mixed retail/apartment
development on such a scale
contributing to the city’s vitality
at the other side of the
CBD. This will take our retail
offering up another notch.”
Main Street Tauranga
spokesperson Sally Cooke
said the development would
be significant for downtown
Tauranga.
“It adds to the exciting list
of major developments that
will transform the city centre.
For our members this can only
be good news as it will contribute
to the revitalisation of
the city centre bringing more
people to live, work and shop
in the city centre.”
Local urban design and
landscape experts are having
input into the project, with a
focus on ensuring the building
has been designed to respect
and respond to the local context
and environment.
“The building is being developed
for Tauranga City
and its unique vibe and environment,”
added Nicholls.
“The design will complement
the CBD’s public spaces and
streetscape interface.”
GEOTECH CONSIDERATIONS
Preliminary geotech investigations have not indicated
any issues with the basement excavation and building
construction on the sloping site.
Part of the site has already been subject to basement
excavation associated with the existing buildings.
A team of experienced geotech, structural and
archaeological consultants will provide ongoing oversight
and advice through the design and construction phases.
China’s consumer shift offers opportunities
By RICHARD RENNIE
The mammoth shift in
China’s economy from
one of being investment
driven to consumption led has
smarter, better fed, wealthier
consumers bringing huge opportunities
for New Zealand
companies in their wake.
Sam Shih, former chief executive
of PepsiCo in China
and now head of Asia Pulp and
Paper, outlined some of the
most significant shifts in his
home country to delegates at a
recent Zespri-sponsored China
business summit in Tauranga.
“The growth in consumption
is really being pushed by
the government,” says Shih.
“Total consumer expenditure
last year was NZ$7 trillion
and growth has been double
digit, almost double what GDP
growth has been,” he said.
It is predicted by 2021 consumer
expenditure will exceed
$10 trillion.
“There is a more selective
consumer mindset now. Their
priorities are on improving
their quality of life, aiming to
be healthier. Brand awareness
is also on the high premium,
high quality health brands.”
Shih says the key areas
of consumer expenditure are
transport, holiday expenditure,
leisure-entertainment, financial
services and pharmaceutical
products.
But the growth had also
been accompanied by some
seismic shifts in purchase behaviour
as more consumers
bought products online, rather
than in traditional bricks and
mortar stores.
“We are seeing a lot of companies
that have been successful
in the past now experiencing
negative growth. They may
have invested heavily in buying
shelf space. But now if I am
a Chinese company with a new
product, I can put my product
on line, so the competition has
increased significantly.”
The ability of Chinese manufacturers
to produce better
quality products had also improved
significantly in recent
years, said Shih.
The desire to consume high
quality food products from a
known safe brand like Zespri
put the kiwifruit marketer in a
strong position in China.
However, ex-World Bank
economist and agri-food expert
Dr Anning Wei warned that
the odds of a “Huawei” like
disruptor potentially emerging
in the kiwifruit market could
mean all that bets are off on
future growth.
The Huawei communications
company has proven to
be a disruptor among established
players like Samsung
and Apple. It is now China’s
largest private exporter, accounting
for US$39 billion of
sales offshore, and experienced
a massive 70 percent growth in
2015 alone.
Dr Wei said it was quite possible
following recent changes
in land acquisition rules that a
similar disrupter could emerge
in Zespri’s market.
“No one can own land in
China you have the right to
farm it not to sell it and often
parcels are very small. However
that has changed and now
you can buy the rights to run
more land, without having to
buy others out of it, and you
can aggregate your holding
quicker meaning you can get
bigger quicker.”
China is already the world’s
biggest kiwifruit producer,
but almost all of the fruit is
consumed within the country.
It currently has 100,000ha of
kiwifruit under cultivation
compared to New Zealand’s
14,000ha, and China was expected
to be capable of exporting
fruit within the next five
years.
Sam Shih: China is pushing
domestic consumption. Credit:
Jamie Troughton, Dscribe Media.
“Zespri is good, but you
need to be aware of these sorts
of challenges emerging.”