Big developers look towards Hawke’s Bay

3:51 PM Friday July 6, 2018 True Commercial

The 6.1ha development site on Te Aute Rd sold to Ryman Healthcare is indicated by a blue border. Photo / Supplied

Hawke’s Bay development land is in hot demand among national developers, with a string of substantial sites being snapped up in recent months.

Cam Ward, managing director of Colliers International Hawke’s Bay, says the region’s economic success is driving strong interest from outside the area.

Colliers’ significant recent sales have included the site of Ryman Healthcare’s $100 million retirement village development in Havelock North; a substantial 9ha tract of future residential land in Awatoto, Napier; and a prominent corner development site on a prime Hastings retail strip.

“The Hawke’s Bay property market continues to go from strength to strength, underpinned by the success of the wider regional economy,” Ward says. “Steady population growth is driving demand for new and existing housing, leading to the strongest house price growth of any region for the last two quarters.

“The rural economy is also humming, with robust returns forecast for the horticulture, sheep farming and forestry sectors.

“The primary sector’s strength is driving growth in the industrial property market, which is experiencing strong demand for quality distribution and production facilities.

“Against this backdrop, we’ve been witnessing strong interest from national investors and developers. This has translated to a number of substantial land transactions in the first half of 2018.”

Colliers’ brokered the sale to Ryman Healthcare of a 6.1ha development site on Te Aute Rd, Havelock North. The NZX-listed company plans to transform the site into a $100m retirement village, which it estimates will create 100 jobs and pump $10m a year into the local economy.

Danny Blair, who brokered the sale with colleague Peter Chrisp, says the village will service the region’s growing retiree population.

“Hawke’s Bay is home to an ageing demographic, and is also an attractive retirement destination due to its sunshine, lifestyle and amenities.

“As a result, the region is forecast to need 3340 more retirement units over the next 30 years. The new Ryman Healthcare village will go some way towards meeting this demand, but much more development will be needed in the long-term.”

Chrisp says developers will continue to seek greenfield sites that offer good infrastructure capacity, proximity to established communities, and efficiency of size and scale.

“However, the scarcity of such sites — particularly with favourable zoning — means they will remain hotly in demand.”

Chrisp says demand for residential development land will also remain robust. “The population is growing, with Napier and Hastings expected to increase by more than 15,000 residents in the next 30 years. New residential areas are springing up around these centres to cater for demand.”

Chrisp points to the coastal suburb of Awatoto, some 6km from Napier.

“Traditionally an industrial area with a small resident population, Awatoto is undergoing a residential development boom due to its panoramic sea views, proximity to Napier, and abundant lifestyle offerings.”

Chrisp recently brokered the sale of three freehold titles at 136, 156 and 160 Eriksen Rd, Awatoto, to a national developer.

The 9.05ha site is directly adjacent to two other subdivisions — one completed, and the other currently being marketed to individual homeowners.

Retail and commercial development properties also remain in demand.

Colliers recently brokered the sale of 1143 Heretaunga St West, Hastings, which was formerly occupied by a Caltex service station.

Blair says the high-profile corner site, in one of the Hawke’s Bay’s busiest locations, was an attractive buy due to the scarcity of bare vacant land in Hastings CBD.

It was acquired by a private developer from outside the Hawke’s Bay region.

Ward says he expects new listings will continue to be snapped up due to demand for quality development sites.