Primary export growth lifts demand for industrial property

Calder Stewart says growth in New Zealand's primary exports is lifting demand for industrial property projects, and its forward development programme could double over the next three to five years if planned work proceeds.

Ministry for Primary Industries forecasts put food and fibre export revenue at $62 billion in the year to 30 June 2026, about 3 per cent above the previous year and around 16 per cent higher than two years earlier. Calder Stewart says that increase is feeding through to demand for logistics facilities, cold storage and distribution assets linked to dairy, meat, forestry and horticulture.

Ben Stewart, Calder Stewart's director of property, said the company had delivered more than $1.5 billion of property projects in the past three years, including more than 750,000 square metres of industrial buildings nationwide. Confirmed projects in the current pipeline could push the next phase of work to roughly twice that level, he said.

"When primary production is strong, the entire food supply chain needs staging, temperature-controlled storage and distribution capability. Cold storage is one of the most active areas of investment, particularly off the back of dairy and meat export growth," Stewart said.

Demand is spread across both islands, with Auckland and several South Island locations standing out. In Auckland, activity is coming not only from exporters but also from retailers and trade suppliers reshaping their distribution networks.

Shift in warehousing

One example is a new automated distribution centre for NZ Safety Blackwoods at Drury South Crossing. Calder Stewart developed the 18,000 square metre site, which consolidates four North Island operations into one hub and uses robotic storage and retrieval systems.

NZ Safety Blackwoods, owned by Wesfarmers, supplies safety equipment, engineering consumables and industrial products to customers in construction, manufacturing and infrastructure. Stewart said the project reflects a wider shift in industrial property, with occupiers moving away from smaller sites to larger, more centralised facilities.

"We're seeing smaller distribution sites consolidated into larger, centralised hubs. At the same time, businesses are investing more heavily in automation and focusing on efficiency and resilience," Stewart said.

He said the distribution centre also underlines the role industrial assets play in the construction supply chain.

"Construction sites rely on consistent access to safety equipment and essential consumables. When supply chains work well, productivity improves across the sector," Stewart said.

Calder Stewart sold the Drury asset to FortHill Property for $66.5 million in late 2024. Stewart said the property is expected to be revalued closer to $70 million after its first valuation cycle, pointing to continued investor demand for modern industrial assets tied to essential parts of the economy.

"This is one of the largest industrial expansions in New Zealand. When companies commit capital at this level, particularly into automation, it reflects long-term confidence in demand and in the strength of the construction pipeline," Stewart said.

Land constraints

Land supply is also shaping development decisions, especially in Auckland's established logistics corridors. Stewart said limited availability of greenfield sites in strategic locations is pushing businesses toward larger facilities that make more efficient use of existing sites.

"We're seeing consolidation into newer, larger facilities as occupiers look to improve inventory management and operate more efficiently. Automation is increasing storage density and speeding up fulfilment, and that is reshaping how warehouses are designed," Stewart said.

He added that taller warehouse formats are becoming more common as occupiers seek to expand upward rather than outward. High-bay and ultra-high-bay buildings, he said, are allowing operators to store more inventory on constrained sites.

"With limited greenfield sites coming online in strategic locations, opportunities to secure scale do not arise frequently, and when they become available, businesses tend to act quickly.

"With land scarce, building up makes sense because automation allows higher-density storage while maintaining efficiency," Stewart said.

Workforce growth

Calder Stewart employs more than 500 people nationwide and could increase headcount by 15 to 20 per cent if activity continues at the projected level. Stewart said that would amount to roughly 75 to 100 additional roles across project management, engineering, construction and support functions. Large builds also support subcontractors and specialist trades in regional markets.

The company holds about 900 hectares of industrial-zoned land across New Zealand, which it says gives it room to respond as occupier demand emerges.

"These are long-term infrastructure decisions, and when businesses commit to facilities of this scale they are backing sustained economic activity that can also help attract other large players into the market," Stewart said.