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- The Influencers

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Andrewe Brown

Peter Townsend

Sam Staite

NZ Trade Group co-founder and managing director

Canterbury Employers’ Chamber of Commerce chief executive

Colliers International, Christchurch director of Industrial sales & leasing

ur country is in the middle of a construction boom with more than 80,000 new homes forecast to be built over the next six years, and the trade sector plays a vital role in this buoyant industry. While activity may be cooling off slightly in Canterbury, the number of building consents in the region is close to twice the amount it was before the Christchurch earthquakes began in 2010, and there's still a significant amount of work to be done. Canterbury's construction industry will benefit from a more sustainable contracting environment – where contractors and trade businesses work together more effectively so that profitability, quality and professionalism can co-exist. New Zealand has somewhat of a dog-eat-dog contracting environment at present where the bottom price is seen as the right price. Healthy competition is essential for all markets, but a sector cannot be healthy when the profits required for investment in staff training and quality control erode through a price-gouge mentality. It's the duty of everyone involved to ensure quality doesn't go out the window at times of high activity. Project managers need to be able to compare apples with apples when it comes to quotes from trade subcontractors, but some tradespeople will quote on low quantity and low quality to provide a low price, and then upsell into the job. Sustainable businesses require good business acumen, including professional, transparent and comprehensive plans and quotes, a good handle on cashflow and margins, reliable job management systems, good relationships, and of course, high quality workmanship. To make the most of Canterbury's still buoyant construction market, strong relationships between all parties involved need to be in place to ensure success. We'd encourage contractors to evaluate pricing as a factor sitting alongside the subcontractor's systems, experience, level of resource, supply channels, and a full knowledge of the costs and scope of the work involved with the project. We'd like to see tradespeople operate with integrity, and be able to stand by what was agreed upon. If we could move the dial more towards this approach, the industry will lift its game, businesses will perform better, contractors will see improved project outcomes, and the trade sector will enjoy more confidence from the public.

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s we complete another calendar year, in another busy rebuild environment, it is worth reflecting on where we have got to and what we have got ahead of us. The Ministry of Business Innovation and Employment (MBIE) has released figures that quantify the rebuild up to the end of June 2015. Things will have moved on a little from then but it gives a good perspective on where we are at. ! Overall MBIE estimate that we are about 45 percent into the rebuild from a construction perspective (with a total reconstruction cost of $33 billion out of total earthquake cost still estimated at $40 billion); ! Of that they estimate that total light commercial construction is 40 percent complete and heavy commercial construction is 25 percent complete; ! They estimate that we are 53 percent through $13.3 billion cost of residential reconstruction with the major damages and rebuilds from a housing perspective still to come; ! Civil construction is anticipated to be halfway through a $6.4 billion repair cost; and ! MBIE further estimate that there is $15 billion left in the rebuild pipeline alone and that it will be somewhere in early 2018 before we reach 80 percent of total rebuild expenditure. All of this means that we have come a long way but we still have a long way to go and there is still more than half of the rebuild ahead of us. Those that are under the impression that the rebuild has peaked should reconsider their position. As we get further into the rebuild it becomes clearer and clearer from a numbers perspective what we have done and how far we have to go. We can guarantee that 2016 will be another year of intense construction and regeneration in greater Christchurch.

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ell-leased industrial properties are still seen by investors as one the most desirable investments in the commercial property market. Although the supply of opportunities has increased in the past six months, the lowering interest rates have further sharpened yields. There is huge interest in such properties and there's no sign of activity slowing. In recent weeks, we've transacted two of the biggest ever industrial deals in the South Island – the largest of which was the $39.525 million sale of Progressive Enterprises Ltd's distribution centre in Hornby, Christchurch to NZX listed Property Funds Manager Augusta Capital. Confirmation of that deal comes hot on the heels of the sale of three buildings incorporating five tenancies at Glassworks Industry Park on behalf of Goodman Property Trust for $38.9 million to a Christchurchbased property fund managed by Mainland Capital. All the Glassworks buildings were completed in 2014 to 100 percent of code and have a staggered lease expiry profile to well known tenants MOVE Logistics, DHL, Packaging House, Cirtex and Bridgestone. Although the statistics suggest the Christchurch industrial market has its lowest ever vacancy level, the actual market is starting to tell a different story. Over 300 industrial properties are available or are becoming available for lease within the next six months. A number of large new buildings are in the planning or construction phase and these properties will make further space available for tenants. Owner-occupiers continue to be a dominant force in the purchasing market due, in part, to the comparably low cost of owning versus leasing and some aggressive lending structures from the major banks; we expect this trend to continue.

CanterburyRebuild - The Influencers

CANTERBURY BUILD January 2016 5

Profile for Metropol

Canterbury Build Magazine January 2016 Issue 53  

We cover the new library & community centre in Halswell, research into strengthening liquefaction-prone land, The Influencers' columns, the...

Canterbury Build Magazine January 2016 Issue 53  

We cover the new library & community centre in Halswell, research into strengthening liquefaction-prone land, The Influencers' columns, the...