Stephen Hughes, Chief Executive of Drury South Crossing – a development company owned by Stevenson Group – discusses their plans in a 20-year industrial development in Drury, South Auckland, and why it’s seeing demand from a broad range of businesses.
What are Stevenson Group’s strategic plans in the industrial space in Drury – what have you done up until now, and what are your plans for the next five years?
The next five years are going to be the tail end of what will have been a 20-year journey. Over the last 14 years we’ve undertaken the plan change, designed and engineered various infrastructure requirements, and acquired nearly 40 properties. Now we’re in a stage where we’re implementing all those plans. So, we are building roads, wetlands, infrastructure connections, undertaking earthworks and delivering land for industrial, housing, office and retail.
Looking forward, it’ll be a continuation of our sales programme, but also an opportunity for us to remain flexible and respond to the market.
One of the lessons we’ve learned over 14 years is that you can’t predict exactly what the market needs are. The best you can do is retain flexibility, to meet the demand that comes along. So, the big change for us is that we’ve introduced residential and a bit more retail and office, and created much more of an integrated development as opposed to just a standalone industrial precinct.
What are the strengths of Drury as a location in the context of the Auckland–Hamilton corridor, and the golden triangle, and what do you think are the industries that would benefit most from being there?
Drury is exceptionally well placed because it is within about an hour of almost half of New Zealand’s population, so it’s very close to a big chunk of the New Zealand market, and a sizeable local labour market.
When we look back to the beginning, a lot of what we were doing was about creating jobs out in Drury and reversing traffic movements in the city. We saw the benefit in turning some of those traffic flows around so people aren’t driving north into the congested parts of Auckland but can have a job in the south and multiple options for how they get there. For those businesses located at Drury South Crossing they will be well placed to distribute services through not just Auckland but also the wider area, especially the Tauranga–Hamilton corridor.
In the Auckland context, Drury is at that point where the isthmus widens. If you look at somewhere like Mount Wellington, for example, between the Tāmaki River in the east and the Manukau Harbour in the west, it is only about 2km wide. This creates a bottleneck and limits growth potential in such locations. Looking at the land surrounding Drury South Crossing, you can see that the opportunities for scale are far greater than in other, more established parts of Auckland.
The industries that would benefit from being here are those which need larger footprints of land, and those businesses that are looking to distribute within and outside of Auckland. For those that are distributing to the upper North Island, I think there are some advantages to being on the edge of the city, where there is less congestion, rather than right in the middle.
Based on what you’ve developed in phase one, what’s the mix of industries that have shown interest in Drury?
There’s been interest, including acquisitions, from a full range of industries. For example, logistics and warehousing, transport businesses, automotive, contractors, trade retail, food manufacture and distribution.
And on top of that, there are some we didn’t anticipate that have made enquiries in the last year, such as data centres and film studios. When we began 14 years ago, our thinking was very much around the quarry and the construction market. But what we’re seeing is demand from a broad range of businesses.
We’re also seeing quite a bit of demand from the construction sector. That’s in part because of the significant investment that’s earmarked for the wider Drury area. It obviously makes sense, if you’re in the construction industry, that this is a good place to be.
From your perspective, what needs to be done to plan for large-scale job creation in Drury? And what is the importance of industrial land in that context?
Over the last 14 years we’ve proved the concept and have seen strong demand for industrial and residential property, this will ultimately feed demand for the retail and office sector.
Typically, industrial land is a leader. It’s driven by businesses needing larger footprints of land, and these are more readily found on the outskirts of the city. The key opportunity with Drury is to ensure that the infrastructure and resilience are planned well in advance. We can learn lessons from some of the other areas in Auckland that have been developed, like Wiri, Albany and East Tāmaki. These areas were established circa 30 years ago and still have issues associated with infrastructure, and ultimately this throttles growth. It’s a lot easier to plan these things in advance rather than try to fix problems later on. The wider Drury area is still full of opportunity to get the infrastructure right. This means enabling a range of transport modes, but also constructing a road network that provides resilience with multiple arterials, not just State Highway 1. That’s probably the key in terms of activating and ensuring that vision for wider employment.
In your view, what type of anchors or anchor tenant would benefit Drury by helping to build an ecosystem or supply chain around them?
That’s an interesting question. We initially thought that we’d be securing a large, multinational anchor tenant to kick start development at Drury South Crossing. However, we have found that when we look at our customers to date, it hasn’t been one business or one business type that’s enabled us to proceed, it’s the collective - we have more than thirty different businesses that have purchased land. To me, it’s not so much trying to pick what business may want to be here. Rather, it’s about developing the roads and the infrastructure for a range of options – in terms of use, shape and size – and ultimately providing the flexibility that makes Drury South Crossing viable for the market.
What’s your message to capital providers and businesses who may be looking at Auckland, specifically Drury?
I think it’s very easy to underestimate the pace of change in development and whilst Drury is somewhat of a blank canvas today, after 14 years of preparation we’re now seeing things taking shape on the ground. As people gain more confidence in the Drury location, progress will really accelerate. So, I’d be saying that some of these opportunities will come and go; land is selling, and it won’t always be available as people would like it – be it for industrial business, residential homes, or even large-scale infrastructure. Now’s the time to be proactive, look at what you’re trying to achieve, and seize the day.