Infrastructure to New Zealand
Trends and opportunities
Building a more competitive and productive economy for New Zealand is one of the key priorities for the government. The Business Growth Agenda will drive this. There are six key areas in the Business Growth Agenda and one of these is infrastructure development.
In recognition of the importance of infrastructure as a key driver of economic growth the National Infrastructure Unit was established in 2009, followed by the release of the National Infrastructure Plan.
The plan sets a bold vision that ‘by 2045 New Zealand’s infrastructure is resilient, coordinated and contributes to a strong economy and high living standards’. The plan provides the framework and the building infrastructure work programme provides the detail.
It is forecast that A$110 billion will be spent on infrastructure in the ten years to 2025.
Key priorities include:
- The Canterbury rebuild.
- Auckland infrastructure and urban development.
- The Roads of National Significance.
New Zealand’s infrastructure priorities under its National Infrastructure Plan present significant opportunities for Australian exporters and investors.
We are actively promoting the Australian New Zealand Infrastructure Pipeline. This provides a forward view of public infrastructure activity across
Australia and New Zealand, providing certainty of the forward work
programme to investors, constructors, governments and other agencies.
The Canterbury Earthquake Recovery Authority (CERA) was the initial organisation charged with rebuild in Canterbury. CERA was disestablished on 18 April 2016. The key new central and local government agencies are:
- Otakaro Limited which is responsible for key anchor projects and precincts in Christchurch, along with managing the Crown's property assets in the central city.
- Regenerate Christchurch is overseeing the long-term development and enhancement of the central city, residential red zone, New Brighton and other potential regeneration zones.
- The Greater Christchurch Group in the Department of the Prime Minister and Cabinet (DPMC) is responsible for policy, planning, legal and monitoring support on a range of recovery and regeneration issues across the greater Christchurch region.
Auckland Transport Development
Auckland’s Integrated Transport Plan (ITP) is a 30 year investment programme designed by Auckland Transport (AT) and the New Zealand Transport Agency (NZTA) in collaboration with Auckland Council to meet the transport priorities outlined in the Auckland Plan.
Market pressure in the Auckland housing market saw the median house price for Auckland homes reach A$1 million in September 2016. Investment demand and a shortage of housing stock is driving prices. There is increasing pressure in the market for more affordable housing through unlocking banked land, higher density development, more efficient building practices and the adoption of new technology.
The release of Auckland’s proposed Unitary Plan in August 2016 provides a blue print for the city’s development, and will give clarity on densification for developers. There are opportunities for the development of well connected, medium-high density communities with quality urban design at an affordable price. Developments need to be at 500 or more homes and New Zealanders need examples of good urban development in order to showcase, educate and sway public opinion. Find out more about Auckland Housing Supply and Special Housing Areas.
Auckland City Centre Future Projects
Auckland council released their Downtown Framework presentation in September 2014. It contains a propsed list of 12 major programs over the next 10 years. Auckland is alive with commerical building and construction including medium rise office towers such as Commerical Bay, hotels including Sofitel, Sky City, Copthorne and the Fu Wa – Park Hyatt, and other projects in the suburbs and the North Shore.
Roads of National Significance
The New Zealand Government is focused on economic growth, and supporting infrastructure development is one of the key priorities to achieving this goal. The New Zealand Transport Authority (NZTA) has identified seven roads of National Significance (RoNS) as being strategically significant investment needs. These roads are important to moving people, goods and services safely and efficiently. All seven RoNS have commenced with one completed.
New Zealand has a well-established building and construction industry. While there is a healthy number of tier two and three builders, New Zealand lacks competition at the tier one level. Fletcher is the only true tier one player in the market. With the unprecedented, level of building activity throughout the country’s main centers, especially in Auckland, opportunities exist to enter the market.
The largest nationwide construction companies include:
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Marketing your products and services
Australian companies are generally encouraged to consider partnering with local New Zealand companies as an entry strategy. In the construction sector, we have seen several examples of successful joint venture (jv) agreements between Australian and New Zealand constructors, especially around the Christchurch rebuild:
- Naylor Love jv Hutchinson Builders
- Leighs Construction jv Cockram Construction
- Southbase Construction jv Thiess
The key benefits of the jv model of market entry include the ability to leverage the local company’s established position in the market.
It is possible for Australian companies to set up their own office(s) in New Zealand, such as Leighton Contractors New Zealand, but the path to achieving viable market share can be significantly longer.
Building materials are distributed almost exclusively via trade/retail merchant chains in New Zealand. The major players include Placemakers, Mitre 10, Bunnings, Carters (Carter Holt Harvey) and ITM.
Placemakers, a subsidiary of Fletcher building, dominates the trade (commercial) side of the market with a commanding share. Because of its dominant position and vertically integrated business model, Fletcher Construction presents strong local competition which is a challenge for new entrants trying to achieve a foothold in the market.
New Zealand boasts a large and highly competitive transportation industry with many operators especially in road freight, with less players in air, sea and rail.
Links and industry contacts
Christchurch City Council
New Zealand Government Electronic Tenders Service
National Infrastructure Unit
New Zealand Council for Infrastructure Development
New Zealand Transport Agency
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Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
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