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Pacifecon Analysis Of Top-end Building & Construction Activity In New Zealand During February 2010

Fuseworks Media
Fuseworks Media

Two features stand out at the top-end of the market (i.e. for projects with an individual value of $5.0 mill upward) in New Zealand during February 2010. First, the private and public sectors are running neck-to-neck which means that the private sector is recovering and the enhanced government expenditure in the public sector is cutting in. Secondly, there is an enhanced performance in LNI which for the first time in a long-while has exceeded that of SI. The 40 tendered projects also mean that commencements will be relatively buoyant later in 2010.

The total of 30 top-end planned new projects throughout New Zealand first announced in February 2010 compares with a corresponding figure of 17 in February 2009; the 40 tendered compares with 38 a year ago and the 25 commenced with 14 in February 2009.

The planned new projects in UNI include: Stage 2 of the Rhubarb Lane development comprising 12-level commercial/residential at very early planning on the former Cook Street Council depot site in Auckland. Waiwara Properties Ltd also in early planning for a water bottling plant at Waiwara, Auckland. Tainui Group Holdings Ltd at early stage of planning to add a hotel, hospitality and tourism training centre, offices and a health facility to The Base in Te Rapa Road, Hamilton as well as a second-level cinema complex and additional retail. Cambridge Golf Club proposes redevelopment and upgrade of the existing golf course as well as sale of 8.8 ha to Granchester Farms Ltd for a villa retirement village. Global Group Holdings NZ Ltd plans stage 1 for construction mid-2010, of a residential development in Bethlehem, Tauranga, comprising 28 tiered luxury apartments and a 25m heated swimming pool. Stage 2 will comprise up to a further 50 tiered apartments, possibly in conjunction with a hotel/motel complex. Overall value of the three components is $33.0 mill. Peninsula Land Development Ltd propose a residential subdivision on the Peninsula Golf Club site, being vacated in 2013, at Orewa, Auckland. Monte Cecilia School is in early consideration for repositioning its Mt Roskill school in Hillsborough, Auckland. East Park Trust has submitted a Resource Consent application for a mixed-use residential, retail and commercial development at Flat Bush, Auckland. Location Group of Companies has finalised plans for 13,265 SM of lettable retail and service centre space at The Grange, Warkworth. James Kirkpatrick Group Ltd is at the concept stage for warehouses and offices in Mangere, Auckland.

On the Government side Auckland Hospital Board is at early planning for four new operating theatres ($24.0 mill) in existing buildings at Greenlane, Auckland. Ministry of Education is also at an early stage of planning for new primary schools at South East Flat Bush, Auckland as well as South West Flat Bush, Auckland and a junior high school and a primary school both at Ormiston Road, Flat Bush, Auckland. The master plan for Ormiston Road includes two further buildings and is budgeted at $50.0 mill total.

Projects at the tendering stage in UNI during February included: Avondale College: Stage 1 ($5.1.mill) of 3-phase redevelopment. Fonterra Kauri: Stage 1 of new wastewater treatment plant on SH1 at Whangarei. Eden Park: Temporary hospitality structures on No 2 Pitch. Samson Corporation Ltd: Commercial and retail buildings ($15.0 mill) at Parnell, Auckland. Accor Hotels & Resorts and C P Group: Still evaluating tenders for Pullman Hotel ($100.0 mill) in Auckland Central. McDougall Reidy & Co Ltd: Also evaluating tenders for warehouse/offices ($18.0 mill) at Avondale, Auckland. Undisclosed developer (C/- Prendos Ltd): Recladding of apartments ($10.0 mill) at Mt Eden, Auckland. Te Rapa Bypass: Contract ($168.7 mill) was awarded 4 March by NZ Transport Agency for SH1 project under Alliance model to Fulton Hogan Ltd and Opus International Ltd JV. Kamo Bypass: Tenders under evaluation by NZ Transport Agency for Stage 2 ($23.0 mill). Waikato Hospital: Waikato District Hospital Board currently evaluating expressions of interest for new rehabilitation hub (($25.0 mill) in Hamilton. Wynyard Quarter: Auckland City Council currently evaluating tenders for Marine Events Centre ($31.8 mill) in Auckland Central. Waikato District Health Board also evaluating tenders for parking buildings ($10.0 mill) in Hamilton. Waitemata District Health Board: Registration closed for renal unit ($9.2. mill) at North Shore Hospital. Ministry for the Environment and Environment Waikato: Short-listed tenders out for remediation ($9.2 mill) of Tui Marae at Te Aroha. Ministry of Education: Registration closed for design/construction ($11.6 mill) of Hingaia Primary School at Papakura, Auckland. Dart 26 (Ontrack [NZ Railways Corporation]): Expressions of interest closed for up to 10 platform extensions on Auckland Rail Network. Papakura Interchange (NZ Transport Agency): Selected tenders closed for upgrade ($16.0 mill) on SH1 Southern Motorway. Wynyard Quarter-Jellicoe Street (Sea+City Projects Ltd & Auckland City Council): Tenders closed for public open spaces ($24.0 mill) in Jellicoe Street, Plaza and Park areas. ECC: $24.0 mill. Pt Erin Pool: Expressions of interest closed with Auckland City Council for redevelopment and operation in Herne Bay, Auckland.

Projects commenced in UNI during February include: Goodman Property Trust & IBM NZ Ltd: Construction commenced for Ra Ora-IBM data centre ($7.0 mill) at Highbrook Business Park, Auckland. Bldr: Brookfield Multiplex Constructions (NZ) Ltd. Safari Group (NZ) Ltd: Construction in hand for Quest hotel-style apartments ($8.0 mill) in Henderson, Auckland. Bldr: Owner. Villages of NZ (Pakuranga) Ltd: Work also in hand for Stages 1 & 2 expansion ($8.7 mill) of retirement village in Pakuranga. Auckland. Bldr: Gibson O'Connor Ltd. Northland All-Weather Track Trust: Work in hand for Stage 2 of sports facility ($9.2 mill) at Kensington, Whangarei. Bldr: Hill Construction Ltd. Te Ahu Charitable Trust & Far North District Council PPP: Contract awarded for community centre ($15.0 mill) in Kataia, Whangarei. Bldr: KPH Construction Ltd. Accent Point Library & Museum (KCL Property Ltd & Papakura District Council PPP): Work started for upgrade ($5.5. mill overall) in Papakura, Auckland. Bldr: Naylor Love Ltd. Newmarket Park (Auckland City Council): Work commenced on closed landfill remediation ($5.0 mill) at Newmarket, Auckland. Cntr: Rogers Civil Ltd. Museum of Transport & Technology [MOTAT]: Construction already in hand for (Stage 2) Aviation Display Hall ($15.0 mill). Bldr: N Z Strong Construction Ltd. Transpower NZ Ltd: Work also started on 250 MVA interconnecting transformer ($5.0 mill) at Penrose. Auckland. Ministry of Education: Construction to start this month (cost not disclosed) of school for years 1-8 at Mt Wellington, Auckland. Bldr: Fletcher Construction Co Ltd. Te Uku Wind Farm Meridian Energy & WEL Network Ltd): Construction commenced of facility ($140.0 mill) located 10 km south east of Raglan. Cntr: Inexplicably not disclosed. Okara Park Pump Station (Whangarei District Council): Construction already in hand for duplicate rising main. Value not available for this component of $27.0 mill overall project. Cntr: Fulton Hogan Ltd. Construction already in hand for pump stations upgrade (over $4.0 mill) at same location. Cntr: United Civil Construction Ltd. NZ Transport Agency: Work already in hand for roading Performance Specified Maintenance Contract ($103.7 mill) over 10 years in West Waikato area. Cntr: Transfield Services (NZ) Ltd.

In LNI the new top-end projects announced during February 2010 are: Viridian (New Zealand) Ltd: Early planning for an 8,500 SM glass processing factory ($25.0+ mill) in Silverstream, Lower Hutt. Countdown Supermarket (Progressive Enterprises Ltd): Early planning for upgrade in Napier. Undisclosed developer (C/- Paris Magdalinos Architects): Early planning for large office development in Napier. Undisclosed developer (C/- Paris Magdalinos also): Early planning for large retail development in Napier. Transpower NZ Ltd: In planning for Stages 2 & 3 of HVDC project in Haywards Hill substation ($25.0+ mill) in Lower Hutt. Tairawhiti Development Partnership (C/- Gisborne District Council): Feasibility study for navigation signage. waterways, walkways and visitor amenities ($6.0 mill) in Gisborne District. Projects at the tendering stage in LNI during February 2010 include: Kuranui College: Tenders closed for new classroom block ($5.0+ mill) at Greytown, Wairarapa. Bunnings Warehouse New Zealand: Tendering for large format retail store in Lyall Bay, Wellington. Wellington Girls College: Out to tender for Pipitea Block ($5.2 mill) in Thorndon, Wellington. Transpower NZ Ltd: Transmission towers for HVDC project from Benmore, McKenzie District, and SI to Haywards Hill, Lower Hutt. Wellington City Council: 45 m of new seawall and roading repairs at Owhiro Bay, Wellington. Ontrack [NZ Railways Corporation] & Greater Wellington Regional Council: Tendering for upgrade of railway station and carpark ($5.0+ mill) at Waikanae, Kapiti Coast and at Paraparaumu, Kapiti Coast ($5.0 mill). Transpower (NZ) Ltd: Registration closes 15 March for supply and refurbishment of steel transmission towers ($25.0+ mill) on HVDC line between Benmore, McKenzie District, SI to Haywards Hill, Lower Hutt. Wellington City Council: Negotiating with builder for Central Park flats ($10.0 mill) at Mt. Cook, Wellington. NZ Transport Agency: Tendering for SH2 Papatawa realignment ($9.9 mill) near Woodville, Tararua.

Top-end projects that commenced in LNI during February 2010 include: Royal Thai Embassy: Refurbishment ($14.0 mill) at Thorndon, Wellington. Bldr: Fletcher Construction Co Ltd. Forte Development (Globe Holdings Ltd): Work recently started for stage 2 of College Street apartments ($10.0+ mill) in Te Aro, Wellington. Bldr: McKee Fehl Constructors Ltd. Kimi Ora School & Ministry of Education: Contract awarded for special needs facility ($5.0 mill ballpark) at Naenae Intermediate School. Bldr: Maycroft Construction Ltd. Transpower NZ Ltd: Construction commenced for civil work ($25.0+ mill) for converter stations and equipment of Pole 3 replacement in Stage 1 of Haywards Hill substation for HVDC project. Cntr: Brian Perry Civil (Fletcher Construction Group).

In SI top-end new projects during February include: Transpower Ltd: Reports of the HVDC Project linking Benmore, McKenzie District, with Haywards Hill, Lower Hutt, are reported under LNI. Westpower: Planning for additional 110 kV circuit from Dobson to Reefton ($5.0 mill). Otago Settlers Museum & Dunedin City Council In planning for Stages 3 & 4 of redevelopment programme ($38.0 mill overall project). The Otago Theatre Trust: Fund- rising for upgrade ($6.9 mill) of the Regent Theatre in The Octagon, Dunedin. Invercargill City Council: Strategic and concept planning report due in June for 3000 new houses in Invercargill.

SI tenders at the top-end during February included: Oceania Milk Co Ltd: Expressions of interest close 31 March 2010 for dairy processing plant ($80.0 mill) at Glenavy, Waimate. Trustpower Ltd: Tenders have been sought for Stage 1 (out of 2) turbines for 200 MW overall windfarm ($600.0 mill overall) at Lake Mahinerangi, south of Dunedin. NZ Transport Agency: Tendering for 4-laning ($28.0 mill) of SH1 Russley Road, Christchurch and tenders closed for design/construction replacement ($15.0 mill) of Waitaki River bridges Marlborough District Council: At selected tender for parking building ($5.0+ mill) at Blenheim. Top-end commencements for SI in February 2010 included: Matakauri Lodge: External design changes ($8.0 mill) to existing structure in Glenorchy, Queenstown. Construction manager: Arrow International Ltd. Ganellen Pty Ltd (Sydney): Stage 1 redevelopment ($10.0 mill) of former Christchurch Press site in Christchurch Central in order to create a new press building. Bldr: Calder Stewart Industries Ltd. Oceana Gold Globe Progress Mine: Work started on $5.0 mill exploration programme. Cntr: In-house. Wigram Village (Ngai Tahu Property Ltd): Bulk earthworks and demolition started for Stage 1 - 60 residential lots at former Air Base in Wigram, Christchurch. Cntr: Downer EDI Works Ltd. Otago Settlers Museum & Dunedin City Council: Construction recently started on Stage 2 of redevelopment programme. ECC: $5.0+ mill out of $38.0 mill overall. Bldr: Lund South Ltd.

Comparison of the construction industry with that across the Tasman has been much in vogue in political circles in New Zealand. Pacifecon believes for two reasons this to be fallacious. First, stimulatory expenditure without adequate detailed pre-planning can be disastrous, vide the four deaths recently in Australia due to lack of skill training for home insulators using foil instead of batts with the effect that the scheme has been canned temporarily pending reassessment. This follows a similar incident in NSW at the State level where parents have been withdrawing pupils from some State schools in the bush due to heating of many of these with unflued stoves. Second, pump priming without the existence of adequate prior plans can be extremely wasteful. An example of this is the new school assembly hall that remains unutilised due to design on the go which omitted to provide fire doors. In this respect New Zealand has the advantage of rail, road and other public amenities as well as a remaining nucleus of State-owned enterprises via which construction activity can be quickly escalated whereas in Australia and elsewhere there has been an indecent scramble towards privatisation since the mid-1990s. In Pacifecon's opinion the state of the non-housing building and construction market in New Zealand should now be seen as being more optimistic than at any time since commencement of this press release series in December 2008.

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