Overview

Taranaki is being transformed by government and private sector investments, which in turn are creating emergent infrastructure and property development opportunities.

Historically there has been under-investment in this space, which has created a huge need for new development.

Defying predictions, commercial property activity in New Plymouth has been on a growth surge since April 2018. There is substantial demand for smart development spanning retail, office and industrial use, while new hub developments in both Hāwera and Stratford offer ground-floor opportunities.

Established buildings offer an accessible entry point in towns around the mountain, while greenfield
development sites remain available throughout the region.

Residential accommodation investment is also on the rise, with a growing demand for quality rental properties throughout the region driven by the globally connected energy sector and strong inward migration.

Augusta Capital

Successful Taranaki businessman and philanthropist Bryce Barnett believes there is opportunity for large corporate companies to cut costs by establishing offices in regional New Zealand.

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“I find the possibilities for Taranaki exciting,” says the Augusta Capital executive director, who works from the New Plymouth and Auckland offices of the property funds manager.

“There is opportunity for corporates based in Auckland to set up some of their business functions, such as accounting and administration, in Taranaki. The region is a good place to be based to do business from – the rent is half of Auckland, there is good connectivity to other centres, staff are happier because they only have five minutes to drive to work, and the lifestyle here is great.”

Augusta Capital, a New Zealand stock exchange-listed property funds manager that specialises in commercial and industrial property, looks after $2.3 billion of real estate throughout New Zealand and Australia for individual investors and investment syndicates.

It has a large presence in Taranaki, managing about $60 million worth of property in the region, including the large Valley retail shopping complex in New Plymouth, supermarket properties, and other commercial and industrial properties.

Despite having offices in Auckland and Christchurch, it is the New Plymouth office that manages the company’s Taranaki buildings, its Australian portfolio, and properties in Hamilton to Wellington.

“We have 12 staff here – accounting staff, two asset managers who fly to Australia every two months, and the operations manager for the whole Augusta group,” says Bryce.

That strong Taranaki connection was developed by Bryce, who established property investment company KCL in 1994 and built up a successful business that managed more than $750 million worth of property in New Zealand and Australia.

In 2014, Augusta Capital bought KCL for $15 million.

“We were competing, so it worked to join forces and a lot of our investor base crossed over,” says Bryce.
“It was a case of economies of scale too, particularly around stringent FMA (Financial Markets Authority) regulations, which would cost us more than $500,000 in legal compliance a year now.”

KCL had a large group of Taranaki investors, prompting Augusta Capital to maintain a New Plymouth office.
“The company is regionally focused. Of our investors across the whole country, 23% are from Taranaki, second only to Auckland, so we stayed here because of that strong investor base,” says Bryce, whose governance and philanthropic commitment and contribution to Taranaki saw him made a Member of the New Zealand Order of Merit in 2018.

“We had key staff who wanted to stay here where they were more financially secure – each one of our staff in New Plymouth owns their own house, which wouldn’t be the case in Auckland.”

Bryce says with Taranaki going through a “readjustment stage” as the region shifts to a low-emissions environment, there is the opportunity for property in the region to be utilised in new ways – such as “upmarket medical facilities, or an upmarket day surgery” – and for corporates in the major centres to invest in or lease office space in Taranaki to house various parts of their operations.

“There is the opportunity to get the message out to the investing community that Taranaki is changing and there are opportunities here.”

First Gas

Headquartered in the heart of New Zealand’s premier energy region, First Gas Group owns and operates some of the country’s largest and most important infrastructure.

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Headquartered in the heart of New Zealand’s premier energy region, First Gas Group owns and operates some of the country’s largest and most important infrastructure.

Snaking up the west coast of the North Island and branching out across the island, are thousands of kilometres of gas transmission and distribution pipelines that supply major industrial plants, power stations, dairy factories, homes, enterprises and essential services, such as hospitals.

“They’re vital pieces of infrastructure for the day-today operations of some of our major industries and for hundreds of thousands of New Zealanders,” says First Gas Group chief executive Paul Goodeve, at the company’s head office in New Plymouth.

First Gas was created in 2016 when Australian-based First Sentier Investors bought the gas transmission and distribution network of electricity and gas distribution company Vector Limited for $952.5 million. This included the Kāpuni natural gas transmission pipeline, which runs from Kāpuni, in South Taranaki, to Auckland, and south to Wellington.

First Gas then purchased the Māui natural gas transmission pipeline from oil and gas companies Shell, OMV and Todd (collectively known as the Māui Mining Companies) for $335 million. The Māui pipeline is New Zealand’s main gas transmission line; more than half of the gas that flows along it supplies the Huntly Power Station and the two Taranaki methanol plants owned by Methanex.

All up, First Gas has more than 2,500km of highpressure gas transmission pipes and about 4,800km of gas distribution pipes in the North Island.

The pipelines are supplied by Taranaki’s offshore and onshore natural gas fields. Having the majority of those assets in the region and the expertise of those involved in the oil and gas industry is what prompted First Gas to have its headquarters in Taranaki.

“There’s a fantastic eco-system of businesses that exist in Taranaki,” says Paul. “Growing out of the oil and gas industry and Think Big, there’s a real bubble of technical expertise in the oil and gas industry and associated disciplines, which stretches from welders and engineers to our councils and lawyers.

“There’s also an exceptionally high level of health and safety expertise – probably at a level that you don’t see anywhere else in New Zealand.”

The First Gas Group is owned by funds managed by First Sentier Investors, a global asset management enterprise that manages more than AU$200 billion in assets on behalf of a range of investors, including pension funds and institutional investors.

In 2017, First Gas Group furthered its investment in gas infrastructure, with affiliate company Gas Services New Zealand (GSNZ) buying the Ahuroa gas storage facility, near Stratford in central Taranaki. Further investment has followed with the facilities upgraded to enable increased storage capacity.

In 2018, GSNZ bought New Zealand’s largest LPG retailer Rockgas, from Contact Energy, for $260 million.

“Our shareholders like investing in New Zealand and infrastructure-type assets. Both Ahuroa and Rockgas were seen as investment opportunities that complemented the First Gas business and fit well with our long-term investment approach, which is to diversify our domestic gas offering and grow our business,” Paul says.

First Gas is also looking to the future and has received Government support, through the Provincial Growth Fund, to investigate whether its existing gas pipelines can support hydrogen or hydrogen-blend gas transmission.

“The trial is really exciting for us as we see it as a real opportunity for gas and for New Zealand. Our trial is not going to answer whether hydrogen’s made, it’s going to answer whether we can transport it in our pipelines, and we’re pretty sure we can,” Paul says.

“There’s opportunity for the likes of hydrogen projects to kick the region on. The expertise is here, the infrastructure is here, there’s a strong workforce here, and councils and the regional council have a lot of experience and well-understood processes by which projects are well considered.”

As an essential service during the COVID-19 pandemic, First Gas have been able to continue operations relatively unaffected. Flexible work practices have been in place for some time, and their IT systems are set up to allow access from anywhere, allowing staff to effectively work from home, with little disruption.
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