Calder Stewart industrial boom: $1.5b projects, 900ha land and big wind farm plans - Property Insider

Although Goodman Property Trust and Property For Industry are the largest specialist listed industrial landlords, the southerners are exceeding others in terms of workloads.

Trust the Mainlanders to go one-up on the Aucklanders, right?

Calder Stewart celebrated 70 years in business last November with helicopter rides for staff, country-pop music sensation Kaylee Bell performing and more than 500 staff and former employees gathering.

The company builds as well as buys, giving more of a controlled outcome, potentially for tenants and purchasers of its end products.

Stewart says during the past three years, it delivered property projects worth more than $1.5b in New Zealand.

During that period, it had built more than 750,000sq m of industrial buildings nationally.

Last week, Wesfarmers-owned NZ Safety Blackwoods opened its new headquarters at Drury South Crossing, which Calder Stewart is developing in South Auckland. Associate FortHill Property owns that precinct.

The building is leased long-term to the Wesfarmers’ business, although Calder Stewart sold the asset to FortHill.

If the pipeline of projects Calder Stewart anticipates proceeds, the company’s volume of upcoming work could easily double in the next three to five years, Stewart said.

Hundreds of millions of dollars of investment are set to be injected into large-scale industrial property developments, boosted by the country’s primary export industries, he believes.

That is driving demand for logistics, cold storage, manufacturing and distribution buildings.

Latest Ministry for Primary Industries forecasts show food and fibre export revenue is expected to reach $62b in the year to June 30, up about 3% on the previous year and about 16% higher than two years ago.

Growth in dairy, meat, forestry and horticulture is driving that lift, with higher export volumes putting pressure on warehousing, temperature-controlled storage and national freight buildings.

“When primary production is strong, the entire food distribution network needs staging, temperature-controlled storage and distribution capability.

“Cold storage is one of the most active areas of investment, particularly due to dairy and meat export growth,” Stewart said.

His family company’s property development programme spans both islands.

Auckland demand is coming from exporters, retail and trade suppliers upgrading and consolidating distribution networks.

Stewart said demand for new manufacturing buildings was particularly strong.

NZ Safety Blackwoods’ new automated distribution centre at Drury South Crossing is one example, Stewart said.

The 18,000sq m building brings four North Island operations into a single high-capacity hub.

It integrates robotic storage and retrieval systems designed to improve movement and accuracy handling goods.

NZ Safety Blackwoods supplies safety, engineering and industrial products to construction, manufacturing and infrastructure operators.

Stewart says that project also reflected broader structural changes in industrial construction.

“We’re seeing smaller distribution sites consolidated into larger, centralised hubs. At the same time, businesses are investing more heavily in automation, efficiency and resilience.”

Industrial buildings of this scale form a critical layer of retail and distribution infrastructure supporting the construction economy, he said.

“Construction sites rely on consistent access to safety equipment and essential consumables. When networks work well, productivity improves.”

In 2024, Calder Stewart sold the NZ Safety Blackwoods building to FortHill Property for $66.5m.

The building could now be revalued at nearer $70m following its first valuation cycle, Stewart said.

That highlights continued investor appetite for modern industrial buildings, he said.

NZ Safety Blackwoods was one of the largest industrial expansions lately.

Stewart says land availability is a major factor influencing development decisions, particularly in Auckland’s established logistics corridors.

The war in Iran and rising petrol prices meant potentially even more demand for new buildings at precincts like Drury South Crossing.

“But it’s also providing uncertainty for operators.”

“We’re seeing consolidation into newer, larger sites as occupiers aim to operate more efficiently. Automation is increasing storage density and speeding up fulfilment, and that is reshaping how warehouses are designed.

“With limited green field sites, opportunities to get scale do not arise frequently and when they become available, businesses tend to act quickly.”

Stewart says those constraints are contributing to taller, more technologically advanced buildings, with high-bay and ultra high-bay warehouses allowing occupiers to go up instead of out.

“With land scarce, building up makes sense because automation allows higher-density storage while maintaining efficiency.”

However, New Zealand has no double-storey large-format warehouses, unlike overseas.

Calder Stewart Energy owns and maintains rooftop solar-generating equipment on the new NZ Safety Blackwoods building at Drury South Crossing. That will also be on the new Fonterra building in Christchurch.

Calder Stewart Energy registers easements over roof space on property titles, “and we’re the only people in New Zealand to do that, so even if the building is sold, we maintain an interest”.

Stewart says Calder Stewart now employs about 500 staff.

If activity continues at the projected level, staff numbers could rise 15% to 20% in the next few years.

Large industrial builds also need hundreds of subcontractors and specialist trades, supporting broader regional employment.

“A lift of that scale would equate to roughly 75 to 100 additional roles across the country, spanning project management, engineering, construction and support functions,” he says.

Stewart says the company holds about 900ha of industrial-zoned land so it can respond to occupier demand.

The land is from Auckland to Invercargill on dozens of sites.

In Southland, Calder Stewart owns more than 500ha of heavy industrial-zoned land where it plans to build a wind farm.

“That will be an energy precinct with wind turbines but we’re also planning to develop industrial buildings as well.”

Further major developments are planned in Auckland and the South Island during the next two years.

Long-term industrial projects include the wind farm at Awarua Quadrant in a project worth about $3b.

Milburn Quadrant is an inland port south of Dunedin with rail access, where Calder Stewart plans a $2.5b project.

“These are long-term infrastructure decisions, and when businesses commit to facilities of this scale, they are backing sustained economic activity,” he said.

And something a little unusual: “It was more efficient for us to fabricate our structural steel at Revolution Hills and truck it up to Drury than to buy it in Auckland,” Stewart said.

In the immortal words of the late Meatloaf, two out of three ain’t bad.

That’s the sentiment which Kiwi Property Group CEO Clive Mackenzie expressed to me this month on two out of three successful deals his company concluded lately.

Kiwi had three big deals on the hoof at once.

Plans were to sell:

Two happened but the third did not after Kiwi said this month that plans to sell that lifestyle centre to Mackersy LFT Fund had failed.

“Kiwi Property [said] the establishment of the Mackersy LFR Fund is no longer proceeding as the minimum capital raising condition required to establish the fund is unlikely to be met within the agreed timeframe.

“The sale of the property at 393 Mt Wellington Highway, Auckland, known as Sylvia Park Lifestyle, will not proceed and the company will retain full ownership and operational control of the property.”

From Mackenzie’s point of view, completing two of those three deals was satisfying.

“The market’s tough,” he said to me this month when asked why the deal didn’t proceed.

Last November, Kiwi said it wanted to sell The Plaza. That deal, to Mark Gunton’s NZ Retail Property Group, settled in December.

The sale of ASB North Wharf was announced in January and is due to settle in the first half of this year, pending Overseas Investment Office approval.

“These transactions release capital from mature assets that are no longer part of our long-term strategy, with some of the proceeds to be redeployed at our key assets,” Kiwi said.

But what of the Mackersy failure? Kiwi already owns 50% of Mackersy.

One institutional investor said Mackersy’s client base has many South Islanders. They obviously did not have the appetite to pour cash into that Sylvia Park deal.

Asset Plus said its Munroe Lane offices at Albany are worth less now, falling from $107m a year ago to $105.5m as at today.

The offices were opened in 2023.

The main driver of the reduction was a softening in the capitalisation rate given recent comparable market transactions.

Auckland Council has leased a large amount of space there.

Anne Gibson has been the Herald’s property editor for 26 years, written books and covered property extensively here and overseas.