Tag Archives: Napier

Strong passenger growth spurs Hawke’s Bay Airport Expansion upgrade

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The Hawke’s Bay Airport terminal expansion has been given an upgrade, boosted by the latest passenger growth figures and the target of one million passengers by 2025.

Last September the airport announced a redevelopment of the airport terminal increasing its size from 2500m2 to 3800m2 to accommodate the growth in passenger movements and visitors to the airport.

Recently appointed Hawke’s Bay Airport chief executive Stuart Ainslie said that due to continued passenger growth, potential new revenue opportunities and future security screening requirements, an independent review recommended upscaling the terminal by a further 540m2.

“The airport has reported strong passenger growth and we’ve also set a target of reaching one million passengers a year by 2025. At the same time, we reviewed the proposed floorplan and amenities and have made some generous modifications.

“It’s important that we create a sense of place and that visitors get a true taste of Hawke’s Bay either by visually promoting the region within the terminal or via retail offerings of Hawke’s Bay products such as food and beverages (wine),” Stuart said.

The airport has experienced strong passenger growth with 652,000 passenger movements recorded in the financial year ending 30 June 2017. The current expansion plan was set to cater for up to 800,000 passengers, which it was initially forecasted to hit in 2024, but has since been revised to 2020.

In the last week Air New Zealand has announced an additional 12 one-way flights between Napier and Auckland, while Origin Air is introducing new flights from Napier to New Plymouth, Palmerston North and Nelson.

Stuart has been in lead roles in the redevelopment of two international airports – Darwin, Australia and Port Morseby in Papua New Guinea. He commissioned a globally reputable airport planning consultancy Airbiz to review the existing terminal and apron design in relation to the current terminal construction plans.

“Based on the current ‘busy hour’ figures we are already at the anticipated capacity for when the redeveloped airport opens, so it’s important that we add additional floor space now.

The review also highlighted that the existing facility on opening will be constrained in three key areas – baggage makeup, commercial/passenger circulation space and Aviation Security, which is highly likely to become a regulatory requirement within the next 2 -3 years.

Stuart said the revised construction additions will lift the budget by $4.5m to $20.2m and push back the full terminal completion date to the second quarter of 2020. The increased investment, funded by Hawke’s Bay Airport Limited has been approved by current shareholders Napier City Council, Hastings District Council and the Crown.

Arrow International commenced the expansion construction in January this year and the first stage, the reconfigured arrivals hall will be completed and operational by late 2018.

Arrow International’s Central Region General Manager Chris Goldsbury, says the arrivals area would open as originally planned and that although the expansion had been upgraded, it didn’t create any inefficiencies.

“The team have made great progress so far. On many major construction projects you can expect variations and it’s far better to make the changes now, rather than towards the end. Arrow have been working very closely with airport staff, the project manager and sub-contractors, so it’s business as usual.”

Napier City Council mayor Bill Dalton said the council supports the additional expansion plans for the airport.

“There has been substantial growth in passenger numbers over recent years with Air New Zealand adding extra flights and increasing plane size and the arrival of Jetstar. We want to ensure that the airport has the capacity to meet continued growth predictions while at the same time being a welcoming and enjoyable gateway to the region,” he said.

Hastings Mayor Sandra Hazlehurst said “this is an exciting project for Hawke’s Bay and we share the airport’s vision to create the best provincial airport in New Zealand.  The Hawke’s Bay Airport is being very proactive in meeting the future needs given the predicted passenger number growth and the overall growth of the region.  Hastings District Council is delighted to support the new expansion plans.”

Stuart said an airport masterplan is also underway, which will safeguard the airport into the future. It will also enable the realization of new development opportunities both commercially, increased capacity by incumbent airlines and new entrants.  The Master plan process will include a reasonable period for community and stakeholder engagement.

“Our vision is to be the most vibrant and successful regional airport in New Zealand. We are also very aware of our environmental role in Ahuriri and surrounding areas and it’s important that we have an active environmental management plan.

The terminal has been designed in the shape of a Kuaka (godwit) bird in flight by local architects PMA with supporting design inspiration from local artist and Mana Ahuriri representative Jacob Scott.

“It’s important that we incorporate a strong sense of place with reference to the Kuaka and reflecting the Gateway Te Hau- Te Waharoa and Mana Ahuriri and Ngati Kahungunu Iwi aspirations.

The terminal when complete will be 74 percent larger than the existing footprint and will include new airline check in areas, an automated baggage handling system, a dedicated arrivals gate, a central hospitality and retail area; new bathrooms, airline offices and an expanded Air New Zealand regional lounge. The rental car concierge area will also be relocated within the terminal.

The new entranceway to the airport at the intersection of Watchman Road, SH2 and Meeanee Quay is also close to completion and is due to open by the end of September 2018.

 

 

 

Valuing up the Napier Office Rental Space

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Traditionally there has always been an oversupply of secondary office rental space in Napier and Hawke’s Bay in general. Tenants have favoured, new or well renovated office accommodation which has meant that landlords with second tier accommodation have always struggled to attract tenants.

However, recent developments in June 2017 saw the Napier City Council identify the council civic buildings as being earthquake prone with low seismic ratings which has resulted in them needing to be vacated. This included the main council offices, library and IRD tenancies. Over a three to five-month period these tenancies have been relocated throughout the city and have soaked up a huge proportion of vacant office accommodation within the city, currently leaving a small amount of office space available. This has resulted in a significant change in the traditional landscape of office rental space and seen an uptake of this second tier accommodation.

The difference between primary and second tier accommodation is affected by factors such as locality, age and quality of the improvements and in particular, seismic rating. A property’s seismic rating has been one of the biggest driver’s in the changes seen in Napier’s CBD. This is because insurance premiums for earthquake prone structures have increased substantially, (if replacement insurance can be gained at all) some to unaffordable levels and many older buildings have been deemed earthquake prone and/or requiring remedial works to bring them up to code. Consequently, much of the large-scale redevelopments recently undertaken in Napier CBD have been driven largely by seismic issues.

Consequently, since 2011 Napier has seen large scale redevelopments in the Marine Parade/Hastings Street locality. Initiated by the Farmers development, there has also been the redevelopment of the museum, the old Cosmopolitan Club into high quality offices and the redevelopment of the Central Post Office building. A new strip retail building has also been created on the corner of Hastings Street and Dickens Street and another new building opposite this to provide retail and upper floor offices.

Furthermore, the introduction of new Health and Safety laws have shown tenants are prepared to pay higher rents and vacate earthquake prone buildings to ensure the safety of their staff. Larger corporates and government tenancies have also made policy decisions to vacate a building deemed earthquake prone unless the property owner strengthens the building to an acceptable level. If a building is deemed earthquake prone tenants that vacate generally do not return, although, this is not so easy for smaller business or owner occupiers.

Also, to further exacerbate the pressure on the secondary accommodation rental space, in 2007 Ray McKimm of Big Save, purchased the old British and American Tobacco’s site (formerly Rothmans) and founded the Ahuriri Business Park which has been developing and expanding ever since. This has created an attractive alternative destination office precinct with its own cafes, easy access and ample parking for employees and customers alike.

The net effect has seen Napier’s CBD landlord’s respond to tenant preference and update and remediate their second-tier accommodation to attract tenants within the CBD. This together with the relocation of the civic tenancies throughout the Napier CBD has seen a huge proportion of this second-tier vacant office accommodation soaked up leaving a small amount of office space available. Also, in late March 2018 it was reported that the French based Accor Hotels network may purchase the four storey PwC Centre and turn what was previously office space into 50 serviced apartments. This will serve to only further reduce office accommodation in Napier and will result in upward rental pressure and thus values as supply is constrained.