Construction tech could cut millions from NZ’s infrastructure budget
Wednesday, 25 March 2026
New Zealand has large holes in civic infrastructure that need filling, but using some new “world-first” construction technology could help cut the costs of building it, an Australian infrastructure giant says.
And the company, ASX-listed Dexus, points to the recently completed $290 million Te Rua Archives building, one of the properties in its New Zealand portfolio, as an example.
Te Rua, which officially opens on Wednesday, is said to be the most technically demanding building ever constructed in New Zealand.
It was designed to remain operational after a one-in-1800-year earthquake, and must maintain temperature and humidity within a one-degree tolerance for at least 48 hours in a power failure to protect taonga and government records it holds.
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Phill Stanley is the New Zealand portfolio manager for Dexus, which has a NZ$1 billion plus portfolio in real estate and infrastructure assets in New Zealand.
He said the development used digital twin technology from global construction software provider, Autodesk, that was specially customised for the Te Rua project.
The digital twin generated a 3D virtual design environment that allowed architects, engineers and contractors to identify and resolve design “clashes” before they occurred on the physical site, he said.
“These errors are common in complex projects and can cause major delays and cost blowouts, so identifying them early on can reduce cost overruns by millions of dollars.
“It meant the contingency spend on this project was 5%, compared to the industry average of 10%. That reduction on a $290m project is a significant saving,” he said.
“Imagine what those sorts of savings on the projects in New Zealand’s $275b infrastructure pipeline would look like - although no two projects can be treated the same, you’d get some pretty big cost reduction numbers quickly.”
Reduction in emissions
After construction, the digital twin technology was used to help with building operation and maintenance, and could help reduce the operational carbon emissions of a building by up to 80%, he said.
“This technology really does lift the bar in a way we have not seen before. It shows what is possible when everything is coordinated from day one.
“The scale of the model and the accuracy behind it are unlike anything we have worked with in New Zealand. For us, it gave a level of design certainty you just do not get on projects of this complexity.”
Stanley said Dexus, which took pride in being at the forefront of its industry in innovation, would be using the digital twin technology in other projects going forward.
But the company believed there were huge opportunities in the technology for building and maintaining the pipeline of civic infrastructure that New Zealand needed, he said.
“It’s particularly suited to hospitals that have high service density and heavy environmental loadings, and has clear applications across New Zealand’s planned healthcare infrastructure spend.
“These facilities rely on uninterrupted power, complex mechanical systems and precise climate control and even minor faults can create clinical risk.”
“Digital twins could help control costs, reduce construction delays and ensure clinical spaces meet strict operational and environmental requirements from the day they open.”
New Zealand had been slower to adopt digital design, but there was now a chance to reset industry practice at the design-build and the operational stages of a building’s life, he said.
$57 billion portfolio
Dexus has a NZ$57 billion commercial real estate portfolio across office, industrial, retail, and healthcare, and a separate NZ$12b infrastructure portfolio. It is known as Australia's largest office property owner and manager, and specialises in high-quality CBD office towers.
The company’s New Zealand holdings include the Bayfair Shopping Centre in Mt Maunganui, the Botany Town Centre in Auckland, office buildings in Auckland and Wellington, and NZ Hospital Car Parks.
It is also a majority owner of New Zealand gas and electricity distribution company Powerco, and the largest shareholder in the privately run Auckland South prison.
Most of its New Zealand assets - including Te Rua Archives - were acquired from AMP Capital, when Dexus bought its real estate and infrastructure equity business in late 2023.
While the company’s New Zealand interests make up a small part of its total holdings, Stanley said it wanted to continue its local investment pathway and deliver more great assets.
“There are no specific deals we can announce yet. We are in discussions with a number of players, and these projects take a long time to work through.
“But New Zealand has large holes in civic infrastructure that need to be filled, and significant investment will be required for that.’
Te Rua, which was delivered in partnership with the Government, was an example of how public private investment projects could work successfully, he added.