Iwi investments – the big chiefs in NZ’s commercial property base
Supporting tribal development in every facet is central to the ethos of Iwi so it follows that commercial success is a major part of how that vision plays out.
Statistics NZ says there are some 140 New Zealand iwi , with the majority in the North Island.
With iwis’ Treaty of Waitangi claims being settled by the Crown, greater opportunity has come for tribes to redefine their assets and how these will be developed over time to provide for the next generation. Unsurprisingly, property and specifically commercial property features strongly in hapu-iwi asset portfolios, particularly the bigger players.
What iwi want is a long-term investment offering a good return, which is why more and more they are choosing commercial property, Bayleys commercial and industrial national director John Church says.
“Iwi are going to assess commercial property against other potential investments such as term deposit and see the opportunities it offers. There really is no comparison – commercial property is doing really well for a long-term investor, particularly in large metropolitan areas of New Zealand where we’re seeing steady growth,” he says.
Hapu-iwi located close to large urban areas have an advantage when it comes to investing in commercial property because of the return capabilities of the investment, Mr Church says.
“Property development in New Zealand has gone through a series of changes in the past 20 years in particular, and what we are seeing is very much development focused toward satisfying the demands of increa singly sophisticated customers, who are shaping the development of commercial property.”
Property investment makes up the significant part of South Island-based Iwi Ngai Tahu’s asset portfolio.
In 1998, as a result of the Ngai Tahu Claim Settlement Act, Ngai Tahu received a settlement sum of $170 million. It later also received fisheries and aquaculture assets valued at $71 m.illion
Today, Ngai Tahu Holdings’ owns an enviable $1.1 billion in assets. Of this, Ngai Tahu Property has a portfolio worth $600 million, made up of residential, commercial and farming property investments. The balance of the Iwi’s assets include healthcare services, tourism and fisheries investments.
Commercial property simply makes sense as an investment, says Christchurch-based Ngai Tahu Property chief executive Tony Sewell.
Building a commercial portfolio focused on diversification and long-term vision has supported the tribe’s development and given the company a point of difference and competitive edge, Mr Sewell says.
“We always take a long-term view as we’re intergenerational. We’re also strongly customer focused – we like to build long-term relationships with our tenants and, as they grow, grow with them.”
Ngai Tahu’s commercial property portfolio features the courthouses in Queenstown and Christchurch, Dunedin and Christchurch police stations and the Christchurch Department of Conservation building.
The tribe’s development portfolio includes one of Canterbury’s largest planned residential land developments at Wigram, due to be completed in five years. The completed community will include a shopping centre and a school.
Investment decisions are largely based on the nature of the property and to a lesser extent, geographic factors. The strength of the return “is a given” when considering property, Mr Sewell says.
Another iwi considered one of the most successful in the realm of property investment is Waikato-Tainui. Along with Ngai Tahu and Ngati Whatua Orakei, Waikato-Tainui has realised value from land settlements, which it has continued to invest, NZ Property Council chief executive Connal Townsend says.
Since a $170m Crown settlement in 1995, Waikato Tainui’s assets have grown to $738 million. The figure recognises how the iwi’s investment portfolio has evolved, says Tainui Group Holdings (TGH) chief executive Mike Pohio.
Like Ngai Tahu, community focus remains central to the tribe’s asset building, with decisions anchored around making contributions to essential services and amenities.
Also similarly, Tainui Group Holdings has largely invested in buying or developing commercial properties with long-term tenants with whom the Iwi can build lasting relationships.
The current portfolio includes the University of Waikato, Wintec, Huntly power station and flagship asset, New Zealand’s largest shopping centre, The Base, in Hamilton.
In the Eastern Bay of Plenty, Ngati Awa’s property investments make up less than 5% of the tribe’s $120 million total asset portfolio.
The reasons for this, says Ngati Awa Group Holdings director Graham Pryor, are the tribe’s location, which has a lack of commercial opportunities. Assets are largely made up of forestry, fisheries, farm land, shares and bonds.
Auckland-based hapu Ngati Whatua Orakei’s commercial arm owns assets totalling $500 million-plus and as such it is considered one of the biggest players alongside Ngai Tahu and Waikato-Tainui. The assets stretch across Auckland from Orakei to Glen Innes, Mt Albert, Bayswater on the North Shore and Auckland CBD.
New Zealand hapu-iwi are continuing to build commercial assets across the country to spread risk, with many also keen to do joint ventures with other key players to maximise their skills base.
Several iwi want to grow their business by extending throughout New Zealand to areas where they see growing opportunities, Mr Church says.
Many are looking to follow the financial success of Tainui Group Holdings, Nga Tahu and Ngati Whatua Orakei through investing in commercial property, he says.
“As investors they are spreading their risk, both geographically and across investing in office, mixed-use and other commercial developments. It’s an exciting time for Iwi and indeed, all investors in the commercial property sector.”