US fund targeting 'distressed' NZ real estate
Jumpstart Capital Partners, a privately-owned American real estate investment company, says it is putting together a $US100 million ($NZ158 million) fund "to "capitalise on distressed and undervalued real estate assets" in New Zealand.
The fund, named Jumpstart Capital Asset Management, is being driven by an executive who has previously raised money in a separate venture to invest in Queenstown's Jacks Point subdivision.
Jason Michael Neal, chief executive at Los Angeles-based Jumpstart Capital, is also a director of Strata Development Group (NZ) Ltd, which invested in houses at Jacks Point.
About a quarter of Strata's shares are held by Strata Development Group LLC, a joint venture between Jumpstart Capital and American investor Andy Funk, of Santa Monica set up in 2004.
The men paid $3.37 million for 0.87ha of land at the Jack's Point development near Queenstown to build 12 luxury homes.
Mr Neal said at the time the homes were expected to sell for "well over" $1 million each and would set a new benchmark for New Zealand, with each having a private 12 to 14-seat cinema, a wine cellar and access to a gym, and a pool.
Now he says the new $US100m fund will buy commercial and residential real estate, real estate-related assets and land development projects.
"The firm has secured a seed investment which comprises a majority stake in a resort development," he said.
Mr Neal told potential American investors that investments made in the "safe haven" of New Zealand can produce an internal rate of return of more than 40 percent.
"Fund managers in the United States and Europe are scrambling in a competitive environment to raise capital for domestic real estate transactions that may not be profitable for years because of wider economic and political implications," he said.
"Smart money is now being invested in countries that offer resilient stable economies, attractive foreign investment and tax policies, and can be classed as safe havens. New Zealand is one of the few countries that fit this profile"
"The fund has already secured an anchor investment that comprises a majority stakeholding in a prominent resort/master-planned community development".
Jumpstart Capital had exclusive rights to participate off-market and at wholesale valuations in other resort and planned communities in New Zealand.
"Alternatively, the fund plans to acquire primarily income-producing distressed assets in select locations".
A project manager at the Jacks Point subdivision, John Darby, recently said large-scale commercial and village development around the Jacks Point golf clubhouse and lake edge -- in conjunction with Canadian resort developer Intrawest -- are on hold but will be reviewed next summer.
The last 100 unserviced sections in the initial 700 offered at Jacks Point are being sold at an undisclosed price to Dunedin City Council-owned electricity contractor, Delta.