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$115M Investment partnership announced
A new partnership agreement between Taranaki iwi has given PKW the opportunity to co-invest in an exciting property portfolio in central Wellington.
The investment in the land beneath the nine Crown-owned properties, some of which are high-profile buildings, will be in the vicinity of $115m once all the acquisitions are completed.
Settlement on four properties, Hutt Valley High School, Northland Primary School, Wellington Girls’ College and Te Aro Primary School for $50.35m was completed in early September.
The Tai-Hekenga Limited Partnership (Tai-Hekenga) has been four years in the making after PKW signed a Memorandum of Understanding (MOU) in 2015.
“This investment opportunity is another example of the mahi that has been going on behind the scenes to put our diversification strategy into action,” says Joe Hanita, PKW Chief Financial Officer. “It also shows the leverage Taranaki Māori can generate to take advantage of opportunities that become available by working together.”
Tai-Hekenga has been formed by Te Kāhui Maru Limited Partnership, Te Kīwai Maui o Ngāruahine Limited, Taranaki Iwi Holdings Limited Partnership, Te Atiawa Iwi Holdings Limited Partnership, Te Pou Herenga Pakihi Limited Partnership, Ngāti Mutunga o Wharekauri Asset Holding Company, Ngāti Ruanui Holdings Corporation Limited, Te Pataka o Rauru Limited and PKW with Taranaki Whānui Limited (TWL), the commercial subsidiary of the Port Nicholson Block Settlement Trust (PNBST).
Joe Hanita
The partnership began when PNBST were offered the chance to acquire the land from the Crown as part of its settlement agreement, but did not have the necessary capital to follow it through on their own.
“This opportunity has brought together a group of Māori investors with members or shareholders who whakapapa back to Taranaki to be part of a low-risk investment that will bring an excellent rate of return with minimal on-going costs,” says Joe. “Built on a foundation of whanaungatanga and kotahitanga, we are looking forward to the partnership going from strength to strength as we work together to deliver sustainable benefits for our Taranaki whānau.”
The properties will deliver a competitive rental income stream from a low-risk, long-term tenant (the Crown), along with an increase in equity as land values continue to rise.
PKW have committed $4.5m to the partnership, which represents around 2% of the $315m asset base it has under its stewardship.
“This investment aligns with our strategic approach of ensuring we have a balanced and diversified investment portfolio,” says Joe. “In essence, we are ensuring that we own a slice of lots of pies in order to spread investment risk and ensure long-term and sustainable returns for our shareholders.”
“We are continuing to build relationships and work in partnership with others to create opportunities that follow our diversification kaupapa to ensure we achieve our strategic goals.”
It is expected that the acquisition of the remaining five properties offered by the Crown, namely Archives NZ, National Library, Thorndon Primary school, Wellington District Court and Wellington High Court, will be confirmed by the end of the calendar year.
