Close
 

Why would an Iwi partner with a property company?

  • Property
  • August 11, 2015
  • John Polkinghorne
Why would an Iwi partner with a property company?

The announcement from Tainui Group Holdings (TGH) last week that they would be looking to sell half of The Base will have taken some by surprise. With Westfield Chartwell and part of Centre Place also up for sale, all three of Hamilton’s major malls are now being marketed for sale at the same time. While the timing may seem odd, this latest move by Tainui may well reflect the changes in the property landscape.

Over the years, TGH has grown and evolved. Today, it is a diversified company with more than $1 billion in assets.

These include a number of hotels, various ground lease and other property interests, The Base and – significantly – a major landholding at Ruakura, which will be developed into an inland port (and housing, and industrial facilities…) in the decades to come. That’s certainly a lot for any one company to handle, and it’s not surprising that TGH would want to free up some capital to get things moving at Ruakura, and perhaps to diversify their asset base away from property.

The Base is New Zealand’s largest retail centre by floor area, including a substantial LFR centre, an enclosed shopping mall and a Dress Smart outlet centre. Even so, there’s still plenty of room to expand – at least seven hectares of undeveloped land, plus at-grade parking which could someday be developed more intensively.

Any potential owner is not just buying into an established retail centre, but a development opportunity, which could go well beyond just retail.

It has taken The Base many years to get to this point. The first stages opened in 2005, with planning starting several years earlier. The Warehouse, an anchor tenant for the first stage of the centre, was also a 50/50 joint venture with TGH. This arrangement lasted until 2007, when TGH bought out their partner to take 100 percent control. Today, the buildings at The Base are owned by Tainui Group Holdings, with the land leased to TGH by the Māori King. No doubt the details of that lease, and the formulas for rental reviews and so on, will be a factor in what the centre is perceived to be worth.

In the last few years, leasehold property has come in for a lot of criticism. However, the reality is that many developments in the years to come will be on leasehold land – the underlying sites may be owned by iwi companies, churches, councils, ports or other interests.

Much of the stigma around leasehold comes from uncertainty. The “ground rent” is reviewed every 5, 7 or 21 years, but there can be a wide range of views about what the rent should be. These debates are often played out between valuers at arbitrations, which can be an expensive and lengthy process. In the meantime, neither the lessee nor the lessor can really plan for the future. These models now seem a bit outdated. In Auckland, we’re now seeing leasehold sites like those at Wynyard Quarter having 150 years of ground rent paid up front, and capitalised into the purchase price. This gives certainty to both parties, and indeed Willis Bond’s 132 Halsey and Wynyard Central projects have been able to attract plenty of off-the-plan buyers.

If Tainui and any potential buyer can work out a deal that satisfies both parties and overcomes the hurdles, it could very well form a blueprint for other iwi looking to partner with other property companies in the future.

Likewise, a successful model could also be applied by many other institutions across New Zealand. Likewise, the questions of the best way to sell off part of a business while still retaining some control, and the most appropriate avenues for property companies to diversify into, are also important ones.

 With a Masters of Commerce degree in economics, John Polkinghorne is a property professional with vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy and analysis including location strategies to many New Zealand property owners, developers and city councils.

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

 

Gem Retail Hotlist: Benjamin Black and regional retail

  • News
  • December 12, 2019
  • Sarah Dunn
Gem Retail Hotlist: Benjamin Black and regional retail

Our 'Best provincial retailer: South Island' award was hotly contested in the Gem Retail Hotlist, but in the end, it was Nelson jeweller Benjamin Black that won. Find out more about this boutique craft jeweller.

Read more
 
 

The retail diary: December / January

  • News
  • December 11, 2019
  • Sarah Dunn
The retail diary: December / January

The Register and NZ Retail team has rounded up retail-relevant events and important dates for December and January.

Read more
 
 

Kiwis predicted to spend more on Christmas than Australians

  • News
  • December 11, 2019
  • Makayla Wallace-Tidd
Kiwis predicted to spend more on Christmas than Australians

New research has found that Kiwis will be spending up large on Christmas in 2019 while Australians will be taking a more conservative approach to the Christmas budget. However, Kiwis are still focused on trying to lower their Christmas spending, and retailers have been warned to keep pricing strategies transparent.

Read more
 

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

 
topics
Concept to closet
Business coverage of New Zealand Fashion Week.
Regional rollercoaster
What does retail look like in 2019 for ...
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
The future is bright
We spoke with four retailers in their twenties ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Sisterhood
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 
Sponsored content

Christmas music: to carol or not to carol

It’s that time of year again when retailers across the country ask themselves whether they should start playing Christmas music.

 
 

Gem Retail Hotlist: Allbirds' Tim Brown is our Retail Visionary

  • News
  • December 11, 2019
  • Catherine Murray
Gem Retail Hotlist: Allbirds' Tim Brown is our Retail Visionary

In the Gem Retail Hotlist, 'Retail Visionary' is one of our most special awards. This year we awarded it to Tim Brown of Allbirds. Here's the scoop on this innovative sneaker brand.

Read more
 
News

From concept to closet: New Zealand’s apparel industry in 2019

Held at the end of August, New Zealand Fashion Week is an annual focal point for local designers and those interested in their products. But ...

 
Next page
Results for
Topics
Jobs
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email anita.hayhoe@icg.co.nz or call 022 639 3004

View Media Kit

}