Property’s $8b source of strength
The amount of iwi cash in commercial property will increase as more tribes obtain settlements and others receive top-ups.
Ma¯ ori tribal organisations are likely to grow in wealth as the Crown concludes more treaty settlements – and commercial property players need to consider where they will invest.
Bayleys Tu Whenua director Ward Kamo said iwi assets had grown to more than $8 billion among 70 iwi and they had become key partners for people and businesses wanting to invest.
The amount under iwi control will grow with each settlement – as well as benefit other tribes that have already settled because of a special relativity clause, giving them top-ups.
When the South Island’s Nga¯ i Tahu settlement of $170 million was agreed, it was on the expectation the total amount for all tribes would be about $1b in
1994 dollars. The envelope was exceeded in 2012.
If settlements went beyond this amount, tribes that had settled would be entitled to maintain a proportionate payout through additional payments.
At the end of 2017 WaikatoTainui received an extra $190m, and Nga¯ i Tahu $180m.
These sums pale in comparison with the amount tribes believe they may be entitled to. Nga¯ i Tahu negotiators, for example, have estimated historical losses of up to
$15b. They are currently in mediation with the Crown over another payment after another recent payment of $18m.
Crown treaty settlement relativity clauses run until 2044 – meaning the value of all iwi assets will grow with each settlement.
Earlier settlements have shown that tribal organisations favour commercial and residential property investment and development.
Kamo said that in Auckland alone there are 13 tribes in the process of settling. While they may only be settling for $12m, they have first rights of access to Crown land and are looking for partners.
According to figures collated by economic consultancy TDB Advisory, the debt levels of many of the iwi groups profiled were non-existent, with the most active investors, Nga¯ i Tahu, Nga¯ ti Wha¯ tua O¯ ra¯ kei and WaikatoTainui, having debt of between 10 per cent and 17 per cent. This was low compared with most New Zealand companies.
Kamo said the two largest commercial property players – Nga¯ i Tahu and Waikato-Tainui – were an example of a way forward.
‘‘The commercial property sector provides a sound investment option for many, with a steady outlook on growing returns in a growing economy. Tougher bank lending criteria will have a role to play in iwi plans. In the current market, those with relatively clean balance sheets will be able to flex their muscles.’’
Kamo said iwi also tended to look at social and cultural benefits, and some assets might not produce commercial returns but supported social development or helped the iwi to accumulate land for the future.
Waikato-Tainui’s commercial arm, Tainui Group Holdings, has commercial assets from Auckland Airport to Kawhia.
It plans to build an inland port on 480 hectares in east Hamilton in conjunction with Linx Cargo Care Group and one of its subsidiaries, C3, to develop and operate the port.
Nga¯ i Tahu Property has completed commercial and residential property developments over the past two decades in Christchurch, Dunedin, Queenstown and Auckland.
Nga¯ i Tahu Property’s landmark development, Christchurch Civic Building – Te Hononga, was opened months before the earthquakes that devastated the city but was relatively undamaged.
Its more recent $110m Pita Te Hori Centre/King Edward Barracks development in central Christchurch is another leap forward for the group.
Dubbed the most energyefficient office buildings of the rebuild, the development houses corporate and government tenants including EY, Aurecon, Vero, the Ministry of Education and the Ministry of Health.