TDHL stops shopping for now

After spending $2.27 million on ‘‘strategic’’ property purchases in the past year, the Timaru District Council’s holding company is not planning to expand its nearly $50m portfolio in the near future.

Timaru District Holdings Ltd (TDHL) chairman Damon Odey said it was now in a consolidation phase after purchasing 101-123 Stafford St for about $1.7m in September and 26-28 Turnbull St for $570,000 in December.

Odey, who is also Timaru mayor, stands by the decisions as ‘‘strategic’’ purchases.

‘‘We don’t think we should be the developer per se. We’re a facilitator and enabler.

‘‘The purchases were to create a contiguous footprint. If we can provide a bigger footprint, we can enable and encourage development down that end of town.

‘‘That was a result of listening to the community, who for years had complained that very little had been done.’’

Odey said TDHL had not done any active marketing of the Stafford St properties, nor was it looking at buying any further properties in the central business district or at the Port of Timaru.

Besides the Stafford and Turnbull streets properties, the TDHL portfolio includes 30 addresses at the port with a total capital value of $46.753m and another property at the former A & P showgrounds site.

‘‘We don’t want to be seen as buying properties for the sake of it. The Stafford St purchases are part of a very special area.

‘‘You’ve got the civic building with Speights, you’ve got the Te Ana Maori Rock Art Centre, you’ve got the upgrade of the Theatre Royal and the creation of the Heritage Hub . . . all of these will add vibrancy to an end of town that might have been neglected in the past.’’

Odey said TDHL had a very ambitious debt repayment plan.

‘‘We’re committed to reducing council debt. Some people say ‘debt’s cheap’. Well today it is but there was a time when debt was 12 per cent. We need TDHL to be in a strong position financially so should an opportunity come along, it can take advantage of it.

‘‘TDHL is a tool outside of rates. As a council, I can only rate you for what I say I’m going to do.

‘‘You don’t have any discretionary income, and that’s where the council owning a company that’s financially strong and generating revenue comes into play. It helps soften some of the blow of rates, and gives us another stream of funding for projects. If we didn’t have TDHL, everything we do would have to come from either rates or debt or loans.’’

According to papers provided to councillors at a recent policy and development committee, TDHL, which also owns 50 per cent of PrimePort Timaru and 47.5 per cent of lines company Alpine Energy, is expected to pay a dividend to the council of $2.75m for the 2018-19 financial year, and $2.85m in 2019-20.

Odey said TDHL had worked hard to buy strategic assets at the port, aiming for a 7 per cent rate of return on the leasable port property portfolio.

Odey said TDHL wanted to show its benefit for the wider community. ‘‘Some people in the community have been saying ... TDHL is acting like an investment company. Well, we’re not a big investment company. We’re not running around spending money willy-nilly.’’