The NZ Super Fund is making its first direct foray into the Auckland housing market.
It’s partnering with Ngāi Tahu Property Limited and private equity fund New Ground Capital, and investing in a $113 million housing development at Hobsonville Point.
The Super Fund and Ngāi Tahu are each investing 48% of the capital required for the development, which will see around 200 new homes developed by late 2018.
The investors will purchase 1.95 ha of former NZ Defence Force land from the Hobsonville Land Company, a subsidiary of Housing New Zealand. Construction will then begin in the second quarter of 2016.
Around 50% of the properties will be priced under the Auckland median house price and 30% will be priced at $550,000, or below under the Hobsonville Point affordable homes programme.
The development will offer a mix of housing types, ranging from apartments and terraced housing, through to standalone houses.
The partners plan to sell around three-quarters of the homes as they are developed, and hold the remaining quarter as market-based long-term rentals.
While the NZ Super Fund has invested in property through external managers here and overseas before, this will be its first direct property investment where it hasn’t gone through an external manager.
It has invested, via manager Willis Bond, in Clyde Quay Wharf for example – a development on the Wellington waterfront that comprises 76 premium apartments and a retail and office space.
The Fund’s move to invest in Hobsonville comes further to its chief executive, Adrian Orr, indicating in an interest.co.nz Double Shot interview in August, that it was interested in investing in Auckland housing.
He noted the Fund could provide capital and some capability around financial management, but needed to partner with entities with access to land and building capability.
While the Fund says it isn’t eyeing any other specific Auckland property investments at the moment, it’s always seeking new opportunities, especially to partner with iwi.
With the deal being the first co-investment between the NZ Super Fund and Ngāi Tahu, the Fund’s chief investment officer, Matt Whineray, says Ngāi Tahu was an attractive co-investor.
“We have compatible values and our collective scale has been integral to the feasibility of this investment. We look forward to working with Ngāi Tahu’s highly experienced property development team,” he says.
Ngāi Tahu Property’s incoming CEO, David Kennedy, says the company sees this project as a perfect entry into the Auckland market, and an opportunity to develop a strong partnership with the Fund.
“Ngāi Tahu Property chooses to align with organisations that exhibit a value set that mirrors our own, values that go well beyond a financial framework,” he says.
Kennedy adds that Hobsonville Point had proven to be a successful master planned development, with excellent amenities.
Ngāi Tahu will act as development manager, overseeing the construction of the houses, while New Ground Capital will run the rental component of the investment.