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Banks, consultants and law firms dominate state house sales


bankInvestment banks, law firms and international infrastructure investors are showing an interest in buying state houses.

On Wednesday night the Treasury released a list of those who had attended its latest roadshow on state house transfers.

While the Government said it welcomed the interest, Labour said it showed the private sector was seeking to profit at the expense of taxpayers.

National has said it will sell up to 2000 state houses to community housing providers this year, starting in Invercargill and Tauranga, using proceeds elsewhere - including on more state housing in high demand areas. In the coming years thousands more houses could be sold.

While the sales are targeted at charities, the meetings to discuss the process have attracted dozens from the finance sector.

Representatives from all of New Zealand's big banks attended the meetings, as well as law firms Chapman Tripp, Bell Gully and Anderson Lloyd, and international investment firms Macquarie Capital and Deutsche Craigs.

In recent days it emerged that a representative from Queensland-based Horizon Housing Company had expressed an interest, raising questions about whether profits from the sales would end up offshore.

The list released on Wednesday showed Australian representatives from Plenary Group, an international infrastructure business also attended at least one of the meetings, as well as UK-based infrastructure investors John Laing.

New Zealand investment banks have also shown an interest, including HRL Morrison & Co and its well known investment fund Infratil, as well as Rockpoint and JC Capital.

Social Housing Minister Paula Bennett said she welcomed the corporate interest.

"It means that they are interested and how they can use some of their strengths to partner with community housing organisations," Bennett said, with existing community housing providers inevitably not having the funds at hand to take part in the sales on their own.

"There is strong interest, we've seen it in the numbers of people who have been turning up and also in the very thoughtful and insightful questions that they've asked."

All up 168 people are listed as having attended the meetings, including from a number of charities.

This includes Major Campbell Roberts of the Salvation Army and his colleague Fiona Matthews. In March the organisation said it had "decided against negotiating with Government for the transfer of Housing New Zealand stock".

Bennett said despite the public comments the Salvation Army had continued to show an interest in the process as well as taking an active role in other social housing programmes with the government.

"I don't see the split in the relationship that the media sometimes portray."

Bennett said the government would now move to stage two of the programme, where it would decide whether there was sufficient interest to launch a formal request for proposal for the sales.

A decision on whether to proceed would be made in the next fortnight, Bennett said.

"From what I've seen it's looking quite positive."

Labour housing spokesman Phil Twyford said while the list included a number of good community groups it was "dominated by lawyers, banks, consultants and developers, who obviously have spotted an opportunity to make a dollar at the expense of the taxpayer and get their snouts in the trough."

The grouping of charities and commercial groups exposed a contradiction in the process, Twyford said.

"They [the Government] started off trying to sell the policy as providing better social services to vulnerable people in the community," Twyford said.

"In order to do that, they are effectively forcing small social service NGOs [non government organisations] to get into bed with merchant bankers and property developers."

 

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