Capital Markets: Ruakura joint venture showcases growth of Māori economy

A Government document says Māori “want what you want: Public Private Partnerships for strategic infrastructure delivery, end-to-end solutions or project packages, fair commercial returns and project delivery assurance”.

In Waikato, the Tainui deal with Brookfield left one leader euphoric.

Tukoroirangi (Tuku) Morgan, the chairman of Waikato-Tainui’s executive arm, Te Arataura, said at the JV announcement last month that the deal was transformative.

“It is pretty difficult to find the appropriate words in order to explain the euphoria, the sense of achievement, the scale of the opportunity that has come as a result of this partnership.”

Initially, the joint venture will purchase four existing industrial and logistics buildings at the site, tenanted currently by Kmart, Big Chill, Refrigafreighters and PBT Express.

The land will remain in Waikato-Tainui ownership. The 610ha precinct has a forecast completion value of more than $1b.

Toronto-based Brookfield Asset Management was one of the big players at the Government’s Investment Summit in March and has more than US$1 trillion of assets under management, including $1b allocated to New Zealand where it has been operating for nearly two decades. The relationship with Tainui aligned with the message the Government was pitching over the opportunity to partner with iwi.

Brookfield co-head of Australia and New Zealand Real Estate Ruban Kaneshamoorthy said a strong partnership was a key factor in getting the deal done.

“We are very selective with who we partner and being able to find TGH ... they’ve really impressed us in terms of the quality of the institution that they are, their level of detail and how they’ve really approached us, embraced us, but really brought through the investment.”

Kaneshamoorthy said his firm was open to business with other iwi.

The deal with Tainui – which has assets of $2.4b – wasn’t only about economic upside but the ability to make an impact from a social perspective; jobs.

The JV will initially purchase four existing industrial/logistics buildings on long-term ground leases at the Ruakura Superhub, where partners will develop a further 70ha of logistics development in what is New Zealand’s major supply chain corridor.

TDB Advisory researches the size and scope of the Māori economy and director Phil Barry says partnerships with iwi can offer substantial benefits for both parties.

“Of course large scale partnerships like this [Tainui-Brookfield] don’t just happen overnight,” Barry said.

“You’ve got to build up a track record of good governance, stability and investment success for large international investors to take you seriously.”

The Māori Development Minister, Tama Potaka, who spoke at the summit, said the release of Te Ōhanga Māori – the Māori Economy 2023 report by the Ministry of Business, Innovation and Employment (MBIE) showed iwi and Māori organisations have formidable financial muscle along with a wealth of cultural insight to invest with international organisations in major government infrastructure projects.

The Māori economic contribution to the New Zealand economy had grown from $17b in 2018 to $32b in 2023.

Though agriculture, forestry and fishing were the primary contributors to GDP in 2018, professional, scientific and technical services led the way in 2023.

“Growing the Māori economy is about jobs and growth for all Kiwis. When infrastructure is built, employment rises and everyone benefits. That’s why this Government is so focused on economic growth,” Potaka said.

The MBIE report found that in the decade to 2023, Māori business activity has increased in a range of industries, including construction, retail trade and services such as information media.

But access to capital is a barrier for Māori businesses.

“Iwi and Māori are saying we’re here, we’re open for business, and we want to partner with the Government and with the world,” the minister said.

Tainui’s portfolio also includes dairy, forestry, fishing, commercial property, retail shopping malls and hotels, including at Auckland Airport. In a video released at the summit for potential partners, it says the iwi is investment-ready.

“It’s an experienced corporate partner and welcomes inquiries from international investors.”

Eight tribal entities in Taranaki are invested heavily in the primary sector.

Energy efficiency and environmental resilience are key aspects that inform the investment strategies in this area.

South Island giant Ngāi Tahu’s territory covers about 52% of Aotearoa’s land mass and 46% of its exclusive economic zone.

The South Island’s unique geography, climate and geology creates opportunities for renewable energy and infrastructure investment, it tells potential investors.

Ngāi Tahu Holdings owns and operates in property development, farming, forestry, seafood and tourism businesses, alongside a diverse portfolio of other financial investments.

Ngāi Tahu is actively investing in large-scale infrastructure and seeking partners who align with its values and intergenerational investment approach.

Cultural interests and the intergenerational investment horizon were highlighted at the summit as key points of difference globally and competitive advantage in key markets.