Tainui grows asset base to $738m

Nearly $21 million has been spent improving Te Awa The Base retail centre in Hamilton. Photo / Christine Cornege

Property investment and development company's chief says rate of profit rise slowed because of major projects

Yesterday, Tainui Group Holdings and Waikato-Tainui Fisheries released an annual result for the March year showing net profit rose from $39.9 million to $45.1 million.

The iwi's riches are growing fast.

Assets stood at $479.1 million in the March 2009 year, rising to $529.4 million by 2010 and $658 million by 2011.

But increasing profits from the bigger asset base are a longer-term play.

Mike Pohio, Tainui Group Holdings chief executive, said the rate of profit increase had slowed because of several major investment projects and $20.9 million had been spent improving Hamilton's Te Awa The Base retail centre.

Plans there had changed.

"An auto precinct will not now proceed and first-floor retailing ... and a multi-level carpark will both be deferred until there is an increase in market demand and a better return on capital," Pohio said.

"For the year ahead, capital spending there will continue but at a lower level than in the past."

Tainui Group Holdings is the commercial entity of Waikato-Tainui and is a property investment and development company with retail, residential, commercial, industrial and rural real estate.

The group also manages Waikato-Tainui Fisheries, which owns and leases fishing quota and holds shares in Aotearoa Fisheries. Its headquarters are in Hamilton.

Operating profit was steady at $20.8 million, compared to $20.7 million the previous year,and overall debt levels were 25.3 per cent of total assets.

Pohio said the group was committed to a decade-long 700-section housing subdivision at Rotokauri near The Base, pending resource consent.

Next year's big focus was the $4 billion joint venture development with Chedworth Properties at Ruakura, Pohio said.

Tainui hopes to develop a massive commercial inland freight hub there, projecting 6000 to 12,000 jobs will be created, more than 2000 houses will be built and the Waikato area's GDP will increase by $4.4 billion.

Last month, Tainui expressed frustration over the threat of local red tape strangling its plan for the project and had threatened to go over the Hamilton City Council's head to the Government.

Pohio said many projects took some years before they paid off.

"Returns from further investment property developments are limited by very long lead times as well as the cost of debt, so this is not a short-term solution," the Tainui chief executive said.

"The company therefore intends to invest in a limited number of property development projects and private companies over the next three to five years."