A giant of NZX property companies has won state consent to buy Auckland property in what could be a signal that it is about to advance its build-to-rent plans.
The Overseas Investment Office has just released its latest decisions where Kiwi Property Group was granted consent to buy 6ha ofAuckland land for housing or other purposes.
Kiwi is 60 per cent owned by New Zealand interests, 13 per cent North American, 9 per cent Australian and the rest owned by various overseas parties, and due to its foreign ownership, state consent is needed for it to buy housing land - banned to all other foreigners except Australians and Singapore.
Kiwi applied to buy a freehold interest in a single residential property in the Auckland region, not identified by area or address, for a sum suppressed under the Official Information Act.
Kiwi, with a market capitalisation of about $1.6 billion, has long wanted to develop build-to-rent apartments in Auckland, its chief Clive Mackenzie expressing strong interest in the concept.
A Kiwi spokesman said: "There's currently nothing to add beyond the information in the decision summary, but we'll share further details when there is."
Kiwi got consent to buy the land from an unidentified private New Zealand seller on January 28, winning a standing consent based on the increased housing/non-residential tests.
"This permits the applicant to acquire up to 6ha of residential, but not otherwise sensitive, land in up to 19 transactions by January 31, 2023," the office said.
"This is the first acquisition of land under the standing consent. The applicant intends to use the acquired land primarily for the construction of new residential dwellings, which will then be rented or leased out to non-associated third parties," the office said.
Under the standing consent, Kiwi must increase the number of dwellings on the land, or use the land for non-residential purposes, which may include retail, commercial, entertainment, car parking and community spaces.
In January, the office said it was satisfied Kiwi had demonstrated the investor test is met and was likely to comply with law due to its financial strength, previous activity regarding the use of residential land, and the previous record of complying with consent conditions.
Last week, the Property Council of NZ residential summit heard how Auckland's housing shortage could be solved via the rapidly emerging international build-to-rent concept - creating tenants for life.
Chris Key, managing director of Greystar Asia Pacific in Sydney, said Australia and New Zealand had high urban population concentrations but also housing shortages and build-to-rent meant apartments were never available for sale, only leased to tenants by businesses that owned them.
The concept was called multi-family in the United States where it was more common. Greystar did not have a presence in New Zealand but the business had built thousands of apartments globally, he said.
The sharing economy drove an appetite for more rental housing, he said: "A new generation of consumers wants to increasingly share vehicles, rent homes and borrow goods. I don't need a drill, I need a hole in my wall," one slide said.
Kiwi has been investigating building hundreds of apartments around its Sylvia Park mall at Mt Wellington, giving it a rising perpetual income stream with what will be tenants for life living in its new properties. High-rise apartments could rise in tall blocks on the edge of the mall site on flat asphalted land now used for parking.
Mackenzie has previously said of the city's tenancy scene: "More than half of Aucklanders are already renting and it's taking longer for people to save for a house deposit."
On the diversification front, Mackenzie said Kiwi would be "reducing pure retail as a proportion of our mix and investigating opportunities to increase our exposure to new asset classes such as build-to-rent apartments."
Covid-19 is likely to compound these trends, reinforcing build-to-rent's attractiveness as an asset class in New Zealand."