Sir John Key, his son Max and property developers John and Michael Chow hope to raise $100 million within 18 months.
Sir John Key, his son Max and property developers John and Michael Chow hope to raise $100 million within 18 months.
Sir John Key, his son Max and property developers John and Michael Chow hope to raise $100 million within 18 months for a venture that would build 500 houses a year.
Stonewood Key Capital aims to raise money from qualifying or wholesale investors in schemes which Te Mana Tātai Hokohokothe Financial Markets Authority warns people should take professional advice on before entering.
John Chow, a Stonewood director, said the new fund was formed to raise $100m in less than two years to develop around 500 new homes annually.
"The joint venture is focused on raising capital from wholesale investors, with a goal of reaching $100m within 18 months," a statement out today said.
The Chows and corporate finance specialist Clint Webber bought Stonewood when it was in financial trouble in 2016.
At that time, KordaMentha were receivers of Stonewood Homes New Zealand, Stonewood Homes and Sterling Homes. Six years ago, 110 houses were unfinished and unsecured creditors were owed about $15m by the company which employed 85 staff.
Sir John Key with Michael and John Chow in 2020. Photo / Andrew Warner
Since then, the Chows have been running the national house builder in a move the Herald has called their reinvention.
The brothers, formerly prominent in adult entertainment, established the Mermaid strip club in Wellington in 2000, then expanded into other clubs and brothels. They had planned to build a multi-storey brothel complex in Auckland but that never went ahead.
But property is now their main focus and the new venture has been launched after Max Key said last week the new MTK Capital had started a new eight-home development in Massey.
Key said then that would soon launch a call to raise money to expand. MTK (Max Timothy Key) Capital has projects in three Auckland areas where 13 homes are planned or under way.
In 2020, Sir John Key appeared with the Chows when it was announced Stonewood Group had launched a business arm dedicated to raising capital to fund property development.
Stonewood Capital's launch was attended by ex-National leader Judith Collins and Key.
John Chow said today $20m already pledged to Stonewood Key Capital would be used on projects under way in St Heliers, Glenn Innes and Wai o Taiki Bay.
John and Michael Chow celebrate 25 years of being in business. Photo / supplied
The Chows own national group home builder Stonewood Homes but Chow said lack of land was creating problems for them.
Construction projects would be able to draw on Stonewood's procurement agreements with suppliers via its 19 franchised businesses.
"Partnering with Max and Sir John Key adds a new dimension to Stonewood Group and is an exciting new chapter in our businesses development," Chow said today.
Sir John Key said he always had a passion for real estate investment and viewed it as a sound asset class in this growing country that has long-term migration needs.
"New Zealand, with its property-owning democracy and historically strong migration patterns, makes property development a sought-after asset class," Key said.
MTK Capital's plans for Massey. Photo / supplied
He had known the Chows "for a long period of time and respected their business acumen, attention to detail and work ethic", a statement said.
Max and John Key, a Stonewood director - Steven Zhu - and John Chow were directors of the new business.
Wholesale or qualified investors are classed as sophisticated, with $750,000 to invest, although lower amounts can be taken.
BCI Central, which tracks house builders, lists Stonewood as the ninth busiest.
In the year to October, it built 296 new residences with an average 175sq m size. The total value of those places was listed as being $110m. The average value of a Stonewood house is $373,534, BCI said. That does not include the land - purely the new home on it.
