Tainui to sell half of The Base

The Warehouse at The Base shopping centre at Te Rapa. Owner Tainui is selling half of its stake in the centre. Photo/ Christine Cornege

Tainui Group Holdings (TGH), the investment arm of the Waikato tribe, plans to sell as much as 50 percent of its The Base shopping centre in Te Rapa, northwest Hamilton, using the funds to repay debt and for other investments.

The underlying 30 hectare site, which was taken prior to World War II for use as the Te Rapa Air Force Base and returned to the tribe in 1995, would remain in Tainui ownership, it said.

"Following a three month review we believe that now is the right time to seek an experienced joint venture partner and operator to help us take The Base to the next level of excellence," said TGH acting chief executive Chris Joblin . "We want to ensure that our retail tenants and shoppers continue to have an experience up there with New Zealand's best, and to diversify the investments of Waikato-Tainui."

In 2009, TGH said it had invested $100 million developing The Base and had committed a further $100 million to develop the shopping mall. It has reportedly been valued at $250 million. The property was run as a joint venture with Warehouse Group from 2002 until 2007, when TGH bought out the retailer's stake in the joint venture company for $37.4 million.

"The move to sell a stake in The Base will release a significant amount of capital for TGH which it will use to reduce debt and re-invest in a balanced range of investment classes to grow jobs, increase cash returns to further tribal objectives, and extend the land estate for Waikato-Tainui," Joblin said.

TGH is focused on new projects including plans to develop 800 hectares at Ruakura, north of Hamilton, into an industrial park, new housing and an "inland port" transport hub to marshall growing freight volumes between Tauranga and Auckland. TGH and partner Chedworth Properties are planning to spend around $3.3 billion over a 30 to 50 year development project.

TGH has built up its assets to be worth more than $875 million, having received its $170 million settlement with the Crown 20 years earlier.