June 2005 decisionsGuardian Healthcare Group takes over Care and Independence rest homes United Group Rail of Australia buys Alsthom Transport New Zealand Ltd Approval for Sky City to take 100% of the SkyCity Hamilton casino GMO takes 38% of Wenita Forest Products Progressive Enterprises buys North Shore land for supermarket development … … buys back 10 leases including one in Dargaville… … and promptly sells the Dargaville property to Multiplex… Fletcher Residential buys Seven Oaks, Auckland housing development AMP buys land in Nelson for bulk retail development … … and in Tauranga for a supermarket development Centro buys remains of Barrington Mall, Christchurch… … and sells the entire Barrington Mall on to a funds management subsidiary Vineyard lifestyle subdivision at McArthur Ridge, Alexandra
Guardian Healthcare Group takes over Care and Independence rest homesGuardian Healthcare Group Limited, owned 82% in the U.S.A. and 18% in Australia, has approval to acquire the “the New Zealand based rest home retirement village business” of Care and Independence Limited and Care and Independence Charitable Trust of New Zealand for $31,540,000. This includes 4.4 hectares at 19 Liston Avenue, Taupo, Bay of Plenty.
Guardian Healthcare Group “owns and operates facilities providing healthcare, aged care facilities, retirement villages and other services throughout New Zealand”. This is part of a major recent trend by commercial groups controlled by investment companies, such as Guardian and Macquarie, to take over aged care facilities from non-profit organisations. The sector is under pressure from rapidly increasing numbers of clients (seen as a growth opportunity for the commercial providers), inadequate but increasing government funding, and rising costs due to increasing needs of residents and the recent pay equity wage increases for public hospital nurses which are having consequential effects on nurses in other areas.
Investment company Pacific Entity Partners bought out the formerly locally owned Guardian in 2004 (see our commentary for November 2004 for further details). The OIC then described PEP as “an Australian based private equity management company that invests in management buyouts, industry consolidations, divestitures, late stage venture capital opportunities and other complex merchant banking situations.” Guardian was at that time “New Zealand’s largest private owner/operator of rest homes and hospitals”. [Decision number 200510076.] United Group Rail of Australia buys Alsthom Transport New Zealand LtdUnited Group Rail Pty Limited, owned by United Group Limited of Australia, has approval to acquire Alstom Transport New Zealand Limited for a suppressed amount from Alstom New Zealand Limited, owned by Alstom of France.
According to the OIC,
The Applicant, who is a wholly owned subsidiary of United Group Limited, an Australian Stock Exchange listed company, proposes to acquire all of the ordinary shares in Alstom Transport New Zealand Limited (ATNZL), as part of the acquisition of the Alstom transport business in Australia and New Zealand. ATNZL is a company whose principal business is the provision of inspection, maintenance and overhaul services for rail locomotives and wagons to Toll New Zealand Consolidated Limited.
The Applicant advises that the acquisition of ATNZL is a logical fit to its business and provides further growth opportunities, as the Applicant has proven experience in ATNZL’s two key operating areas, being rail services and infrastructure services and maintenance.
Although the price was suppressed, Alstom Transport explained in a news release on the sale of the entire Australasian operation:
ALSTOM is to receive as consideration on completion a base purchase price of AUS$267,5 million (app. €165 million) and could receive up to an additional AUS$30 million (app. €18 million) based on future financial performance. (“ALSTOM signs agreement with united group for sale of Australian & New Zealand Transport Business”, Alstom Press Release, 2/6/05)
Alstom also sold its worldwide transmission and distribution operations to AREVA of France in January 2004, and the Australasian operation has since been onsold by AREVA to Transfield Holdings – see our commentary for March 2005 for further details. Its Power Services division appears to be all that is left in Aotearoa. At its peak, Alstom was enthusiastically running a number of privatised services in Aotearoa. [Decision number 200510084.] Approval for Sky City to take 100% of the SkyCity Hamilton casinoSky City Entertainment Group Limited has approval to acquire 100% of Sky City Hamilton Limited for $33,000,000 (for the remaining 30%) from Riverside Trust of New Zealand. Sky City already owned 70% of the shareholding in Sky City Hamilton Limited, the other 30% being owned by the Riverside Trust. Sky City Entertainment received OIC permission to go to 70% ownership (from 55%) in July 2004. See our commentary for that month for further details
Sky City Hamilton Limited owns the Hamilton Casino, SkyCity Hamilton. The casino is operated by a subsidiary of Sky City Entertainment. The OIC states: “The acquisition will enable SkyCity to fully integrate the SkyCity Hamilton operation within its New Zealand businesses, and enable it to achieve corporate, operational management and funding efficiencies.”
The OIC shows Sky City Entertainment as being owned as follows: · 26.91% – Australia · 5.09% – U.S.A. · 4.88% – U.K. · 3.85% – “Various overseas persons” · 59.27% – Aotearoa [Decision number 200510075.] GMO takes 38% of Wenita Forest ProductsFund 7 Foreign LLC, owned by three companies in the GMO group of the U.S.A. (56.89% GMO Forestry Fund 7 International LP, 26.18% GMO Forestry Fund 7-B LP, and 16.93% GMO Forestry Fund 7-A LP) has approval to acquire 38% of Wenita Forest Products Limited for a suppressed amount from Cambium Fund II, L.P of the U.S.A.
GMO is a subsidiary of Grantham, Mayo, Van Otterloo and Co., LLC, a major forestry and property investor in Aotearoa.
Wenita owns 5,839 hectares in Otago comprising: · 5,830 hectares in forests at Mt Allan forest, Taieri Gorge; Waronui forest, Clutha; and Brocks forest, Waihola; and · 9 hectares at Rosebank Sawmill, Balclutha.
The OIC states:
The Applicant is an investment fund established and managed by Renewable Resources LLC (RRL) for investment in timberlands outside of the United States of America. RRL manages international forest investments including approximately 27,000 hectares in New Zealand comprising Crown forestry licences, forestry rights, leasehold and freehold land.
Wenita Forest Products Limited (Wenita) and its subsidiaries own and operate the Rosebank sawmill located at Balclutha, own and manage forest estates (including forestry rights and the freehold land) and trade in forest products, both domestically and internationally. The forest estate comprises approximately 23,000 hectares of pinus radiata with some alternate species. The age of the forest ranges from 0 to 30 years. Approximately 75% of the forest estate is second rotation.
The other 62% of Wenita is owned by Sinotrans (China National Foreign Trade Transportation (Group) Corporation), according to Wenita’s web site (http://www.wenita.co.nz/intro.html, 14/11/05). Sinotrans is
one of China’s large central enterprises approved by the State Council, and was established in 1950 to manage the transport of foreign trade into, out of and across China. Sinotrans has 67,000 employees and total assets in excess of US$2.5 billion. Wenita is Sinotrans only investment in forestry. The investment was made in 1990.
The 38% which changed hands here has gone through a number of owners in the last few years. [Decision number 200510085.] Progressive Enterprises buys North Shore land for supermarket development …General Distributors Limited, owned by Foodland Associated Limited of Australia, has approval to acquire 3.3 hectares of leasehold at 4-25 Don McKinnon Drive, North Shore, Auckland for $24,254,100 from Symphony Projects Limited, owned by the Symphony Group Limited of Aotearoa.
It will be used for a new supermarket owned by FAL subsidiary Progressive Enterprises Ltd, which runs the Foodtown, Countdown, Woolworths, FreshChoice and SuperValue groups.
The OIC states:
The Applicant is a wholly owned subsidiary of Progressive Enterprises Limited (Progressive), an operating division of Foodland Associated Limited a company listed on the Australian Stock Exchange. Progressive is a New Zealand grocery wholesale and retail operator operating under the Foodtown, Countdown, and Woolworths supermarket banner groups and is also the franchise co-ordinator for the FreshChoice and SuperValue banned groups. Progressive operates 150 supermarkets with a 45% market share in the New Zealand grocery market.
The Applicant proposes to lease the subject land for the purposes of a supermarket development. The proposed development to be carried out will include a medium to large format supermarket (being approximately 5,000 to 10,000 square metres) for the retail sale of groceries and/or general merchandise or such other products or services normally provided by a supermarket. The proposal is in line with Progressive’s strategy of acquiring an interest in well-located sites that can be developed for supermarket complexes. [Decision number 200510079.] … buys back 10 leases including one in Dargaville…General Distributors Limited, owned by Foodland Associated Limited of Australia, has approval to acquire 1.2 hectares at 1-12 Gladstone Street, Dargaville, Northland for $5,100,000 from Pernik Investments Limited of New Zealand.
It is one of ten properties leased by General Distributors (a Progressive Enterprises Ltd subsidiary – see above), which it is buying back in order to change the conditions of the leases. As will be seen in the next two items, it quickly onsold it to Multiplex at a higher price, and then bought back the leasehold, presumably on better lease conditions.
The OIC states:
The Applicant is acquiring the subject property as part of a transaction to acquire the freehold interest in 9 properties and 1 leasehold interest from the vendor. The properties are currently leased, under varying term leases, from the vendor by the Applicant. The Applicant proposes to establish uniform long term lease interests in the properties and on-sell the properties subject to the new long term leases. [Decision number 200510087.] … and promptly sells the Dargaville property to Multiplex…Multiplex Funds Management Limited as custodian of the Multiplex Albert Street Landowning Trust of Australia, has approval to acquire 1.2 hectares at 1-12 Gladstone Street, Dargaville, Northland for $5,895,465 from General Distributors Limited, owned by Foodland Associated Limited of Australia.
As was seen in the previous item, this was one of ten properties leased by General Distributors (a Progressive Enterprises Ltd subsidiary – see above), which it bought back in order to change the conditions of the leases and then resell. It sold this at a higher price than it bought it for, and in the next item, leased it back, presumably on better terms.
For Multiplex, according to the OIC, the acquisition “is part of the Applicant’s aim of building a fully integrated and diversified property presence in New Zealand.” [Decision number 200510089.] … in order to lease it backGeneral Distributors Limited, owned by Foodland Associated Limited of Australia, has approval to acquire 1.2 hectares of leasehold at 1-12 Gladstone Street, Dargaville, Northland for $5,276,065 from Multiplex Funds Management Limited as custodian of the Multiplex Albert Street Landowning Trust of Australia.
See the previous items. Progressive Enterprises, of which General Distributors’ is a subsidiary, now has leased its property back, paying less for the lease than it received from Multiplex when it sold the property to it. Doubtless, both have made on the deal, probably at a cost to the taxpayer.
The OIC tells us
The proposal is likely to result in the following benefits:
Increased efficiencies to the supermarket business of General Distributors Limited resulting from the better utilisation of capital which is likely to result in ongoing competitiveness and growth and expansion of supermarkets which is ultimately of benefit to consumers.
Yeah, right.
[Decision number 200510091.] Fletcher Residential buys Seven Oaks, Auckland housing developmentFletcher Residential Limited has approval to acquire 2.4 hectares at Jeffs Road, Flat Bush, Auckland for $10,528,000 from Parkview Estates Limited owned by Joseph Kenji Noma and Yoke Nooi Cheong of Aotearoa.
The OIC states:
The Applicant proposes to acquire the subject property comprising approximately 56 residential lots which are part of a subdivision known as the Seven Oaks Development being carried out by the vendor. The vendor is completing the necessary infrastructure for the residential subdivision.
The acquisition will enable the Applicant to further develop its residential building business in the south-eastern Auckland region. The Applicant concentrates its business on residential housing development rather than residential land subdivision.
Fletcher Residential is owned · 29.4% – Australia · 12.3% – U.S.A. · 6.7% – U.K. · 3.82% – “Unknown Overseas Persons” · 47.78% – Aotearoa [Decision number 200510080.] AMP buys land in Nelson for bulk retail development …AMP NZ Property Retail Limited, owned 91% in Australia and 9% in Aotearoa, has approval to acquire 9 hectares at 99 Quarantine Road, Nelson for $20,000,000 by taking over Nelson Homebase Limited.
The OIC states:
The Applicant is the retail acquisition vehicle of the AMP NZ Property Fund, a diversified property fund investing in commercial office, industrial, retail and hotel development properties in New Zealand and is managed by AMP Capital Investors (New Zealand) Limited. The Applicant is proposing to acquire all the shares in Nelson Homebase Limited, a company whose sole asset is the subject land.
The Applicant proposes to undertake a bulk retail development including a bulk retail warehouse of approximately 10,000 square metres to be leased to Mitre 10 (New Zealand) Limited. [Decision number 200510077.] … and in Tauranga for a supermarket developmentAMP NZ Property Developments Limited, owned 91% in Australia and 9% in Aotearoa, has approval to acquire a one half share of 8 hectares at 19 Bethlehem Road, Tauranga, Bay of Plenty for $13,821,750 from F H Thompson and Sons Limited owned by Max Grayling Thompson and Janet Patricia Thompson of Aotearoa.
The OIC states:
The Applicant is the development vehicle of the AMP NZ Property Fund, a diversified property fund investing in commercial office, industrial, retail and hotel development properties in New Zealand and is managed by AMP Henderson Global Investors (New Zealand) Limited.
The Applicant is proposing to acquire a half share in the land, and enter into a joint venture arrangement with the vendor, to undertake a retail development on that part of the land that is currently vacant. The applicant advises that the land is likely to be developed along similar lines to the AMP Property Fund’s existing retail developments at Manukau Supa Centre and Northwood Supa Centre. Construction of the shopping centre is likely to commence in 2006. [Decision number 200510083.] Centro buys remains of Barrington Mall, Christchurch…CPT Manager Limited as trustee for the Centro Barrington Sub Trust of Australia, has approval to acquire 0.4 hectares at 256 Barrington Street, Spreydon, Christchurch, Canterbury for $7,000,000 from Barrington Warehouse Holdings Limited, owned 97.5% in Aotearoa and 2.5% in Hong Kong.
The land is the remaining part of Barrington Mall that it does not already own, and is used by a Warehouse big box.
The OIC states:
On 29 October 2004, Centro Properties Limited (Centro) received consent to acquire the bulk of the property known as the Barrington Shopping Centre. The acquisition was completed on 1 November 2004 by CPT Manager Limited as trustee for the Centro Barrington Sub Trust.
The Applicant proposes to acquire the remaining unit in the Barrington Shopping Centre, subject to the tenancy to The Warehouse Limited, to further enhance the previous investment.
The Applicant is a wholly owned subsidiary of Centro, an Australian Stock Exchange listed company, which is in the business of purchasing, actively managing, and adding value to properties for syndication to investors. Centro is the largest property syndicator in Australia, managing 29 syndicate portfolios valued at over $2.1 billion with an extensive portfolio of 127 retail shopping centres located across Australia, the United States of America and New Zealand. In New Zealand, Centro manages the Kelston Shopping Centre in Auckland and the Porirua MegaCentre in Wellington.
See our commentary for October 2004 for further details of the original purchase. [Decision number 200510086.] … and sells the entire Barrington Mall on to a funds management subsidiaryCentro NZ Shopping Centre Fund Limited of Australia has approval to acquire 2.5 hectares at 256 Barrington Street, Spreydon, Christchurch, Canterbury for $24,606,763 from CPT Manager Limited as trustee for the Centro Barrington Sub Trust of Australia.
According to the OIC,
CPT Manager Limited is part of the Centro Properties Group (Centro Group). The Centro Group is an Australian Stock Exchange listed retail property investment and services organisation that comprises Centro Properties Limited, and a trust Centro Trust. CPT Manager Limited is the responsible entity for the Centro Trust and a group of Centro property syndicates.
The Centro Group is establishing a funds management business in New Zealand through the establishment of a New Zealand investment vehicle, Centro NZ Shopping Centre Fund Limited (Centro NZ). As part of the establishment of the New Zealand business it is proposed that the Barrington Shopping Centre will be sold to Centro NZ. [Decision number 200510090.] Land for forestry· OCB Forestry Limited, owned by Oliver Liam O’Callaghan-Brown and Kathy Emma O’Callaghan-Brown of the U.K., has approval to acquire 39 hectares at Tawhero Forest Estate, Waitawhiti Road, Masterton, Wairarapa for $289,200 from DSM Land Limited of Aotearoa. According to the OIC, “The Applicant proposes to acquire a forestry block growing pinus radiata which is part of a larger forestry block comprising 1,063 hectares being sub-divided by the vendor. To date 340 hectares has been developed in forestry. The vendor will continue to manage the block under a management agreement and the Applicant will provide capital to fund the on-going development of the forestry block. In essence the proposal is a joint venture between the Applicant (who is providing capital for development purposes) and the vendor which is a New Zealand company (which has been engaged by the Applicant to provide the expertise necessary to manage the operation). The sale of the subject land will enable the vendor to continue the planting and development of a further 723 hectares.” [Decision number 200510078.] Vineyard lifestyle subdivision at McArthur Ridge, AlexandraTwo decisions relate to an earlier purchase of land near Alexandra, Central Otago. A developer is creating a vineyard which is being sold off in lots to investors, of which these decisions are two examples. The lots will include both vines, to be managed by a company (probably McCashin Wines) contracted by the developer, and provision for houses. It is both a viticultural and “lifestyle” development.
However what is exceptional is that the original purchase was approved by the OIC in March 2005 but its details were almost entirely suppressed. CAFCA appealed the suppression, and received the OIC’s continued refusal to release the information three days after the decisions described here were made. Yet these decisions give considerably more information about the March decision than the OIC would release.
The story appears to be that a company, Central Otago Pinot Noir Estates Limited (COPNEL) has bought 818 hectares at McArthur Ridge, Alexandra with the intention of dividing them into over 60 allotments containing vineyards and room for a house. In the March 2005 OIC decision, another company, Remarkable Estates Limited (probably related to COPNEL, but with existing or prospective overseas ownership), was given approval to acquire 477 of those hectares. It is not clear whether it actually acquired the land, but it appears to have paid for it, to give COPNEL money to continue the development. It will divide its part of the land into up to 50 allotments for resale, some of which are being sold to the applicants (Stirling McArthur Ltd, and Gerald Taggart) in the present decisions. Remarkable will have the right (“profit a prendre”) to harvest the grapes from the various allotments and purchase any allotments not sold. It can also take over the management of the development.
In the present two decisions:
· Stirling McArthur Limited, owned by Matthew Spence and Dennis Riddick of the U.K., has approval to acquire 42 hectares at McArthur Ridge, Springvale Road, Alexandra, Otago for $2,942,018 [Decision number 200510081]; and · Gerald Paul Taggart of the U.K. has approval to acquire 12 hectares at McArthur Ridge, Springvale Road, Alexandra, Otago for $676,578 [Decision number 200510082].
In both cases they are purchasing the land from Central Otago Pinot Noir Estates Limited which is owned as follows, all being from Aotearoa:
· 40.9% – Peter John Cordner · 15.9% – Russell Checketts · 9.1% – Michael Joseph Daly · 8.2% – The Terraces Trustee Company Limited as trustee for Robin Schulz and Dennis White · 6.8% – Robert Thayer and Janice Thayer, and James Kirkland · 4.3092% – Graeme McVicar · 4.1% – Paul Anthony Tapper and Annette Christine Tapper · 2.6% – Brian Wilfred Gorrie and June Margaret Gorrie · 2.4908% – Roy Denton · 1.4% – Nigel Kenneth Milne · 1.4% – Robert Pitcaithy and Lynette Pitcaithy · 1.4% – John Cecil Davidson · 1.4% – Jack Phillip Goldsmith.
In both cases, the OIC states the following, much of which is difficult to follow either because it has mistakes, or because of the suppression of its earlier decision (referred to by the OIC by the Application number A200510013). For example, in each of these decisions, the OIC states “The land to be acquired by the Applicant comprises these 50 allotments”. Yet in one case there appears to be only five allotments and in the other, only one. Does anyone at the OIC read these decisions?
Other than minor differences shown in square brackets for the respective decisions, the only difference between the statements in the two decisions is that in the second decision the company confesses the sentence we have put in italics.
The Applicant proposes to acquire [5 lots located (sic) which are] [a lot which is] part of the McArthur Ridge development. Remarkable Estates Limited (Remarkable) has received consent to acquire 476.9025 hectares of land located at McArthur Ridge, Alexandra (Refer A200510013) from Central Otago Pinot Noir Estates Limited (COPNEL). COPNEL has commenced the development of a Pinot Noir vineyard, on an 817.694 hectare property, with the intention of selling the land and vineyard following a subdivision of the land into at least 60 allotments, in three stages, ranging in area from 4 to 19 hectares on which individual dwellings can be constructed. The sale of the land to Remarkable and the Applicant will fund the set up and development costs incurred by COPNEL and provide the certainty required to enable the completion of the proposed development.
The land which Remarkable proposes to acquire will be subdivided into up to 50 allotments which will be marketed to and sold to third parties, some of which may be overseas persons. The land to be acquired by the Applicant comprises these 50 allotments. Part of the land is or will be established in grape vines.
Pursuant to the Agreement with COPNEL, Remarkable also proposes to purchase the vines and the vineyard assets and infrastructure. The sale of the allotments to third parties will be subject to a profit a prendre in favour of Remarkable allowing Remarkable to harvest the grapes on the allotments, purchase the remaining lots not sold to subsequent purchasers, purchase a share in the infrastructure allotments held together with the owners of COPNEL’s allotments, and take over the management responsibilities of the development via purchase of shares in the management company. It is likely that one allotment will be retained by Remarkable. A memorandum of encumbrance (and/or land covenant) will be registered against the allotments, the provisions of which are designed to ensure that the character of the development as a premium lifestyle development will be maintained.
COPNEL has entered into an agreement with McCashin Wines Limited (McCashin) pursuant to which McCashin has been contracted to manage the vineyard and to purchase the grapes from the vineyard. McCashin, or alternative entity approved by COPNEL and Remarkable, will produce wine from the grapes and market and sell the wine locally and overseas using the McCashin, or alternative entity approved by COPNEL, Remarkable, and McArthur Ridge brands. Land for wine· Allied Domecq Wines (NZ) Limited, owned by Allied Domecq Plc of the U.K., has approval to acquire 8 hectares at 466 Raupara Road, Blenheim, Marlborough for $1,012,500 from Robin Stanley George Blick of Aotearoa. The OIC states: “The Applicant is the largest participant in the New Zealand domestic wine business and future growth opportunities are limited. The Applicant has identified the acquisition of further vineyards or land for development for the growing of grapes as a way of being able to compete more effectively in the national and international wine markets. The proposed purchase will provide the Applicant with an increased grape supply which will enable it to continue to develop its export wine markets and enhance the reputation of New Zealand wine overseas. The ongoing development is likely to result in the introduction of development capital, increase in employment, processing of grapes and export volumes. The land is currently utilised by the vendor for stock grazing. The Applicant advises that approximately 7.5 hectares will be planted in Sauvignon Blanc and possibly Pinot Gris.” [Decision number 200510088.] Summary statisticsAll investments For the first time this year, the value of net investment approved in the year to this month is higher than for the same period in the previous year (i.e. disregarding sales from one overseas investor to another, and discounting part New Zealand ownership of the assets) but the gross value is considerably lower. By far the greatest part of the value of the approvals is for sale from one overseas investor to another.
Investment involving land Gross sales of land approved by the OIC during the year to June are still less than last year’s gross, though net sales are ahead. Refusals (above) are considerably behind last year, though both are a tiny proportion of the total.
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Compiled by: Campaign Against Foreign Control of Aotearoa, P. O. Box 2258 Christchurch. |
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