35
waikato-tainui
annual report 2014
TGH has commenced a review of its existing assets to reflect
its revolving strategy. Independent experts were brought in
during the year to review the performance of the portfolio.
Over the 10 years from 2003 to 2013, they found it had
out-performed the NZX 50, the ASX 200, the New Zealand
Property Index and the New Zealand Super Fund. However,
they did identify the need to further improve returns, reduce
concentration risk through diversification, to review the
company’s capital structure and to optimise its debt strategy.
The next steps, in 2015, will be to finalise a target portfolio,
identify the actions needed to achieve it and determine
timeframes. The new portfolio will include both active and
passive participation in equities as well as fixed income
holdings. TGH’s $150 million ground lease portfolio has
already been reclassified in the fixed income category.
Consistent with its skill set and experience in the successful
Huntington subdivision, a new residential development is
underway in Rotokauri. The consenting and development
phase has commenced, and 49 sections will come on stream
in the new financial year.
In April 2014, TGH purchased 5.4 million shares in Genesis
Energy when the Government sold down 49% of its stake
in the company. The holding satisfied TGH’s requirement
for liquidity, and in-depth analysis suggested it was a sound
commercial investment. Waikato-Tainui has a long history
with Genesis as several of the latter’s assets are located
within the rohe, or tribal area. TGH manages the ground
lease on the Huntly power station and the old Meremere
power station site.
For the remainder of the property portfolio the company
will allocate sufficient resources to ensure it performs to
the required standards. What will change is that the level of
additional spend in this segment will remain subdued in the
near term.
Rotokauri residential development, Hamilton.
Geneisis Energy, Huntly.
TGH ANDWTF – PORTFOLIOVALUE BY SECTOR
20%
Fixed Income
(Ground Leases)
7%
Primary Industries
5%
Direct Investments
2%
Cash
Property
66%
