Property editor of the NZ Herald

Mana and money - the Maori business evolution

Iwi business interests are expanding from land-based models to embrace a variety of assets and enterprises.
The assets of the top 10 Maori businesses are closing in on $5 billion. Photo / Michael Cunningham
The assets of the top 10 Maori businesses are closing in on $5 billion. Photo / Michael Cunningham

The assets of the top 10 Maori businesses are closing in on $5 billion as they develop from property and primary industries-related Treaty settlements into wider interests including, food and tourism, but one expert says the important issue is how much money they are generating to help the needs of the people.

As part of the Deloitte Top 200, the Maori businesses have been ranked by total assets and control a powerful asset base of $4.85 billion, from forestry to fishing, commercial land development, housing, tourism, food production and corporate investment.

But Leon Wijohn, a Deloitte private partner and the firm's national Maori business sector leader, says the true gauge of Aotearoa's powerhouse Maori economy is operating income.

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"The size of the assets is amazing but what's important is moving away from comparisons based on assets and moving more towards ebitda (earnings before interest, tax, depreciation and amortisation) because that's an indication of how much free cash there is to look at addressing some of the needs of the people."

Previously, Deloitte only had nine businesses on its list. A newcomer on the list is Parininihi ki Waitotara, a Taranaki Maori incorporation owning 20,000ha of dairy land and other interests including crayfish, forestry and commercial property.

It has about 9000 shareholders, the majority being descendants of Taranaki Maori whose lands were confiscated in 1865.

Nelson-headquartered Wakatu Inc has vanished from the latest list, even though it declares assets of more than $260 million and its associate, Kono NZ LP, is a big food and beverage producer and exports wine, seafood, fruit and natural fruit bars.

Some Maori businesses are understood not to want to be on the list, preferring a lower profile.

Leon Wijohn. Photo / Doug Sherring
Leon Wijohn. Photo / Doug Sherring

The biggest entity by far is the South Island's trail-blazing Ngai Tahu with $1.2 billion of assets, producing a healthy $353 million of annual revenue, followed by Waikato Tainui with $1.1 billion of assets yielding $92.8 million of revenue, then Auckland's fast-growing Ngati Whatua ki Orakei with $631 million of assets making $41 million of annual revenue.

Those three are taking new directions too.

Ngai Tahu is developing new housing estates around Christchurch including Wigram Skies, Prestons and Te Whariki. Tainui put part of its major Hamilton shopping centre, The Base,

on the block late last year and Ngati Whatua will this month complete the first of its 30 revolutionary Stevens Lawson designed new affordable housing units alongside the Papakainga at Takaparawha or Bastion Point in Auckland's Orakei, as well as planning other major developments around Bayswater, Hauraki Corner and Belmont.

Wijohn sees a clear evolutionary path for big Maori businesses as they grow, gradually moving away from their historic property or real estate interests into two related but clearly distinct sectors.

The size of the assets is amazing but what's important is moving away from comparisons based on assets and moving more towards ebitda.
Leon Wijohn

"Initially, they're all around property and the primary sectors - fishing, farming, forestry and land. That's a factor of Treaty settlements - the assets they can acquire back as part of the settlement process," Wijohn said.

"They then start diversifying and looking at what parts of the value chain they can invest in and tourism and food are two areas and an extension of the existing assets. If you have land, you're looking at the potential uses so often they end up in these businesses."

Examples include Waikato Tainui pushing into the hotel sector with partial ownership of the Hotel Novotel Auckland Airport.

Ngai Tahu is well advanced on the tourism front, owning award-winning Whale Watch Kaikoura, the Shotover Jet attraction near Queenstown, Glacier Hot Pools at Franz Josef, guided walks and eco tourism ventures, while Ngai Tahu Seafood exports include blue cod, paua and lobster, sent to Australia, Asia, the US and Europe.

Last year, Wijohn noted Tainui's move into the corporate sector: "Although Tainui will always have a property focus, moving into business investments is intended to diversify their investment portfolio more over time with the hope of increasing jobs and cash flow."

Diversification into new sectors may be more challenging for Ngati Whatua Whai Rawa "with no big commercial farms in Auckland" but that business has big cashflow from occupants of its Quay Park land holdings, including Vector Arena, the three Scene apartment blocks and the Countdown supermarket and rent from the Aecom House office block at 8 Mahuhu Cres, which it bought two years ago for $67 million.

Tuhoe Te Uru Taumatua, with assets of $254 million, is another newcomer to the latest list.

For Wijohn, evolution also focuses on the need for good governance.

"That's the major issue that emerging Maori organisations need to tackle - having plans to improve their own governorship, having an organisational plan and putting in place the right people, policies and procedures."

Take wider view of size of economy, says Hayes

Selwyn Hayes. Photo / Christine Cornege
Selwyn Hayes. Photo / Christine Cornege

EY Tahi's Selwyn Hayes encourages taking a wider view of the size of the Maori economy.

Most media focus is on the tribal and Maori land collectives, but if you look at the analysis by economic consultant Berl, he says, the largest chunk of the $42 billion asset base lies with other organisations/employers, not the Maori collective sector.

"So following that logic, and if you're looking at growth of the Maori economy and where the most impactful prospects lie, then I would argue you're more looking at levers - potentially Government supported - for entrepreneurial and general business enterprise," Hayes says, citing more tech and entrepreneurial hubs, most of which aren't Maori specific, "like ColabNZ which is coincidently owned by a Maori, Robett Hollis".

"But also in the Maori creative industries space, collaborations of Maori film producers in Rotorua like Steambox, and what Cliff Curtis could be cooking up," he says.

"If you take the narrower view of Maori collectives then you're into leveraging off the [mainly] farming, fishing, forestry starting base into spaces like export, [such as] more Miraka type joint ventures, into other agri-plays like Miere/honey and commercial property and related industries, for example Ngai Tahu Property setting up office in Auckland."

- NZ Herald

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