Another major player in the Government's bid to sell off its state houses in Tauranga and Invercargill has dropped out.

Wairarapa-based Trust House has pulled out of a consortium that was bidding to buy and manage Tauranga's 1124 state houses. Trust House, which owned and managed about 480 houses in the Wairarapa, was part of the Kainga Community Housing consortium - one of three bidders for Housing New Zealand's Tauranga properties.

A spokeswoman for another of the partners in the Kainga consortium, Victoria Kingi of Papamoa's Nga Potiki a Tamapahore Trust, said Kainga was continuing with its bid. She could not give any other details.

The departure of Trust House followed the withdrawal of the only potential bidder for the 348 Invercargill state houses, the Dunedin-based Pact Group. Pact was gagged from speaking openly about the Invercargill sell-off because it signed a confidentiality agreement with the Government that limited what it could say.


Trust House had planned to provide tenancy management services for the Kainga group which also included Te Puke's Tapuika Iwi Authority Trust, not-for-profit Australian housing provider Compass Housing, Australian infrastructure asset manager HRL Morrison, and Programmed FM, a facilities management company that operated on both sides of the Tasman.

Another of the three bidders for Tauranga's state houses, IHC-owned Accessible Properties chaired by Tauranga property developer Paul Adams, last week strengthened its case when Tauranga's Maori tribes united behind the bid.

Part of the justification for the iwi partnership's support was that 60 per cent of Housing New Zealand's tenants in Tauranga were Maori. Ngati Ranginui iwi chairman Tawharangi Nuku said it was essential that iwi played a part by putting in place links between tenants and their iwi and hapu. It also offered opportunities for iwi to invest in social housing.

Trust House chief executive Allan Pollard told the Wairarapa Times Age that the deal was simply too risky for the community-owned company to go ahead with.

"It was better for us to stand aside and let the big boys from overseas fight it out."

The third bidder for Tauranga's state houses was Hapori Connect Tauranga, a consortium made up of British-owned Pinnacle Community Housing, Canadian real estate management company Brookfields Global Integrated Solutions and the John Laing Infrastructure Fund, listed on the London Stock Exchange.

Mr Pollard said the potential risk of losing money was too big. "There was a risk of loss of community money through the bidding process, and I didn't think it was worth the risk."