New Zealand's richest man Graeme Hart has a three-pronged expansion strategy: buying a string of Auckland residential properties, developing industrial warehouse centres and furthering his food investments.
Companies Office records show 24 new Hart businesses have been registered since 2019, giving a clear indication of the directions in which the billionaire is heading.
Rank Group, owned by Hart, is rapidly adding to its Auckland property portfolio, lately buying another 12 mainly residential properties.
Rank is an international business with major positions in packaging, consumer goods and building supplies.
It owns Carter Holt Harvey and national retail chain Carters; Reynolds Consumer Products, which sells things such as aluminium foil and rubbish bags to US consumers; US food and drink packaging company Pactiv Evergreen; and plastic container maker Graham Packaging, also based in the US.
Carter Holt and Carters are coming under the Commerce Commission's gaze as it carries out its probe into competition in the market for building supplies, with a report due out soon. There has been speculation that Hart may be having another look at carving off Carter Holt with an initial public offer and dual listing on the New Zealand and Australian sharemarkets, though nothing has been announced.
Rank paid $3.31 billion for Carter Holt in 2006. Since then Hart has sold the company's forestry and farm land and its pulp and paper unit, leaving a smaller business focused on wood products and building supplies.
He followed that purchase with a series of huge deals to build a packaging empire that now sits under the Pactiv Evergreen umbrella.
Latest full accounts show that for the year to December 31, 2021 Pactiv Evergreen had net revenue of US$5.4b, up from the previous year's US$4.7b.
Under the heading "Positioning for future growth", the company said it was focusing on executing strategic priorities, including:
• An acquisition of Fabri-Kai, a leading manufacturer of foodservice and consumer brand packaging
• The divestment of a 50 per cent stake in Naturepak Beverage Packaging, which supplies customers in the Middle East and Africa
• The divestment of a coated paper business
• The divestment of a carton packaging and filling machinery businesses in China, Korea and Taiwan to SIG Combibloc Group (which Rank once owned), for US$335 million
• Acquiring a non-participating group annuity contract with an insurance company to transfer approximately US$1.26b of pension plan gross liabilities
NZ Property play
Hart's corporate activities in this country - which encompass only about 10 per cent of his business - show his strategy is evolving.
Recent moves include:
• Buying mainly rundown Auckland residential properties in less valuable areas via the 12 new companies. This is apparently a scatter-gun approach throughout Mt Wellington, Glen Innes, Point England, East Tāmaki, Panmure, Penrose and Ellerslie. While they aren't blue-ribbon suburbs, it is worth noting that more wide-scale apartment schemes could soon be allowed under the Labour/National Auckland housing intensification deal.
• Buying and developing South Auckland industrial land. These new buildings will be in extremely high demand from occupants involved in freight, postage, online shopping and goods storage and delivery. Experts say Hart could be booking development margins of up to 20 per cent for each new warehouse his companies develop, as well as striking long-term leases of eight to 10 years. He's well-advanced on the new builds, and agents are already seeking tenants.
• Expanding the food manufacturing and distribution business Hart owns with son Harry under the Walter & Wild label, following last year's purchase of icecream maker Emerald Foods Group.
Property, goods storage and food are the key expansion areas for Hart's businesses locally.
Any new activity is of high interest, given Hart's proven ability to succeed. His wealth was most recently estimated by NBR at $12b. The multi-billionaire stays away from high-risk areas and is drawn to more conservative ventures where he can add value.
His strategy appears to be all about where we live, where we store our goods and the foods we eat.
The Auckland residential land purchases are a new phase that will play out in time.
Often, his sites are large, around quarter of an acre to use the old measurement, so development would seem to be his longer-term plan.
But Hart's moves on that front are mysterious and baffle even the property experts who say that buying a bunch of adjoining Auckland residential properties might make sense for apartments - but all over the place?
The Herald reported last year on some of those Auckland purchases.
It all sounds simple enough but observers say Hart's ability to pick winners is what sets him apart and that is why his activities are of such high interest.
Hart said via a third party last year that information from agents and property records would give a "fulsome picture" of his companies' property interests.
He gave a rare interview to Stuff last month, saying he was a "terrible" student who was encouraged to leave school as soon as he turned 15. The Mt Roskill Grammar student was taken aside by a career guidance counsellor who suggested he might like to go.
But once he found what he loved, there was no stopping him. Business and commerce are his passions.
He was among this year's laureates of the NZ Business Hall of Fame, with Bruce McLaren, Charles and Jessie Begg, Greg Tomlinson, Les, Jackie and Phillip Mills, Pania Tyson-Nathan and Ulu Aiono.
Hart's Rank Group has registered 12 new real estate entities in the past three years, all wholly owned by the group. Those 12 new companies are each named after the addresses of properties they have bought.
All 12 have registered offices at Hart's Rank Group, level 9, 148 Quay St, Auckland. And all 12 list the ultimate holding company as Rank Group, where Hart is the 100 per cent shareholder.
The registrations give an idea of how the publicity-shy Hart is doing business, where he sees opportunities and the sorts of projects he is interested in.
What we looked for
The search for the newly-registered Rank Group-owned companies was conducted using "Rank Group" in the keyword search and specifying dates from 2019 until June 15 this year.
That revealed 24 results, illustrating that 24 new companies have been formed since 2019 which have registered offices at Rank Group. Rank is the ultimate shareholder in all except one company which has family links and whose registered offices is also the same as Rank's. More on that at the end.
Some of those 24 companies have already been cited in publicity in the last year about Hart's property buying activities.
One Hart-watcher said his industrial land purchases were possibly due to "lockdown boredom" and him not being able to leave New Zealand as easily as he is used to doing.
Auckland residential real estate
Companies Office records show the 12 new companies which have bought Auckland residential properties.
Last year when we last looked, it was nine properties.
The 12 businesses registered most recently are:
1. 54 Kawiti Ave Ltd
Incorporated March 31, 2022
Ultimate holding company: Rank Group
Property: 678sq m residential land, Point England
2. 47 Elstree Ave Ltd
Incorporated November 18, 2021
Ultimate holding company: Rank Group
Property: 870sq m residential land, Glen Innes
3. 21 Hillside Road Ltd
Incorporated November 18, 2021
Ultimate holding company: Rank Group
Property: 1012sq m residential land, Mount Wellington
4. 131 Barrack Road Ltd
Incorporated November 18, 2021
Ultimate holding company: Rank Group
Property: 1176sq m residential, Mount Wellington
5. 332 Panama Road Ltd
Incorporated November 18, 2021
Ultimate holding company: Rank Group
Property: 675sq m, residential, Mount Wellington
6. 3 Stewart Avenue Ltd
Incorporated August 10, 2021
Ultimate holding company: Rank Group
Property: 1454sq m residential, Panmure
7. 17 Gavin Street Ltd
Incorporated August 10, 2021
Ultimate holding company: Rank Group
Property: 1353sq m residential, Ellerslie
8. 12 Mataroa Road Ltd
Incorporated August 10, 2021
Ultimate holding company: Rank Group
Property: 1330sq m residential, Mount Wellington
9. 5 Mataroa Road Ltd
Incorporated August 10, 2021
Ultimate holding company: Rank Group
Property: 693sq m, residential, Mount Wellington
10. 233 Penrose Road Ltd
Incorporated August 10, 2021
Ultimate holding company: Rank Group
Property: 824sq m residential, Mount Wellington
11. Cebalo Place Ltd
Incorporated August 10, 2021
Property: 953sq m residential, Mount Wellington
Ultimate holding company: Rank Group
12. 1 Accent Drive Ltd
Incorporated February 18, 2021
Ultimate holding company: Rank Group
Property: industrial, East Tamaki
Asked to comment on those 12 sites' potential, the Real Estate Institute noted that New Zealand was experiencing record residential development and construction, despite pressures and material shortages.
"As the country continues to grow, we will need more homes and the Government is actively enabling development through initiatives such as density changes within the national policy statement on urban development allowing more development without the need for resource consent.
"These changes would make development more attractive as a business and investment opportunity. Over time, we have seen a wide variety of people and businesses get involved in this vibrant and important industry," said REINZ.
Hart's industrial/warehouse development business
Seven of the 24 companies use the name Fernbrook. Those companies partly specialise in buying industrial land in South Auckland, particularly around Auckland Airport, and building vast new warehouses there.
Last year the Herald reported on Hart buying South Auckland industrial properties in five deals worth $189m.
That was:
• A 28ha block of land at 31 Prices Rd off Puhinui Rd in the Manukau/Wiri area for $94m
• A block of 3.8ha of undeveloped land at 9 Jerry Green St off Roscommon Rd, East Tamaki
•68 Cryers Rd, East Tamaki, developed land in the hub of a commercially highly active zone
•11 Greenmount Dr, East Tamaki, for $18.2m in a deal brokered by agents including from JLL
•90 Pavilion Dr, Māngere, on the edge of the Villa Maria Estate, itself about to become a $500m industrial office park.
Alistair White, managing director and founder of Auckland planning and resource management consultancy Planning Focus, has been involved in many Hart deals, insiders said. White lists Rank as one of his clients.
Latest Rank-owned companies registered in this area are:
• 1. Fernbrook Property (No.1) Ltd
Incorporated February 18, 2021
Ultimate holding company: Rank Group
• 2. Fernbrook Property (No.3) Ltd
Incorporated March 23, 2021
Ultimate holding company: Rank Group
•3. Fernbrook Property (No.4) Ltd
Incorporated March 23, 2021
Ultimate holding company: Rank Group
•4. Fernbrook Property (No.6) Ltd
Incorporated March 29, 2021
Ultimate holding company: Rank Group
•5. Fernbrook Residential Services Ltd
Incorporated March 29, 2021
Ultimate holding company: Rank Group
•6. Fernbrook WW Ltd
Incorporated October 20, 2020
Ultimate holding company: Rank Group
•7. Fernbrook Property Ltd
Incorporated October 9, 2020
Ultimate holding company: Rank Group
Graeme and Harry Harts' expanding food business
More new companies are linked to Hart's expanding food empire with his son Harry. The food business goes under the name Walter & Wild and its brands are Alfa One, Aunt Betty's, Hansells All Natural, Hubbards, I Love, F. Whitlock & Sons, Hansells Chef's Kitchen, Aunty's and Vitafresh. The business has Australian, British and New Zealand operations.
Last year the Harts bought ice cream company Emerald Foods Group, returning it to Kiwi ownership. As a result, some of the new businesses are registered as EFL (Emerald Foods Ltd). One has "ice cream" in its name and Emerald's "natural" branding is used in another company's name.
Further new businesses registered lately are:
•1. New Zealand Natural International Ltd
Incorporated April 14, 2021
Ultimate holding company: Walter & Wild Holdings
•2. New Zealand Natural Ice Cream Ltd
Incorporated April 7, 2021
Ultimate holding company: Walter & Wild Holdings
•3. EFL Acquisition Ltd
Incorporated April 7, 2021
Ultimate holding company: Walter & Wild Holdings
•4. EFL Holdings Ltd
Incorporated April 7, 2021
Ultimate holding company: Walter & Wild Holdings
A company registered in 2019 has family ties and is not apparently linked to the food or property activities. It is:
HML 1 Ltd
Incorporated November 1, 2019
Address for service is The D & G Hawkesby Trust, at Rank's headquarters.
Hart's son-in-law Duncan John Hawkesby is a director.
