Mīharo! Financial assets owned by nine biggest iwi up $1b annually to $10.8b - new report

Te Maharatanga o Ngā Wai (remembering our waters): a project by Ngāti Whātua Ōrākei and Auckland Council. Photo / Bryan Lowe, Auckland Council

The financial wealth of nine of Aotearoa's largest iwi grew by $1 billion in the last year to reach $10.8b, largely due to rising property values.

The asset bases of Ngāi Tahu, Ngāpuhi, Ngāti Awa, Ngāti Pāhauwera, Ngati Porou, Ngāti Whātua Ōrākei, Raukawa, Tūhoe and Waikato-Tainui were assessed in the TDB Advisory iwi investment report, out today.

Unrealised capital gains on property was the main reason for the boosted growth, not operating income improvements, the report said.

Ngāti Whātua Ōrākei did best out of the nine, returning 18.8 per cent annually, attributed to its concentration of assets in the Auckland property market, which has generated high returns over the period. In 1996, the iwi bought 20ha of land at Quay Park for $44m, including the Spark Arena, Countdown supermarket, and Scene One, Two and Three apartment blocks,

The iwi subsequently bought North Shore land where it is building extensive housing and has holdings elsewhere in the city.

Since 2013, Ngāti Whātua Ōrākei has grown from $593m to $1.5b in 2021, an average growth rate of 13 per cent annually. Net worth has increased from $424m to $1.2b over the same period, an average growth rate of 15 per cent annually.

Given the dominance of Auckland properties in the Ngāti Whātua Ōrākei asset portfolio, growth in its assets corresponds to the growth in the Auckland property market, TDB said Asset growth in 2021 of 16 per cent was the highest growth experienced since 2016.

The Herald reported last month how Ngāti Whātua Ōrākei's bottom-line profits were boosted by nearly quarter-of-a-billion-dollar asset growth in the powerhouse real estate asset class where it holds many of its assets.

Accounts for the year to June 30, 2021, showed a $243m net gain from its investment property assets, up on the far more conservative $43m gain the previous year for the tangata whenua of central Tāmaki Makaurau.

TDB said Ngāi Tahu, Ngāti Awa, Ngāti Pāhauwera, Raukawa, Tūhoe and Waikato-Tainui exceeded a 9.4 per cent benchmark.

Ngāpuhi and Ngāti Porou reported the lowest returns, at 7.9 per cent and 9.1 per cent.

Phil Barry, a TDB director, said: "We chose the nine iwi largely based on their size and the timing of their treaty settlement." Ngāpuhi has not yet settled.

The report said: "Iwi have been selected based on the year of treaty settlement, the size of treaty settlement, the number of iwi members and the availability and transparency of financial reports and information disclosures."

Phil Barry of TDB Advisory. Photo / Michael Craig

Matthew Tukaki, National Māori Authority chairman, has said the report only scratched the surface of the true Māori economy, worth far more than $10.8b, because the study only captured iwi which publicly report their annual accounts.

Assets of other iwi, hapū, registered charities and private enterprises would boost that figure considerably if that was captured, Tukaki said.

"The problem, I think with reports like this, is that it's not even a sample size."

In response, Barry said: "We don't try to or claim to capture the Māori economy. Our report is solely focused on the post-settlement iwi entities."

Since 1990, around 90 iwi have finalised treaty settlements with the Crown.

TDB said iwi as investors had several notable characteristics: they tended to have a strong home bias, long time horizons, limited access to new capital and constraints on their ability to sell certain assets. Iwi trusts, as opposed to their commercial arms, typically had social and environmental objectives in addition to their financial objectives.

The nine iwi all make distributions to their members last year. These were primarily education, housing, health, culture, sports and community service grants.

Distributions totalled $87m last year, up from $79m in 2020, TDB found.

During 2021, iwi continued to provide services in response to Covid-19. Many were involved in testing and vaccination efforts, as well as providing essential products and support to those in need, the report noted.

Neil Donnelly, general manager of Ngāti Whātua's property development schemes at Belmont. Photo / Dean Purcell

The iwi with the largest asset base remains Ngāi Tahu whose tourism businesses faced challenges in pandemic with lockdowns and lack of international visitors resulting in a $6.8m net deficit. But that iwi remains committed to tourism industry and added the All Blacks Experience in Auckland to its portfolio lately.

Property dominates, comprising 42 per cent: residential and commercial properties being developed or held for sale and properties held to generate rental income and accumulate capital appreciation.

Ngāi Tahu made distributions of $35m to its members last year. Net assets per member increased to $23,935, the first rise since 2018. Membership numbers grew by 4.9 per cent.

Waikato-Tainui's assets and net worth increased by 7 per cent and 10 per cent respectively. The increase in assets and net worth in 2021 was largely driven by increases in the reported value of assets following a turnaround from the sharp decline in valuations in 2020 largely due to the Covid-19 pandemic.

The iwi's gearing ratio decreased sharply in 2017 when $100m of the $195m generated from the sale of half of its holdings in The Base shopping centre in Hamilton was used to reduce debt. Last year, the gearing ratio fell from 12 per cent to 9 per cent, with total debt declining by $35m to $130.8m, the report said.

But the pandemic hit the group's cash-generating assets like its hotels and The Base. Hotel revenue fell from $19m in 2020 to $16m last year and rental revenue fell from $28m in 2020 to $27m. But the iwi still paid a dividend of $13.3m last year, with $4.8m recognised as an interim dividend and an additional $8.5m approved.