NZ Super wants in on city housing

New Zealand Superannuation Fund chief executive Adrian Orr told TV One's Q+A programme today that 'we're actively looking' at investing in large-scale housing developments in Auckland. Photo / Doug Sherring, Herald on Sunday

The New Zealand Superannuation Fund is sniffing around Auckland's red-hot housing market for investment opportunities.

Chief executive Adrian Orr told Television New Zealand's Q&A programme yesterday that the fund was actively looking at large-scale housing developments in the city.

Mr Orr did not name any projects, but indicated the fund would prefer investments of more than $100 million.

He said it was hard to get capital invested and access to land, but the fund was working hard with very strong and trusted partners.

"I hope in the next couple of years the public will see some of the outcomes from that," Mr Orr said.

One possible project was the redevelopment of 2800 state houses worth $1.2 billion in Tamaki, a joint project between the Government and Auckland Council.

The project has a $200 million government loan to speed up new housing development, but is seeking other development partners.

A spokeswoman for the fund said it had been in discussions with various groups, Auckland Council and iwi looking at a range of possible opportunities.

David Rankin, chief executive of the council's property arm, said the Super Fund was a logical match for long-term investment in the Auckland housing market.

Unlike cities in other countries, he said, Auckland lacked institutional investment in longer-term rental properties for stable returns, not short-term capital gain.

Mr Rankin said the Super Fund could also benefit Development Auckland, a new council body being set up in September to undertake large-scale developments in conjunction with the private sector.

The Super Fund, currently worth $29.6 billion, is one of the largest institutional investors in New Zealand's capital markets.

Its $4 billion New Zealand portfolio includes about $1 billion in the local sharemarket, as well as large investments in Kaingaroa Timberlands, Z Energy, Metlifecare, Datacom and rural farmland.

Mr Orr said the fund was under no directive from the Government to invest in the Auckland housing market. "That's not possible within our act, which is a fantastic thing that gives the public confidence it's about dollars and cents that we're after."

Rob Hutchison, chief executive of Ngati Whatua's commercial arm, Whai Rawa, said the iwi was involved in several small housing developments, including construction of 30 houses at Bastion Pt.

Ngati Whatua did not need financial partners at this stage, he said, but that might change in future.