20 Oct 2021

Super Fund commits $300m to drive Warkworth property development project

2:48 pm on 20 October 2021

The New Zealand Super Fund has joined forces with a local property developer to help tackle the country's housing shortage and free up land.

Wood Home Framing Abstract At Construction Site.

The Warkworth project aims to deliver 500 lots as part of the development. Photo: 123RF, Andy Dean Photography

The new partnership between the Fund and Tauranga-based Classic Group, named Kaha Ake, aims to develop land across the country so that it is suitable for housing.

The Super Fund had committed $300 million to the partnership's first development in Warkworth, north of Auckland, which planned to deliver 500 lots as part of a new community development.

Classic Group director Peter Cooney said it would be about two years until ground was broken on the project, but the site would feature a range of properties that catered to the needs of different types of buyers.

He said the new joint venture was an exciting opportunity because the shortages of suitable land had held back new builds.

"It goes back to 2007 where everyone thought the world had ended and everyone put their heads in the sand and nothing was done, and the council's weren't looking 30, 40, or 50 years out.

"When the market came back, it came back with such a rush, with such velocity, that within five to six years all the current land got choked up."

He said the availability of land was a challenge right throughout the country, as was the laborious resource consent process and the costly infrastructure needs for different blocks of land.

"That's where we come along...we're in a position that we can probably help solve those infrastructure issues by collaborating with the councils, finding solutions to bring that infrastructure forward.

"That's one of the major delays in a lot of the regions at the moment."

Cooney said that Kaha Ake currently had no further plans beyond the Warkworth project.

"We are actively on the market looking for projects but we would like to think that we could deliver anything up to 1000 [lots] per year, possible more."

NZ Super Fund manager of direct investments Hishaam Mizra said the investment was part of a strategy to increase its presence in real estate.

"We believe our capital can help create a break-through moment for a sector weighed down with interconnected challenges of affordability, land supply, lack of scale, poor infrastructure and compliance."

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