Concern as foreign multi-national makes housing shortlist

7:14 am on 18 March 2016

A community housing group is worried an overseas consortium has made the shortlist of providers bidding to take on 1500 state houses.

State house in Titahi Bay, Wellington.

Photo: RNZ / Alexander Robertson

The government is selling 1124 homes in Tauranga and 348 in Invercargill.

It is a pilot scheme to see whether it could work elsewhere in the country.

A British and multi-national consortium was among the four shortlisted bidders announced yesterday - but the government said they would have to be good landlords, not just the cheapest provider, to be successful.

The pending sale of state houses in Tauranga and Invercargill is the biggest step yet in the government's reform of social housing.

Only one provider - South Island-based Pact Group - was selected to bid for the Invercargill contract, while three groups were invited to bid for the Tauranga houses.

Director of Community Housing Aotearoa Scott Figenshow said he was thrilled that three of the four groups included New Zealand not-for-profit organisations.

"We always thought that might be the kind of consortium that would emerge, that activates existing capacity in New Zealand, builds upon it, and can deliver the great outcomes that we've all been expecting to come from these reforms."

He was less excited by the inclusion of the local-sounding but very much international Hapori Connect Tauranga which is made up of three international firms.

The John Laing Infrastructure Fund is listed on the London Stock Exchange and has international investments.

Pinnacle Community Housing is a British-owned firm that says on its website it is looking at exciting opportunities in social housing in New Zealand and Brookfrields Global Integrated Solutions is a property management company with an Australian base

"Investment funds, their purpose for being is to deliver a return to shareholders - and good on them for that," Mr Figenshow said.

But he doubted the group's ability to improve the quality of the current state housing stock while also still delivering that dividend .

Accessible Properties general manager Andrew Wilson, whose company was one of two local providers competing for the Tauranga houses, said a New Zealand-based provider would have distinct advantages.

"As a bidder, we've got a huge amount of knowledge of the New Zealand environment, the social housing environment, the building and regulatory environment, and experience in terms of managing tenants in New Zealand."

Minister responsible for Housing New Zealand Bill English said the international group would still have to meet rigourous criteria, regardless of whether its motive was to make a profit.

"We'll get bids in which will enable a comparison of the quality of management - both of tenant management and of property management - and they'll be important considerations, and price will be another consideration."

He could not rule out the possibility that the Tauranga contract could be split between more than one group.

Conversely, Minister for Social Housing Paula Bennett said the one Invercargill bidder would not necessarily be successful.

"At the end of the day we don't have to sell. They now get to put their best foot forward and their best offer forward."

The proposals were due by early June, with the successful bidder for each region expected to be announced by October.