For most of us the mists of time have well rolled over the memory of what The Base site looked like before it became a 29 hectare magnet for our credit cards.
A former airforce base, taken from Waikato-Tainui for defence use before World War II, it would’ve been hard to find a shabbier welcome landmark to the north of Hamilton.
After its return to the tribe in 1995, the site’s subsequent transformation into New Zealand’s largest single-zone retail precinct has had an extraordinary impact on the city, affecting housing migration, household shopping and employment patterns, land valuations and a swag of commercial decisions.
Love it or hate it (plenty loathed the idea of it, all the way to the highest courts, and no doubt still do) The Base was a game-changer for Hamilton.
Recently on the other side of the city, in a Ruakura paddock, another development with the potential for seismic economic impact was ushered in by Waikato-Tainui leaders. They were blessing the ground on which the first foundations of an inland port will be laid, the genesis of a 480 hectare integrated logistics, commercial warehousing and manufacturing juggernaut, 3km from the city centre.
Fulton Hogan is now on site with its earthmoving monsters and within a year, once the earthworks have settled, concrete will be poured. Containers will start arriving in early 2019.
The Waikato-Tainui project has been making headlines for years as it navigated red tape and challenges from local residents, but I’m picking, judging by the blank looks of family and friends when I mention it, that the impact of what’s to come will surprise the socks off many people.
Tainui Group Holdings, Waikato-Tainui’s commercial business, is at pains to say the Ruakura development is a long-term project, but I’m also picking that bar an economic shock, demand for its centrally convenient facilities will spur its growth faster than expected.
TGH chief executive Chris Joblin says the 31 hectare inland port is the “humble beginning” of a 20-30 year development journey, but in the next breath admits being surprised at the scale of warehousing and distribution hubs being suggested by prospective export and import users. They would be setting up in the planned adjoining 60 hectare logistics precinct, and according to Chris, they’re mulling buildings of 30,000-60,000 square metres. Beyond this are proposed precincts for light industry, innovation and retail activities with around 50 hectares of green space. A housing subdivision is planned by a developer in co-operation with TGH. Initial predictions put the economic generation potential of the total development at more than $3 billion. It is tipped to support 6000-12,000 new jobs and will form 10 percent of Hamilton’s rating base and 8 per cent of the city’s land area.
The successful port operator will be announced by TGH in June.
It will be interesting to see if Waikato people, watching all this roll out in coming years, fully realise who was behind it.
That Waikato-Tainui through TGH is an economic powerhouse in this region will be no surprise to some business people, but the extent of its commercial reach is largely unappreciated. As Chris says, think Waikato-Tainui, think The Base – and that’s it.
The figures tell another story.
TGH, on behalf of the tribe, has large investments in hotels, dairying, transport, fishing, farming and forestry. It manages 4500 hectares of farm land for the tribe and in partnership with the South Island’s Ngai Tahu, is a major shareholder in blue chip exporter Waikato Milking Systems and the Go Bus company.
The businesses it owns or is associated with together have operating expenses of $500 million a year and employ around 4000 people. It owns the ground leases for Centre Place, the Huntly power stations, the Wintec city campus and Waikato University.
The tribe’s total assets were $1.2 billion last financial year, $921 million of which was attributable to TGH. Net profit for TGH and Waikato-Tainui Fisheries last year nudged $57 million. Primary industry activities make up 10 percent of TGH’s asset base.
Recently TGH formed a 50:50 joint venture for The Base with investor Kiwi Property, releasing $192.5 million for debt reduction and repayment of $46 million to the tribe for the long-term lease of the land. The tribe’s debt last financial year was 27.2 per of total assets, according to its annual report.
TGH, which employs just 40 people including those on its farms, also has a large share portfolio, including five million shares in Genesis Energy. It recently announced plans to build a second 5-star hotel at Auckland International Airport.
All this has grown from the $170 million received by the tribe in the 1995 land confiscation settlement with the government.
Or, as some detractors would say, from its charitable status, which provides favourable tax treatment. But Chris says it’s not a mistake to call TGH a charity. The money that comes in from its activities goes straight out again to benefit Waikato-Tainui members and the community.
TGH has distributed more than $150 million in the past decade, he says, and through its dividends to the tribe has sent 1000 young people to university.
Ruakura is under way at last but don’t expect TGH’s growth pace to ease off.
Chris says there are more opportunities for long-term infrastructure developments to benefit tribal members where they live, particularly in the Huntly and Meremere areas.
”The port is an infrastructure asset and as an intergenerational investor, we see opportunities growing to invest in this area and in the population we serve. If councils can’t afford to unlock assets, why not us?
”We like the infrastructure space for its long-term cashflows but we can also help communities unlock benefits for the good of our owners.
“Always we are trying to connect the commercial with social good. We need to create wealth for our people but we are also mindful of our social responsibility.”