8
received early attention, with
a formal register created, and
evaluations made of their value
for either income or strategic
purposes. For those that
were retained, independent
valuations were needed for
balance sheet purposes and to
reach agreement with tenants
to ensure fair market rentals
were being paid. “Processes
like these were vital steps in
establishing a professional
commercial reputation for the
company,” says Spencer.
The company’s big break
came in 2003 when Sir
Stephen Tindall, owner of
The Warehouse, agreed to
become the anchor tenant at
and to joint venture
the development with TGH
on a 50/50 basis. Crucially, he
also advocated for the project
with Hamilton City Council,
who at that time seemed intent
on rejecting TGH’s resource
consent application so as to
protect Chartwell Shopping
Centre. “Without his personal
intervention,
ould
not exist today, and once The
Warehouse was established
on the site, it attracted other
‘big box’ retailers, enabling the
project to gain momentum,”
says Spencer.
2005
Managed fund
investments purchased
Hamilton Riverside
Casino sell down of 15%
minority interest
Raukura Moana Fisheries
30% sell down
opens its frst
large format retail stores
2006
Puka Park Resort sold
Acquisition of two
properties in Hamilton
CBD for $13m
New directions
2007-2012
Formal discussions took
place between TGH and the
tribe to resolve a key issue
– consistency in dividend
income from TGH, making it
possible for the tribe to plan
its activities with certainty.
John Spencer says a trade-off
had to be made between the
desired level of dividend and
reinvestment in the business
(to enable capital growth).
In 2006 TGH undertook to
guarantee an annual dividend
of $10 million for 5 years, and
the company was given a
strict new focus – to maximise
shareholder wealth.
In August 2006 Mike Pohio
replaced Steve Murray as
Chief Executive. By now TGH
was once again able to borrow
money for development, via an
initial $30 million facility from
The timing could not
have been more fortuitous.
In 2007 agreement was
reached with The Warehouse
to sell its 50% share of
and with borrowed
capital, TGH was able to take
outright ownership. Placing
all TGH’s eggs in one basket
was however a risk: the plan
for developing the rest of
as still only in its
conceptual stages. Three
factors swayed the decision:
the price was never going
to get cheaper, internal
confdence TGH could go
it alone and 12 hectares on
the northern boundary that
could now be added to the
development.
It had become apparent that
further development of
ad to be TGH’s single
most important strategic
investment. There were simply
no other comparable options.
By this time the majority of
potential asset sales had been
realised. Projecting forward,
the company also knew that
income from section sales at
Huntington were coming to
an end.
Meanwhile, the
as
built, and a close relationship
was developed with Ngai Tahu
Holdings Corporation.
Throughout this period, TGH
became very concerned
about an over-heated property
market. If it defated suddenly,
property values could
plummet, risking a decline
in equity. The company did
however take confdence that
its debt to asset ratio was well
2004
2003
$M
-40
-20
0
20
40
60
80
2012
2011
2010
2009
2008
2007
2006
2005
40
23
34
(28)
52
64
69
62
22
18
net profit
(TGH andWTF)
$M
Total assets and debt
(TGH andWTF)
2004
2003
0
100
200
300
400
500
600
700
800
2012
2011
2010
2009
2008
2007
2006
2005
13
316
238
180
166
694
658
529
497
536
378
Total assets
Debt
187
88
75
180
73
4
6