2 9
Tainui Group Holdings
Annual Report
2012
The opening of the Novotel Auckland
Airport hotel early in the fnancial year
and the completion of
ith
stages three and four opening during
the year, were signifcant contributors to
TGH’s growth in 2012.
TGH’s core focus is growing its asset base
to allow long-term sustainable returns for
its Shareholder. After an unprecedented
capital expenditure bill of $114 million in
2011, being the highest in TGH’s history,
we are now starting to see the step-
change in benefts fowing from these
two projects in the form of increased
revenue and operating cash fows.
The Novotel Auckland Airport hotel
contributed 26% of TGH’s total revenue
in 10 full months of operations, a result of
strong occupancy over a period which
included the Rugby World Cup 2011.
The hotel employs a total of 137 full and
part time staff.
has created a tremendous boost
to the local economy with construction
activity and the creation of 1,528 (2011:
1,363) full and part time jobs across the
centre. In July 2011, resource consents
for the development of the remaining
11 hectares as well as additional retail
on level one of
ere approved.
Additional development of the centre
will further enhance Hamilton City
employment and activity. The balance
of land at The Base is likely to include
an automotive precinct, health centre, a
hotel facility, commercial offce space
and, to a lesser extent, further retail.
Future residential development is
proposed for a 40 hectare rural site
located in Rotokauri - less than a
kilometre west of The Base. This sub-
division will continue recent residential
activity as the Callum Brae Tainui joint
venture residential section development
at Huntington nears completion. The
Rotokauri residential development will
also supplement the economic growth
generated from
The growth trajectory for TGH will
continue over the next few years with
the development of the remaining land
at
, and the residential section
development at Rotokauri. Together,
these projects will provide the platform
for the Ruakura development.
Apart from the major activities at
, the development of the
property located on Bryce Street in
Hamilton’s central business district will
accommodate the new head offce for
TGH - now necessary to replace the
current smaller premises – along with
additional retail.
Assets and earnings growth have been,
and will continue to be, funded via cash
fow and bank lending facilities. One
key challenge for maintaining business
growth will be access to long term
funding that matches the investment
horizons of TGH. Meeting this challenge
is part of the wider strategic planning
regularly undertaken by the Senior
Management Team and Directors.
Finistere specialises in food, energy and
health sector investments. At any one time
it will have investments in 7-15 companies,
with up to US$5 million in each.
Born in Ngaaruawaahia, Arama has been
involved in whaanau land trusts and
farming for many years. After a double
degree at Victoria University and a
spell in trade promotion and investment
banking, he became the Chairman of
Parininihi Ki Waitotara Incorporation’s
farming business in Taranaki. In 2001
he made his way to the US as Regional
Director, North America, for New
Zealand Trade & Enterprise, based in
LA. In 2005, he was approached by one
of the founders of Finistere to join the
company. For Arama it was a chance
to go back to private sector, to work
directly for a frm and to play a role in
helping grow businesses.
His background is a strong asset. “If
you’re looking to apply technology to
agriculture, you need to understand how
it might work in practice, and know how
farmers think.”
He also says that because New Zealand
needs to export to survive, its people
tend to have an international perspective.
“That’s an advantage for me. The
US tends to be quite inward looking,
because it’s such an enormous market.
On the other hand, the US is very open to
receiving the best the world has to offer.”
However he says not a day goes by
when he doesn’t think of home. “It’s
good to see the Raupatu Settlement
kicking in, and that the tribe has
been able to develop its support for
education. The best investment you can
make is in your human capital.”
growth
Arama Kukutai
One of the social investments Waikato-
Tainui makes with its annual dividend
from TGH is tertiary education grants.
Approximately 700 were given in 2011
and 800 in 2010 (the number varies
from year to year depending on what
grants are given out for other charitable
purposes, and the numbers who apply).
A recipient from earlier years is Arama
Kukutai, Managing Director and a partner
of Finistere Ventures, a venture capital
frm, based in San Diego California.
The Base with Rotokauri (in maize)