Overseas investment decision for case 200810051 - Valad New Zealand Storage Property Trust

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment.

The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Background to the Investment:
The Valad Property Group (VPG) has acquired a number of self-storage sites throughout New Zealand as part of an ongoing joint venture arrangement with Kennards Group (Kennards). Typically VPG provides funds for the joint venture and Kennards provides expertise using its experience in the industry to improve operations and to re-brand the facility in Kennards' brand.

Outline of the Investment:
The land is currently used to operate a self-storage facility. Valad Commercial Management Limited, a wholly owned subsidiary of VPG (VCML) as the trustee for Valad New Zealand Storage Property Trust proposes to acquire the land and the improvements, but not the business. On consent being granted to VCML it will grant a long-term lease in favour of Valad Funds Management (NZ) Pty Limited, also a wholly owned subsidiary of VPG. VPG will then engage Kennards (through Kennards Storage Management Pty Limited) to manage the facility.

Rationale for the Investment:
The self-storage market in New Zealand is highly fragmented with many small operations and only a handful of multi-site operators. The level of sophistication and professionalism within these operators is low and there is an opportunity for consolidation of some of the smaller operators and also to acquire some of the larger sites.

The joint venture arrangement between VPG and Kennards means that through VPG's capital and Kennards expertise in self-storage they consider they can significantly improve the operation of the storage facility currently on the land and to improve financial performance.

The proposed overseas investment will or is likely to benefit New Zealand (or any part of it or group of New Zealanders) having regard to the following benefits:

Overseas Investment Act 2005:
s17(2)(a)(i) - The creation of new job opportunities.
s17(2)(a)(iii) - Added market competition, and greater efficiency and productivity in the Applicant's business.

Overseas Investment Regulations 2005:
r28(b) - Key person in a key industry of a country with which New Zealand would benefit from improved relations.
r28(c)(i) - Adversely affect New Zealand's image overseas.
r28(e) - Previously undertaken investments beneficial to New Zealand.
r28(f) - Give effect to a significant Government policy or strategy.
r28(g) - Enhance the viability of other overseas investments