Overseas investment decision for case 201620050 - Fletcher Residential Limited

The Ministry of Business, Innovation and Employment (“MBIE”) is leading a programme of work on behalf of Her Majesty the Queen (“the Vendor”) to identify vacant and underutilised Crown-owned land in Auckland available for housing development and to facilitate development as quickly as possible in collaboration with other parties (“Auckland Crown Land Development Programme”).

The overarching objective of the Auckland Crown Land Development Programme is to contribute to rapidly relieving supply pressure in the Auckland housing market by having additional new houses built on Crown land as soon as possible.

The land at 73-89 Moire Road, Massey, Auckland (“the Land”) is the first of a number of sites in MBIE’s development pipeline under the Auckland Crown Land Development Programme.

MBIE has established three panels of developers capable of delivering low, medium and high density housing under the Auckland Crown Land Development Programme. The Applicant was offered the Land for development as the Applicant is the first ranked developer on the low density housing panel.

The Applicant and Ngāti Whātua Orakei Whai Rawa Limited (“Ngāti Whātua”) have agreed to establish a limited partnership (“the Moire Road Limited Partnership”) to undertake the Investment and the development of the Land. The Applicant will contribute 51% and Ngāti Whātua 49% of the capital required by the Moire Road Limited Partnership.

The Applicant and Ngāti Whātua intend to appoint the Applicant as the development manager for the development of the Land.

If the Moire Road Limited Partnership is not established, the Applicant will proceed by itself with the Investment and the development of the Land.

The Applicant intends to develop 197 residential lots (“Lots”) on the Land of which either the Applicant or the Moire Road Limited Partnership will:

• Acquire 138 of the Lots to build residential dwellings for on-sale to third party purchasers; and
• Build “affordable” homes on 59 of the Lots which will either be retained by the Crown or, at the Crown’s option, be acquired by the Applicant or the Moire Road Limited Partnership to first offer for on-sale to community housing providers or to third party purchasers who meet specific eligibility criteria before they can be sold on the open market.

The overseas investment transaction has satisfied the criteria in section 16 of the Overseas Investment Act 2005. The ‘benefit to New Zealand’ criterion was satisfied by particular reference to the following factors:

Overseas Investment Act 2005
17(2)(a)(iv) – Greater efficiency

Overseas Investment Regulations 2005
28(a) – Consequential benefits
28(c) – Adversely affect New Zealand’s image overseas
28(e) – Previous investments
28(f) – Advance a significant Government strategy
28(j) – Oversight and participation by New Zealanders