Classic Group partners with NZ Super Fund to tackle housing shortage
POSTED ON: 20 October 2021
A new land development company established by Tauranga-based developer Classic Group and the $58 billion NZ Super Fund aims to use its scale and capital to increase housing supply in New Zealand.
Kaha Ake (Stronger Together) aims to develop and market a range of sites across New Zealand with a focus on meeting the demand for housing.
The partnership’s first development will be in Warkworth, North Auckland delivering more than 500 lots for a new community to be developed. Over the coming years the partnership expects to achieve a development pipeline of upwards of 3,000 sites for new homes.
Classic Group Director Peter Cooney says the company sees this as an opportunity to find solutions to some of the property sector’s complex and historic challenges.
“We’re delighted to partner with NZ Super Fund. With the long-term financial support this partnership offers, Kaha Ake will be in a strong position to support the development of homes for Kiwis at a pace and scale that will help meet the demand for quality affordable housing.”
“In a complex and challenging industry, we want to work collaboratively alongside councils and Government to develop land and enable the building of homes and communities throughout the regions, at pace and scale,” Cooney says.
“We see a major opportunity ahead to address the scale and infrastructure problems bedeviling New Zealand’s property sector. NZ Super Fund shares our commercial mindset and sense of social responsibility, and we look forward to working together.”
NZ Super Fund Manager, Direct Investments Hishaam Mirza says the investment is part of a broader strategy to increase the Fund’s exposure to real estate.
“It’s great to be able to partner with a highly experienced New Zealand developer in Classic Group. We believe our capital can help create a break-through moment for a sector weighed down with interconnected challenges of affordability, land supply, lack of scale, poor infrastructure and compliance.
“In line with our commitment to responsible investment, sustainability will be at the forefront of Kaha Ake’s approach.”
The Classic Group has 25 years’ experience in the property sector and includes Classic Developments (a land development company) and Classic Builders (one of New Zealand’s largest residential builders).
Its projects include a joint venture partnership with Western Bay of Plenty District Council to deliver affordable housing in Omokoroa, a 13.8 hectare joint venture project in Papamoa, 120 hectares of future development in Tauriko, a 72 lot subdivision in Queenstown, Edgewater Apartments in Hobsonville, 650 lot subdivision at Ramarama (Hunua Views) in Auckland, as well as having worked with Kainga Ora on KiwiBuild developments in Tauranga and Christchurch. All up, Classic currently has a land pipeline of approximately 3,000 sections.
Kaha Ake anticipates making announcements on future development opportunities in due course.
Information for editors
NZSF and Classic Group have come together in partnership to form Kaha Ake, bringing together long-term financial support and experienced development capability to support the creation of homes at pace and scale around the New Zealand. The partnership is based on a $300 million dollar commitment, with NZSF having an 80% share in Kaha Ake and Classic owning the other 20%.
“Waimanawa” – Warkworth South
We have brought 10ha unconditionally and have contracted a further 27ha conditionally. An estimated 530 homes will be built with more affordable price points being targeted. The development proposes 4ha of public open space, an extensive network of riparian [stream corridor] walkways, and 1ha for a village centre. The process to this point was led by Kaha Ake with collaboration from other land owners with the area being part of a 100ha private plan change application expected to be lodged with Auckland Council in early 2022. The plan change process is estimated to take two years with land development commencing in 2024, and housing to follow in 2025.