Fact Sheet – basic details of the Sale of the Wairarapa portfolio to the
Masterton Licensing Trust (Trust House Limited)
Prepared 4 November 2009
1
Board paper prepared 17 Dec 1998
Identified 576 properties for sale
Negotiated sale price $11.5m
The net book value was $10.2m
Darroch Limited valued at $8.7m to $12.7m
Expected to realise $1.3m for govt.
Average $19,000 per unit
Covenant on sales for 5 years (no more than 10 sales per year during that period
excluding tenant sales).
Required to provide access to rental accommodation for those in need
Services to be provided in a manner which not only reflects it’s obligations to its
Shareholding Trusts, but also contributes to the social needs of the communities in
which the purchaser is involved.
Purchaser to enable tenants to purchase individual properties.
2
The Agreement was for 576 properties with an adjustment on a Pro Rata basis for
properties sold between the agreement date and the settlement date. An outright sale with
no lease, management or maintenance obligation from Housing New Zealand.
3
Appears settlement occurred sometime 1 March 1999
The final number of properties transferred 541
s9(2)(ba)
Two staff members transferred to Trust House.
4
The Trust has reported in the media and on their web site
July 2008 the assets were valued in their books at $100m
July 2008 average rental income of $146 per week per property. (they charge a
discounted market rent)
Spent over $6m through various property improvement programmes since 2000
July 2008 $1m to be reinvested in the portfolio
5
Considerations for this model looking forward
The real estate market was different 10 years ago
Properties were at market rent so it was a commercial model rather than the a social
model under SAS.
The tenant make up was different, i.e. fewer gangs members and high need tenants.
Package deals to large investors usually need to be discounted to provide a
satisfactory yield to the investor.
