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Private equity investor Caniwi adds Olympic star Waddell, hunts provincial property

Tuesday 7th February 2017

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Wellington-based private equity investor Caniwi Capital is on the lookout for regional commercial property opportunities after selling down two major assets in 2016, including quitting a Wellington CBD property just before it was damaged in the Nov.14 Kaikoura earthquake.

The firm's largest transaction in 2016 was the sale of a complex housing ANZ back-office functions in Wellington's Tory St "for a substantial gain" on the $46.5 million it paid developer Ian Cassels for the property in 2013.

ANZ occupies more than 90 percent of the 14,500 square metre complex and is on a lease expiring in 2025, with the timing reflecting "an opportune time to harvest and recycle some capital into other projects," said Caniwi principal Troy Bowker. "The price represented an annualised internal rate of return on our equity of over 50%."

The October timing "turned out to be fortuitous for us given the 7.8 magnitude earthquake in November. I understand the building suffered some damage in the quake."

Also sold for an undisclosed sum was Caniwi's largest private equity investment to date, the plastic container importer and distributor Stowers Containment Solutions, which it purchased in 2010.

That was sold to Pact Group, and ASX-listed plastics and packaging manufacturer, on a sale price multiple of seven times the original purchase price after cutting costs and quadrupling turnover, said Bowker.

"Both sales in 2016 were the result of direct approaches to us."

Following the Stowers sale, Caniwi has established a new fund 60 percent-controlled by Bowker, who has brought in his former Waikato University rowing teammate and Olympic rowing gold medallist Rob Waddell as a partner. Waddell is also the current chef de mission for the New Zealand Olympics and Commonwealth Games teams, as well as having sailed in New Zealand's most recent America's Cup bid.

That fund has bought Petroleum Equipment Services, which sells pumping infrastructure to fuel retailers and is "looking at further acquisitions within the industry".

Elsewhere, Bowker says Caniwi has between $150 million and $200 million available to invest in regional commercial property, on the presumption that Auckland city has become both over-priced and over-crowded and that a patient investor with a long term view can expect improving returns from regional property plays.

Chicken-rearing facilities leased to producers Tegel and Ingham continued to perform "extremely well" while Caniwi's two student accommodation buildings in central Wellington had seen "substantial gains" in value, with the firm intending to hold them despite high levels of offshore buyer interest.

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