Hamilton City Council has hired Deloitte to look for an investor to take over its Waikato Innovation Park Ltd subsidiary, 17 months after getting a masterplan done for its expansion.
The innovation park has 46 tenants working in 4 buildings on 17ha leased from Waikato-Tainui commercial arm Tainui Group Holdings Ltd at Ruakura, and the masterplan Beca Ltd produced for the council in November 2015 projected growth from the present $25 million value to another 12 buildings & $180 million value in 20 years.
The park has a workforce of 560, and the masterplan showed how that number could rise to 2500. Gross turnover of businesses at the park rose 42% last year, from $300 million to $427 million, and the park’s operations are self-sufficient, but chief executive Stuart Gordon said the council couldn’t divert from its other infrastructure priorities the investment needed for the park to grow.
The council opened the park in 2004 with the aim of clustering businesses to help drive economic growth by researching & developing technology in the environment, food & beverage, ICT & agritechnology sectors. The council provided $4.4 million in equity, Government grants totalled $9.95 million and the WEL Energy Trust provided $2 million at an early stage. The park company is 100% owned by the council, and it owns 70% of NZ Food Innovation (Waikato) Ltd. Callaghan Innovation owns the other 30% of that venture.
The council provides its innovation park as providing “a dynamic business campus where collaboration between business & research organisations drives commercial growth for our resident companies”.
The park’s immediate neighbours in the Ruakura innovation precinct are AgResearch and the NZ Institute for Plant & Food Research Ltd, and near-neighbours include Waikato University, Dairy NZ & NIWA (the National Institute of Water & Atmospheric Research).
Council special projects executive director Blair Bowcott said the council had fulfilled its role of establishing the park and getting it to critical mass, “but now it’s time for us to step out and for someone else to come in.
“We believe the park probably needs a minimum of $10-15 million of equity injection now to grow. Whilst the city could afford that, the city has demands which are of a higher priority.”
The Government has approved selling, and the return will be spread across the council’s core business. Protections have been put in place to prevent the buyer from veering from the masterplan.
“Investors will be buying the park’s assets at the latest independent valuation. They’ll be expected to invest a total of about $70 million over the next 20 years to achieve the park’s growth goals. We’ve contracted Deloitte, who have already been conducting best-fit analysis as part of a robust process to find the right investor.
“We’re looking for investors who can truly visualise the masterplan for the park and will retain the makeup of our tenants who are technology-based, driven by innovation and export-focused.”
22 December 2014: Tetra Pak signs up for new Innovation Park HQ
Attribution: Council releases, masterplan.