IHC forms new property company

Media release from IHC NZ Inc
1 July 2010

IHC forms new property company

IHC today formed a separate property company to manage its $244 million property portfolio.

The new company – called Accessible Properties – signals IHC’s intention to increase its participation in the social housing market in New Zealand and provide more accommodation for people who struggle to find somewhere to live because of health or disability issues.

IHC is New Zealand’s largest non-government provider of housing – 870 (79 percent) of its 1100 properties are houses or flats. IHC owns 700 of these properties, which are mostly residential homes. In total, the properties bring in about $13.5 million a year in rents and fees.

Until now the IHC property division has managed IHC-owned properties and also third-party leases on behalf of two IHC subsidiaries IDEA Services Ltd and Timata Hou Ltd – providers of residential, vocational and specialist services for people with intellectual disabilities. The division has also managed the property portfolio of the Wellington Housing Trust and contracts for a small amount of property management consultancy work.

Andrew Wilson is general manager of Accessible Properties New Zealand Ltd, which launches today (1 July 2010). He says forming a separate company allows the division to expand its consultancy role to social support agencies outside IHC. Ownership of all existing properties will stay with IHC, as will any future properties being used by IDEA Services or Timata Hou.

The new company is structured to allow it to own property assets for lease or rental to individuals or organisations outside the IHC group.

He says the move is in response to a shift in government policy. “The Government is trying to encourage the not-for-profit sector to step up and provide housing.

“IHC has a relatively low level of debt (9 percent of market value), well-established property management systems, and a core of professional staff. Our scope and size makes it easier to expand the business opportunities.”

Aside from providing housing for organisations outside the IHC group, the new company will also be involved in property planning services, asset management services, tenancy management services for landlords and lease and rental management services for tenants.

IHC’s Property Division becomes a separate property management company fully owned by IHC New Zealand Inc – an incorporated society whose members are mainly people with intellectual disabilities and their families and whanau. The company will operate on a tax-exempt basis, having charitable purposes. It plans to move to new offices away from IHC head office in Willis Street, Wellington. At present nine staff are employed by the property division and it is planned to increase staff as new business comes in.

Andrew says the decision to form a new company removes any link between residential tenancies for people with intellectual disabilities and the support services they receive. The new company will be seen to be operating independently of other parts of IHC – that means it can offer property services to other organisations, without them fearing the company is favouring IHC support service providers or only working in association with IHC. It will also make it clearer that when the company applies for Government or charitable funds, these will be applied to property services and not to other types of business.

IHC purchased most of its properties in the 1980s when people with intellectual disabilities moved out of institutions into housing in the community.

“It has been good for IHC to have a property investment base for financial security. It has given IHC a huge amount of financial stability,” Andrew says.

ENDS

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