Winston Peters has criticised a deal in which New Zealand's largest private property fund is selling $1 billion-worth of local property to Canada's Public Sector Pension Investment Board.
The Canada board invests funds for the pension plans of the Canadian Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force.
AMP Capital Property Portfolio (APP), a unit trust set up in 2008 and open only to institutional investors, announced the sale yesterday, saying it demonstrated "the current confidence in New Zealand's economy and property market".
APP general manager Stephen Costley said the 18 properties changing hands were "essentially New Zealand-owned" through three investment entities, including the New Zealand Super Fund which holds a 29.69 per cent stake in the portfolio.
The deal is subject to the approval of the Overseas Investment Office.
Peters, the NZ First leader, said this was "another sad case of so-called international investors swapping properties amongst themselves".
"It is not a sign of the strength of the New Zealand economy at all.
"It's a sign of them being allowed to engage in speculation in the New Zealand market."
Costley said AMP Capital would continue to provide management services for the properties and the transaction would be seamless for tenants who all have lease arrangements in place.
"We will just continue in a business as usual fashion and manage these properties for the new owner, looking to add value for them."
He believed the deal would provide a "positive benchmark" for property in New Zealand.
"One of the attributes . . . of the deal is it reflects an external investor's confidence in the New Zealand marketplace, the growth that is evident in the marketplace, and the way it's been performing and is forecast to perform."
The New Zealand Superannuation Fund would realise its stake as a result of the portfolio being sold.
Guardians of New Zealand Superannuation chief investment officer Matt Whineray said the sale was timed to take advantage of favourable market conditions.
"As a long-term investor, the NZ Super Fund has a greater ability than many investors to choose when to realise its investments. The opportunity to sell the portfolio to a single buyer was an attractive one."
Sale proceeds would be invested in "predominantly growth-oriented domestic and international investment opportunities", Whineray said.
The 18 properties in the portfolio include Wellington's Freyberg House, Aitken St Justice Centre, Aitken St PwC Tower & Capital on the Quay St Paul's Square, Pipitea St And Auckland's Botany Town Centre Manukau Supa Centa Tower Centre, Queen St
- The Dominion Post