Invercargill City Holdings Ltd’s (ICHL) Annual Report shows the investment in the Invercargill Central Ltd development is performing as expected, ICHL Chair Brian Wood says.
Invercargill Central Ltd has recorded the value of shares in its current accounts, which shows ICHL’s shares are currently valued at $500,000.
A total of $43.2 million was originally invested in the inner city development, which included the $2.7m purchase of Readings Cinema and the adjacent buildings.
Council expected and had anticipated this change in value when considering investing in Invercargill Central and it was nothing to be concerned about, Wood said.
Council’s investment in ICL was long-term and that was reflected in the value of the investment shares as it stood now, he said.
“The decision to invest in the inner city development was not one made for commercial benefit, but rather community benefit. There are no surprises here and we knew we’d need to hold our investment for a long time.”
Council was satisfied that the steps taken to date to identify the significant risks of the project, and mitigate the impact if those risks were realised, Wood said.
When making the decision to invest, Council had considered several reasons that were outlined in the Due Diligence Report on August 12, 2019, he said.
Council believed the redevelopment was likely to make the central city a hub for retailing, business, culture, entertainment, education, and social services for Invercargill and the wider Southland region. Council also acknowledged its desire for achievement for community wellbeing outcomes by allocating sufficient funds to the surrounding streetscape, he said.
“It’s fair to say that the community feedback to date is that the investment has achieved those objectives, including the streetscapes works undertaken by Council on Don and Esk streets, and that the risks of the development to date have been prudently managed.
“A key determination in the reason for Council investing was the lack of commercial return as noted to be balanced by wellbeing outcomes.”
As progress continues on the inner city development, ICHL continues to monitor the investment on behalf of the Council.
The report can be found here.