Jul 4, 2022

Selling trust

Before making any investment decision, Owen Cooney uses what he calls the “mum test”. “I ask myself if this is something I would want my mother involved in – if the answer is no, then I walk away.”

A partner at Tauranga-based law firm Cooney Lees Morgan (CLM) since the 1980s, Owen was founding partner of the firm’s hugely successful property development division. Owen was responsible for putting together groups to acquire premium property assets. Not only did he enjoy this, but he saw the benefits that could be gained. As his appetite increased, Owen’s career saw a shift in direction, and after retiring as a partner from CLM in 2020, he decided to continue with what had developed into a passion project.

Establishing Owen Cooney Consultancy at the end of 2021 seemed like the next natural step in a journey that had really started as far back as 2008 when, together with his mother and brother Pete (managing director of Classic Group), the family had been keen to purchase an investment property. “When we started looking around, we couldn’t see anything that we considered premium in that $2-3 million range. That led us to the conclusion that looking in the $10 million-plus range took us out of the ruck and above a lot of the private buyers. There was less competition, and at that price we found a different level of building.” 

When it came to starting up the consultancy, Owen already had an established client base, most of whom would have known or dealt with him over his many years at Cooney Lees Morgan. It also provided a seamless opportunity to continue working alongside his family, with OC Consultancy operating in conjunction with Classic Collectives Ltd (a joint venture company). However, part of the business model for OCC is the idea of bringing investment opportunities to a bracket who hitherto may not have looked to large commercial investment as a viable option. Those with less financial resources to invest quite feasibly might not have considered this type of opportunity would be open to them. 

“Traditionally, young Kiwis wanting to build a bit of wealth for themselves have bought a rental property. In the early 2000s there was a real boom in the concept of residential property investments – that’s been the formula for generations of Kiwis. But now it’s not quite the same – residential property has increased by 40 percent in the past 18 months, raising the deposit has become too hard for a lot of people, and the government has taken off the tax deductibility. Plus, there’s the complexity now of the tenancy laws. So, owning a private rental property is less attractive and quite hard for a lot of people.”

“You’re playing as a team rather than individually. It’s risk free from the point of view that in the structures we set up you’re not exposed to risk personally.

Commercial investment, on the other hand, requires something of a mindset change, as does the concept of pooling resources. “You’re playing as a team rather than individually. It’s risk free from the point of view that in the structures we set up you’re not exposed to risk personally. The only risk you have is losing the money you put in, which is a risk any investment has. You put your money in, you get a yield straight away – a monthly return on your money. Being involved in a larger team we can access better properties with better tenants that are going to pay the bills.”

The skill of OCC is sourcing premium properties that will bring passive investment. “Developments are too risky; we don’t bring those to these clients. Under the banner of commercial, industrial properties are considered the darling of the market. Supermarkets are a great investment. We’ve got an open mind as long as it ticks the box of long-term security of the rent.” For their part, investors need to consider this a long-term prospect, of a five-year time horizon. After this there is a strategic review (although an exit strategy can be triggered before five years).

With the benefit and comparative ease when put against a residential investment, the appeal for not just the seasoned investor, but also the younger market looking for a way onto the wealth ladder is multi-faceted. Spearheading this aspect alongside Owen is business development manager Melanie. Having worked with Owen since last year, she is excited not just about the prospects for younger clients, but also about Owen’s personal mentoring skills. “Owen would never say this about himself, but he’s awesome at helping others do better, educate and grow. There’s a better future when you’re in the game with Owen.”

As for the bottom line, Owen states: “In terms of the amount invested by individuals, of the existing investor groups we have, it varies from $250,000 to $1.5 million. As for the question of how you qualify, for now we’re working on the basis that we’re a boutique business with many of our investors being old clients of mine. What we’re selling is trust. If someone trusts us and they want to be a part of this, we’re happy to talk to them.”


Article courtesy of UNO Magazine.