Westpac property growth trust

Press, 5 November 1984, Page 30

Westpac property growth trust

PA Sydney Westpac Banking Corporation has launched in Australia a Real Property Growth Trust, adding to its already sAust3 billion (SNZS.2 billion) assets under investment management which includes mortgage, property, and equity trusts. Westpac’s chief manager of the investment division, Jim ' Goldman, said the trust’s target wsa sAustloo million (SNZI74 million) under management by raising $5O million (SNZB7 million) in subscriptions and ?50 million in borrowings. However, he was quick to emphasise the trust was a long term prospect only suited to the investor who did not want immediate income and would wait five to ten years to get the benefit of the investment.

“We are aiming to the high net worth individual with a high income who doesn’t need more income,” he said. The trusts will not be listed on the stock exchange and will be a growth trust as distinct from an income trust that makes regular payments to the investor. Mr Goldman said there was already sAust7 million (about SNZI2.2 million) committed by Westpac investors to place in the trust, however other sources told AAP the figure was more likely sAustls million (SNZ26 million). As far as property pur-

chases were concerned, the trust was already committed to a sAust6 million (5NZ10.4 million) property in South Australia and was “looking at purchasing” a shopping centre in Sydney, with Coles and K-Mart as the anchor tenants. “The structure of the new trust portfolio will be 60 per cent commercial businesses in the CBD, 20 per cent retail, and 20 per cent industrial property,” Mr Goldman told a media luncheon.

There would be no frontend load fee, unlike several other property trusts which charged an average of eight per cent, but to discourage short-term investors there would be a rear-end load if funds were withdrawn before a minimum of five years.

Westpac also offers an unlisted income property trust; however, instead of making returns to the investor the latest trust Would re-invest income in other properties. It would charge a management fee calculated on a quarterly rate of 1.5 per cent per annum of the total tangible assets of the trust for a minimum investment of sAustsoo (5NZ870).

"Valuations on property owned by the trust will be carried out at least once every three years,” Mr Goldman said. As well, the trust would invest in mortgages, trustee investments, debentures,

stocks, shares, monies on deposit, and units in authoritised unit trust schemes.

Statistics released by the bank showed that the Westpac Property Trust returned an average total performance during the past five years of 12.9 per cent a year, with an income of 8.8 per cent and a capital gain of 4.1 per cent. Over three years the trust performed at 11.3 per cent a year returning an income of 7.5 per cent and a capital gain of 3.8 per cent. Westpac’s closest rival among the banks in the unit trust arena is the ANZ Banking Group, Ltd, which leads the field with its ownership of Australian Fixed Trusts with $1 billion (SNZI.74 billion) unit trust assets compared with Westpac’s $650 million (SNZI.I billion).

Nevertheless, Westpac has already a comfortable position in the market with $705 million (SNZI.2 billion) under management in government securities, $555 million (SNZ96S million) in other fixed interest, $485 million (SNZB43 million) in real estate, $BOO million (SNZI.3 billion) in Australian and overseas equities and $455 million (SNZ79I million) in money market assets and others.

This compares with the total unit trust industry in Australia which was worth $3.4 billion (SNZS.9 billion) at the end of September.