BNZ trust prices drop

Press, 17 January 1989, Page 25

BNZ trust prices drop

The unit prices of the Bank of New Zealand’s New Zealand Property Trust have dropped because of a new valuation for its sole property in the Wellington business district.

The senior investment services manager for BNZ Investment Management, Mr Rod Carr, said yesterday that the building was now valued at $20.5 million, having previously been valued at $25.5M.

The new valuation reflected the depressed property sector, he said.

The unit price of the trust is now sell 84.15 c, compared with 101.35 c at December 30.

Mr Carr said that the property trust still represented a good counter cyclical investment. The trust was realistically valued, it had no debt, held $5 million in cash, and would be able to seek investments at bargain prices. The October sharemarket crash, the sharp economic recession, and tax reforms, which had adversely affected superannuation funds and life offices, offered opportunities

for investors to benefit from the return of confidence and funds to the property sector. The valuation gave the Wellington building a capital rating of 7.5 per cent yield (compared with 6.5 per cent previously) and made provision for a lack of income for one year on the remaining offices yet to be leased. The BNZ held 75 per cent of the space on a two year lease, and there had been a number of inquiries about the remaining space to be leased.