BNZ Trust funds hear $100M

Press, 13 July 1989, Page 22

BNZ Trust funds hear $100M

Unitholders’ funds in the BNZ Trust Group have gone from about $72 million to just under SIOOM in the last year, according to the BNZ’s chief manager of retail financial services, Mr Rod Carr. Some of the trusts, among them international equities, were showing growth, and Mr Carr predicted increasing interest in mortgage trusts in line with overseas developments.

However, one trust that has not fared as well has been the BNZ’s property trust, with Mr Carr predicting a slow property sector for at least the next two years. In January, the BNZ Trust Group devalued its sole Well-

ington property from 525.5 M to $20.5M. The BNZ’s property trust selling prime at December 30 was 101.35 c, compared with the price last Friday of 81.68 c. However, Mr Carr said that the property trust, along with other trusts should be considered a long-term investment of at least five years, and he also emphasised that investors were better to diversify their trust portfolio into different areas such as fixed interest, equity and property trusts.

Mr Carr said he believed that it would take at least five years for the New Zealand property market to get over the present dip. •

The BNZ’s assistant manager of portfolio management, Mr Anthony Thyne, said that recent statistics showed that 26,000 jobs had been lost in the manufacturing sector, and 4300 in banking and financial services. It is estimated that those in the financial services sector take up about lOsq m of office space.

It seemed odd to see that many buildings were still being completed when there were many “for sale” and “to let” signs, but it had to be remembered that these projects had been started on the basis of business forecasts some time ago, Mr Thyne said. These business forecasts

now looked too optimistic, and it was evident that developers and contractors had over-estimated the demand for space, resulting in a surplus in the supply of buildings. J

The third players in the property market, insurance companies and superannuation funds, had substantially reduced their investments.

Recent statistics indicated that the flow of funds to insurance companies had been substantially reduced and because of changes in superannuation legislation, superannuation funds were wary of long-term projects, he said.