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Property stars for AMP

The media spotlight has been on the housing sector of late, but commercial property is also performing well enough that New Zealand’s biggest fund manager is calling it the star asset class in the year ended March.

Thursday, April 25th 2002, 11:31PM

by Jenny Ruth

It is also performing well enough that property syndication is making a come-back after several years of troubled times, according to AMP Henderson property manager Anthony Beverley.

Beverley says while the benchmark NZSE40 share index produced a 0.7% return in the March quarter and a 7.8% gain for the year ended March, listed property companies managed a 1.3% return in the quarter and a 14% return for the year.

The investment market generally is "flush with cash," and the significant gap between property yields and the interest rates available elsewhere is a key attraction he says.

"There’s a lot of money out there looking for a home. It’s an equity hungry market and a lot of that money has gone into property," Beverley says.

Despite the syndicated property market’s well-publicised difficulties in the past, Beverley says one reason for its recent signs of life is "there’s so little choice."

The industrial property sector is benefiting from the strength of the export sector and producing stable yields in the 9% to 10% range.

Beverley says he’s been surprised at the strength of the retail market, where sales are running about 10% ahead of a year earlier. That kind of growth is feeding through into rental growth and retail property is yielding between 8% and 10%.

Property Council figures show retail property has been the consistent best performing property sector during the last 10 years, he says.

The office property market has also surprised AMP on the upside as it crawls out of its post-Asian crisis slump.

This is most evident in Wellington where prime quality space accounts for about 9% of the office space available, Beverley says. Space which two years ago was renting for $250 a square metre is now fetching between $325 and $350 a square metre, he says.

In Auckland, where prime space accounts for about 25% of the market, the pressures on rentals are much less marked.

The investor market in Wellington is also active. While in some years not a single Wellington office property changes hands, last year there were 17 sold, Beverley says.

AMP Henderson’s own property portfolio produced a 2.4% return in the quarter, the highest return it gained from any asset class. For the year, its property portfolio returned 10.6%, behind the 12.6% return it achieved from its actively managed equities portfolio and the 27.7% return from its recently launched Strategic Equity Growth fund.

By contrast, AMP’s passively managed global equities produced a negative 12.4% return for the year.

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 ▼6.79 ▼6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 ▼7.29 ▼7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 ▼7.39 ▼7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 ▼6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

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