News Round Up

New property trust, Houses less affordable, Only one AAA rated Life company now, Have your say on Workplace Insurance, Date Change

Sunday, January 16th 2000, 12:00AM

FR Partners and Ernst & Young Management Services aim to raise $34.5 million from the public for a property trust that will develop a major new building in downtown Wellington.

The Lambton Quay Property Trust will offer 17.25 million ordinary units at $1 each and the same number of redeemable units at the same price.

Besides equity the fund will have a fixed rate loan of $43.5 million.

The trust will own two buildings, the first is a 23 story Lambton Tower which is to be built by March 2002.

Also, the trust will buy the 8 story Lambton Chambers (formerly the Harcourts Building).

Investors can expect a 9 per cent return up until March 2002. After that returns the trust is projecting to pay fully imputed dividends equivalent of a pre-tax yield of 12.18 per cent for taxpayers on 39 cents, and 11.26 per cent for those on 33 cents.

FR Partners has underwritten 5 million of the ordinary units and 5 million of the redeemeables.

Homes become less affordable
Rising interest rates and house prices are making homes less affordable, according to AMP.

The December quarter AMP Banking home affordability report showed a fall of 4.3 per cent, the first significant decline in 18 months.

For the calendar year the over-all decline was 3.2 per cent. Affordability reached record levels earlier in 1999 but stabilised in the September quarter.

Further upward movement in interest rates was likely, making homes even less affordable, but any moves would only be modest. The survey indicated that for the first time in three years affordability declined in all regions during the year.

Only one AAA rated Life Company now
American International Assurance (AIA) is now officially the only AAA rated life insurance company in New Zealand. The only other AAA rated company was AMP, however Standars & Poor's downgraded it to AA+ in December. Also, S&P have put AMP on creditwatch negative status.

Have Your Say on Workplace Insurance
The Insurance Council is urging businesses, individual staff or interested parties to make submissions on the Government's proposal to nationalise workplace insurance.

It says the progress that has been made will be lost if the government brings accident insurance back under ACC.

The Accident Insurance (Transitional Provisions) Bill is before Parliament and people have until January 31 to make submissions.

Meanwhile, ACT ACC spokesman Ken Shirley says allowing businesses just three weeks to make submissions on the bill is denying many the right to have their say.

"It is outrageous that the Government has allowed just three weeks for New Zealanders to have their say on such a costly and disastrous piece of legislation that is driven by ideology rather than reason.

Date change
Armstrong Jones has had to change the published dates of its February Roadshow, Be The Best You Can Be, due to venue availability.

The correct dates are:
Christchurch, February 7
Wellington, February 8
Auckland, February 10
For more information, please contact Megan Stewart, Tel: 09-356 4000.

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