[Weekly Wrap] The return of an old friend

A storyline you will probably hear more about over the next few months is the return of syndicated commercial property. Good Returns ran a story on it this week, talking mainly about what some of the real estate companies are doing. However, we hear others are getting back into this space including the likes of St Laurence and SPI.

Thursday, April 9th 2009, 4:30PM

The reports we hear are that property is attractive as an alternative to term deposits and there is an 18-month window of opportunity where syndicators can buy and package up properties at attractive prices and returns.

Another old friend surfaced in the news this week too - Alex Fowler. Those of you who have been around for a long time will know Alex as one of the founders of the industry. The story reports on a legal stoush between him and his former group Plan B. We make no comment or judgement on the merits or otherwise of the case, but do note that this sort of action is more likely to come up in the industry as advisers move from groups.

Another story which is very interesting is our one today about ideas to make New Zealand a funds management destination on the international stage. This is a great idea and one which has surfaced previously. The earlier story I most remember is one many years ago when Anthony Quirk, while he was at Tyndall, suggested New Zealand could become the Edinburgh of the South Pacific. This is an exciting concept and it will be worthwhile watching to see if there is the courage from our leaders to go down this track.

Perhaps one of the drawbacks of trying to promote ourselves as an international funds management destination is some of our tatty baggage - particularly around some of the finance company disasters.

One such mess is Five Star Consumer Finance. We report in www.depositrates.co.nz that the directors of this group have been banned from being directors or managing companies for a while.

On the brighter side more repayments are been made to investors in some of the frozen companies. These include Geneva Finance and a payment from St Laurence is forthcoming too.

Sticking with the deposit taking sector this week we have news that Public Trust and Kiwibank have more product under the government guarantee scheme.

Across on the other side of the industry we are seeing more changes to mortgage rates and economists are predicting that the Reserve Bank will make further cuts to the OCR in three weeks' time, albeit smaller than previously.

Just this morning we have seen a little action on mortgage rates with Kiwibank cutting its two-year rates.

This is all helping to fuel the residential property market, noticeably with the younger generation. Veda Advantage reports that the baby-boomers are very active at the moment. All this is happening while QV says house prices keep falling.

Happy Easter and have a great weekend.
Philip

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