October 19, 2001
St Laurence Launches New Property Investment Product
St Laurence Group, one of New Zealand’s largest property syndicators, is offering a new property investment product – a
Proportionate Ownership Scheme.
Although proportionate ownership schemes are not new, this is the first time that St Laurence has used such a scheme as
a vehicle to promote a property investment opportunity. The Scheme, which has been established in accordance with the
Securities Act (Real Property Proportionate Ownership Schemes) Exemption Notice 1997, is being used by St Laurence to
target more traditional property investors, in addition to St Laurence’s existing investor base.
The property, a bulk retail building of 4894m² in Mt Wellington, Auckland, is leased to The Warehouse on a 10-year
lease. It offers investors many of the key characteristics sought in a quality property investment – a modern building
in a prime location, with a long lease to a strong tenant, at or just below its market rent value.
The Scheme offers investors the opportunity to purchase an undivided share in the registered freehold title of the
building. The freehold title will be held in a nominee company, Direct Property Investments (No1) Limited, established
on behalf of investors. Ninety-two interests in the Scheme are being offered at $25,000 each, with investors able to buy
one or more interests. Structured as an unincorporated joint venture between investors, the Scheme is established by the
execution of an Ownership Deed by the Manager on behalf of investors. The $2.3 million subscription proceeds, together
with $2.7 million of secured bank borrowings, will be used to acquire the property for $4.95 million, with fund
establishment costs of $50,000.
The Offeror’s Statement fully reflects the requirements of the Securities Act and outlines in detail the structure of
the Scheme. An attractive 10.1 per cent pre-tax cash return is forecast for investors. This forecast is calculated
solely on the basis of cash distributions of profit and ignores any retained profit or loss that may result from trading
or any increase or decrease in value of the property. Other key assumptions are that the tenant continues to pay the
contract rent, that non-recoverable operating expenses are limited to a specified amount and that bank charges are fixed
at a specified rate of 7.5 per cent.
Initial feedback from the market has been encouraging.
“The proportionate ownership scheme is new for us, but preliminary marketing suggests a strong appetite exists among
investors to share in the benefits of direct property investment without some of the hands-on, day-to-day management
responsibilities,” says Kevin Podmore, Managing Director of St Laurence Group. “Of course the current interest
environment assists, but in essence we feel that we have created a product that will have strong appeal with both the
experienced and inexperienced property investor. After all, there are not many opportunities available to invest in
property of the calibre of The Warehouse, Mt Wellington from $25,000.”
The Offeror’s Statement is available directly from St Laurence and the offer closes on 30 November 2001.
For further information please contact:
Tim Rosenberg
St Laurence Group
Ph: (04) 913-1708, Mob: 025 732-264
L5, St Laurence House, 138 The Terrace, Wellington