Provincia property fund gave investors a 39% ROI in the year to September 2018 – 6% cash dividend and 33% capital growth. Read on to find out more…
The graph above shows performance for the 12 months to September 2018. (Source: Reserve Bank of New Zealand, NZX, Provincia property fund.)
NZX 50 Index and Provincia figures reflect growth in capital values only. Income (dividends) is not included. In the case of Provincia, the annual 6% dividend (on current share price) increases the total annual return to 39%.
Note: Foundation investors paid $1.00 per share and are currently receiving a dividend of 6% on current share price (6% of $1.33 = 8 cents per share). In other words, their return on investment (ROI) is currently 8%.
People investing now at the current share price of $1.33 will also enjoy an increasing ROI if and when the fund’s net value increases. The shares are revalued annually and with each acquisition. “It’s based on independent registered valuations on each of the properties, so there’s no creative accounting or unrealistic projections in the figures given,” says Provincia managing director Carl Burling.
With the latest acquisition, we already have an immediate equity gain of $200,000 that is not yet reflected in the share price. You can read the article announcing the new acquisition here: https://www.
Of course, we are not able to predict the share price after revaluation, or even give an opinion on whether it will go up or down or stay the same. Such are the regulations we operate under. However, you can do your own assessment and draw your own conclusions.
A safe haven
As for the nature of the properties, Fund chairman Olly Newland likes to emphasise the secure nature of industrial property as a safe haven for investors wanting a better return than is currently being offered by bank term deposits.
Olly says, “Provincia is a very conservative investment vehicle that suits prudent investors who are risk averse.”
And Burling adds, “Return of your money is just as important as return on your money. Security is really important. That’s why we focus on vanilla industrial properties that suit a raft of different tenants.”
What we look for in new acquisitions
Provincia’s asset manager Jack Revill says, “First of all it’s got to have rock solid tenants, because the most important thing is security of income. Secondly, I like vanilla industrial buildings that suit a multitude of tenants, so we shouldn’t ever have to struggle to find a new tenant if one moves on. Third, it’s got to be able to provide a reliable yield of 6% or more.”
“And lastly,” says Revill, “it’s got to get me excited. What excites me most is finding something with the potential to add value. Every building I’ve bought so far has had an instant add-value component, and some also have additional value that is going to be realised over the coming years.”
If you’re looking for somewhere safe to park your funds and earn a decent return plus capital gains, find out more about investing in Provincia at our investor information evening this Thursday…
WHEN: Thursday 12 September 2019 at 6:15 PM for a 6:30 PM start. Allow one hour.
WHERE: Newland Burling offices, 268 Manukau Rd, Epsom
RSVP: Simply email email@example.com to register for the evening.
This content is provided for general information only and should not be relied upon or used as a basis for making any investment or financial decision. To the extent that any information or recommendations in this content constitute financial advice, they do not take into account any person’s particular financial situation or goals. As individual circumstances differ, we strongly recommend you seek independent legal and/or financial advice prior to acting in relation to any of the matters discussed herein. Neither Newland Burling & Co Ltd nor Provincia Property Fund Management Ltd nor any person involved in this content accepts any liability for any loss or damage whatsoever may directly or indirectly result from any advice, opinion, information, representation or omission, whether negligent or otherwise, contained in this content.