Property trusts in line for shake-up

Photo / Richard Robinson

Management of two NZX-listed property trusts could be sold and one institutional fund manager is calling for big reforms.

ANZ National Bank said it had offers for the management contracts for Vital Healthcare Property Trust, previously ING Medical Properties Trust, and Argosy Property Trust, previously ING Property Trust.

Both changed their names after ANZ bought ING.

Shane Solly of Mint Asset Management, which holds units in both trusts, hoped the managers would be internalised so investors could get direct control of the management.

This had already happened at DNZ Property and now was the right time for Vital and Argosy to change.

Solly was not surprised about offers.

"This was an unnatural fit for the ANZ long-term. They don't own management contracts anywhere else. It may or may not be a good thing for unit holders, depends on who is involved," Solly said.

"One option that should be being considered is unit holders buying back the management rights and internalise the management at a reasonable valuation for unit holders."

Matthew Goodson of BT Funds, which holds units in both trusts, said investors wanted to see the right structures in place rather than internalisation.

"Obviously it was a very sparse announcement from ANZ and clearly they received an approach and had to disclose it. I don't really have a strong view on internalisation of the management. The management structures just need to be set up correctly," he said.

ING (NZ) also owns a stake in the trust but Craig Tyson, its equity investment manager, could not comment yesterday.

Vital and Argosy made separate but identical statements to the NZX about sales but have since issued no further details.

They said the managers of both vehicles were wholly owned subsidiaries of ANZ, which got inquiries about acquiring the management rights of its two listed New Zealand property management businesses.

"Accordingly there is no assurance that the manager will remain a member of the ANZ National group of companies," the announcement said.

The trusts


Argosy

* Market cap: $424 million.
* Units: Trading at 78c.
* Owns office, industrial, bulk retail properties.
* Owns Albany Mega Centre.


Vital
* Market cap: $193m.
* Units: Trading at $1.34.
* Owns medical buildings, hospitals.
* Owns Ascot Central, Auckland.