WELLINGTON: The Overseas Investment Office (OIO) has granted approval for Vinta to launch its first open-ended direct property fund in New Zealand.Vinta approved for first NZ wholesale investment fund
The Overseas Investment Office (OIO) has granted approval for Vinta to launch its first open-ended direct property fund in New Zealand. Containing selected high-value commercial property assets, the fund is expected to launch in mid-2016 to tap into the growing demand for alternative assets among New Zealand investors. The investment fund will initially include three of Vinta’s Wellington-based commercial properties, owned by subsidiary Talavera Property and predominantly leased to Crown and blue chip tenants. These high quality assets are:
The investment group plans to add further acquisitions to expand this open-ended fund in the future. Vinta’s Head of Funds Management in New Zealand, Michael Holloway explained, “there will be an initial seed portfolio but with a view to growing the portfolio over time.”
Professional wholesale investors can invest directly in this fund without requiring disclosure under the Financial Markets Conduct Act 2013. As the fund is domiciled in New Zealand and only holds NZ assets, Vinta will primarily target local investors, although the fund will be open to offshore investors too. Holloway explained that Vinta will take a multi-channel distribution approach to make the fund available to a wide range of investors, from high net worth individuals to institutions such as charities, community trusts, KiwiSaver schemes and Iwi. The fund can be invested in directly or through intermediaries and asset allocators.
This open-ended investment fund differs from most property funds and syndicates in New Zealand, which are typically based on a single asset or are closed with a view to selling in the future. Vinta offers a number of similar funds in Australia, but this is its first in New Zealand where the unlisted funds market is considerably smaller – a 13 per cent share, compared to 47 per cent of the Australian market.
Holloway views this as indicating huge potential for growth, especially with the growing demand for diversified portfolios by New Zealand investors who are seeing traditional asset classes struggle to provide sufficient income returns, due to factors such as narrowing bond yields and the increasing price to earnings ratio. Direct real estate investment is becoming an increasingly attractive alternative. Vinta’s investment fund is based in high-performing commercial property assets in prime CBD locations that offer stable, low gearing income returns and low volatility compared to other investment options.
