Daily ShareChat: DNZ Property Fund

By Jenny Ruth

Tuesday 21st December 2010 3 Comments

Listed property vehicles which are internally managed produce 4% greater earnings before interest, tax depreciation and amortisation (EBITDA) than the average of those with external management companies, says Buffy Gill, an analyst at Goldman Sachs & Partners.

"We note this does not make any allowance for the relative quality of staff employed or level of services provided by the various entities," Gill says.

New Zealand currently has only one property vehicle with internalised management, DNZ Property Fund. National Property Trust's management will be internalised from April 1 next year.

Of those vehicles with external management companies, AMP Office Trust and Goodman Property Trust "appear to have the most onerous fee structures," Gill says. That's despite the changes the AMP trust made to its fee structure this year.

Kiwi Income Property Trust is about average while Argosy Property Trust, formerly ING Property Trust, and Property for Industry "appear to be the least costly," she says.

"While there are no short-term implications to our earnings, in the longer term, as individual LPEs (listed property entities) look to reset their fee structures to market, it could imply potential increases for Argosy, Property for Industry and Kiwi, or alternatively, pressure on Goodman and AMP to reduce their fees."

(no recommendation)

Comments from our readers

On 21 December 2010 at 9:59 am Jack said:

There is only one thing wrong with DNZ, it is some of the Directors. They gave Paul Duffy an Incentive if the share price went above $1.17. He got a $1m worth of shares. What happens now that DNZ is down to $1.16 ? Give them back---Yere Right !!!

On 28 December 2010 at 11:30 am Graham said:

What happens when the shares go above $1.27.Think about it.

On 7 January 2011 at 7:51 pm barrie said:

What's the bet Duffy paid and organised "friends" to up the price above $1.17 for as long as necessary just to get his $million! And yes we all need to worry about the next $1.27 incentive, soon he'll be able to out-vote everyone and screw us all again, but much harder & longer than to date. And don't forget about his partner in crime, Hassel, too!