GOVERNMENT TO FLOAT CAPITAL PROPERTIES NEW ZEALANDFinance
Finance Minister Rt Hon Bill Birch and State Owned Enterprises Minister Hon Tony Ryall announced today the Government would proceed with the float of nine of its commercial office properties in Wellington.
The nine properties are currently part of the Government Property Services portfolio and will be passed to a new company, Capital Properties New Zealand, which the Crown is offering to the public.
"The Capital Properties New Zealand share float will be the second public offer by the Crown, following the Auckland Airport float, and will again give the New Zealand public and other investors the opportunity to participate in the purchase of a government business," the Ministers said.
A prospectus for the offer will be registered today and the public offer will open at 9.00am on Tuesday, 27 October.
Public investors will have until 5.00pm on Wednesday, 18 November to apply for shares in Capital Properties New Zealand but are encouraged to get an investment statement as soon as the offer opens next Tuesday.
119,408,157 shares will be offered to the public, professional and institutional investors. The minimum number of shares that can be applied for is 2000 shares. Applications must be in multiples of 200 thereafter.
The shares will be paid in two instalments. The first instalment of 50 cents per share is payable on application. Therefore, the minimum amount payable in the first instalment is $1,000.
The final instalment will be due on 30 June 2000. The amount of the final instalment will be set by a competitive bookbuild. But public investors who are allocated shares under the current offer and hold until the second payment will not pay more than 50 cents per share for the second instalment.
Subject to investor demand, the Government will endeavour to ensure that all those who lodge valid applications receive shares. There are no brokerage fees to the public.
The portfolio of nine properties is currently 97% occupied and over 92% of its gross income is paid by government tenants, the majority of which are on long-term leases, providing a stable and reliable income stream for investors.
Capital Properties New Zealand is forecast to provide investors with a very attractive gross yield of over 22% per year on the first instalment until 31 March 2000. The forecast gross yield on the shares for the year ending 31 March 2001 is 11.7%.
"The float represents an opportunity for New Zealanders to invest in sound commercial property with stable income streams and excellent forecast yields," the Ministers said.
"The current low interest rate environment makes the forecast returns from shares in Capital Properties New Zealand very attractive to discerning investors and those seeking a way to enhance their retirement incomes.
"With the proceeds of this sale we will continue to repay the debt of past governments, freeing up funds to invest in key social policy areas such as health and education."
To ensure as many New Zealanders as possible are aware of the opportunity to invest in Capital Properties New Zealand there will be a comprehensive information campaign with television and newspaper advertising.
Further details of the offer will be available in the investment statement when the offer opens to the public on Tuesday, 27 October. Investment statements and the prospectus will be available from Tuesday by visiting any stockbroker or calling 0800 2 CAPITAL (0800 2227 4825).
The properties are: Bowen House, Bowen State Building, Charles Fergusson Building, St Paul's Square, Defence House, Freyberg Building, State Services Commission Building, Vogel Building and William Clayton Building.