Forum Archive Index - February 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi hugh,
>
>
>I was struck by you saying that you wouldn't invest in
>property shares because of your investment in your house and that 
>you therefore thought you ought to diversify.
>
>I agree that investment in one's own house is sunk money, its a bad
>investment. We do have a flat out the back which mitigates it a bit.
>But if it wasn't for sentimental reasons and my wife's attitude I'd
>flog the house off and put it into something productive.
>
>


I think there is a place for sentiment.  You might as well live 
somewhere that, if it doesn't give you pleasure is a least not a pain 
to live in.  A house may be a poor 'investment', but in my view a 
house should be more than an investment.

Further, I don't think it is true to say all houses are poor 
investments.  Indeed if you can get into a highly desirable area due 
to some unique 'difficult to duplicate' feature: perhaps somewhere on 
the beach front, overlooking a harbour or a lake, very close to the 
centre of a major city with some land, or in an area where no more 
building permits will be granted then you can have a 'Warren Buffett' 
style house! 


>
>But the non housing property is a totally different kettle of fish 
>to the housing market. There are several segments, Property for 
>Industry for factories/warehouses, 
>


And the distinctive uniqueness of a warehouse that might house a 
factory is?   What is to stop your factory moving to an adjacent 
warehouse?

>
>then there are offices specialists 
>

What what is top stop a firm from moving from one office building to 
another?

>
>and until it lost the plot Capital Properties specialised in 
>government buildings in Wellington, a very rewarding niche. 
>

And how do government offices differ from offices used to house 
private sector firms?

>
>Shopping malls is another sector 
>

I'll make an exception for this one.  I used to hold some St Lukes 
Convertible Notes, in the hope they would convert to St Lukes Shares 
a couple of years ago.  Unfortunately they were bought out by their 
Westfield parent.  But I might invest in shopping centres if I could 
find a premium NZ Shopping Centre owner to invest in that would give 
me imputation credits.

>
>and apartments another, 
>

Another sector to avoid you mean?   Today's premium apartments will 
be tomorrows cheap ghettos IMHO.


>
> maybe there will even be a farm property sector again one
> day. These property sectors are marked by the very qualities
> you were recommending, steadiness, growth, reliability.
>


Certainly NZ farmland does seem to be good, and stands comparison 
with anything anywhere else in the world.  I'd certainly be a buyer 
at the right price if the right investment vehicle was available


In conclusion, actually I lied in that I do have one property 
investment or one I regard as such:  That being Sky City 
Entertainment Group.   Think about it.  A series of unique sites 
across this country, and one in Australia.  It isn't like Las Vegas, 
where anyone can cobble up a casino next door to you.  Legislation is 
in place to limit any competition.   Good yield, and if they can get 
their other Casino's working as well as the Auckland one..... 

Sky City Entertainment Group is my kind of property investment! 

SNOOPY



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