Investment News Globalised Economies Global Economy Is Recovering at a Healthy Pace

The World Economy The NZ Economy Global economy walking a �ghtrope NZ is the 53rd largest na�onal economy in the The views of economists across the world seems to be world measured by GDP, that the global outlook is unchanged, as global risks appear but is one of the most to be balanced. The latest data for Q1 suggests that the Investment News globalised economies global economy is recovering at a healthy pace. Following and depends greatly on a 2.6% increase in 2016, analysts forecast that the global Autumn 2018 economic growth will accelerate to 3.5% in 2017. For interna�onal trade, 2018, growth strengthens further to 3.6%. mainly with Australia, the EU, the US, China, South Korea and Japan. NZ’s currency is in the top 10 of traded Some interes�ng facts from the latest World Bank report currencies in the world. advises that in 2017: The primary sector con�nues to dominate New Zealand's The US economy represents 24.3% ($18 trillion) of exports. the world economy In its March 2017 report, the ANZ commented that “Don’t wait to buy real estate. “the economic cycle has reached a mature stage. Historically, Buy real estate and wait" – Will Rogers China is in second place at 14.84% ($11 trillion), sharp slowdowns have followed”. but catching fast as they forecast growth of 6.7% in They considered that “the credit/housing related excesses 2017 compared to the US growth of just 1.6%. are being more ac�vely curtailed, which lessens the odds Welcome to this Autumn 2018 edition of Maat News as we leave behind of imbalances building further and ul�mately bringing about a nasty future correc�on”. They forecast that the the hottest summer on record in many cities and towns throughout NZ. In annual GDP growth should be around 3% over 2017 and this addition, water temperatures have been 2 degrees above the average, so it has seems to be the expecta�ons of other economists and the Government. been a summer to remember. Neil Tuffin - Director Maat Financial Services We are commi�ed to building Maat's Philosophy financial security for our investors and many others who have the need. We again thank you for your support and loyalty in assisting us to develop our business based on the principles Led by Paul Tuffin, Maat Financial of Maat – the Egyptian Goddess of Truth, Justice and Balance. Services provides the required personal insurance advice and service to assist The Maat directors and staff are committed to building strong personal relationships through the twin pillars of individuals and businesses to secure trust and ethics to: their income and/or to protect their business exit strategies or continuity if • Provide investors with the opportunity to subscribe for equity in an insured event occurs. Paul Tuffin - Advisor investment companies which are formed to own each individual property As one of its diverse markets, Maat Financial Services provides • Enable equity investors to have the right to appoint directors These figures need to be taken in context though, as it is more companies with the opportunity to benefit their employees by and property managers for the investment company likely that emerging economies will grow at a faster rate than implemen�ng an Insurance Group Scheme. NZ companies are • mature economies. Maximise returns for investors, through minimising issue costs; slowly catching up to this employee benefit that has become the minimising on-going management fees and not receiving further According to the World Bank Report. One of the most norm in many developed countries throughout the world. remuneration for share transfers interes�ng developments going on in the world at the moment Some startling sta�s�cs are available in NZ in regards to the • Have transparency, so that investors have sufficient information is in Africa. China is involved in Africa in both an official impact of income lost through a personal tragedy. One key fact is and knowledge to understand the nature of the product that capacity and as a major source of private investment. China is they are investing in that every year over 50,000 New Zealand households lose preparing to relocate 85 million light manufacturing jobs from the main income earner's salary through illness for at least • Give New Zealand residents an opportunity to own shares in a higher-income East Asian economies, including its own, to company which owns commercial property in their own country Africa. This represents an important opportunity for Africa six months. "Maat’s mission is to share our knowledge to create more and be�er employment opportuni�es for • Purchase properties as individual entities which are required to and resources and provide the highest level its ci�zens, thereby reducing poverty and suppor�ng Maat’s Goal achieve the assessment criteria we impose for stand alone of personal service." investments, rather than creating a fund for investment dynamic growth. Maat's goal is to continually measure our organisa�on’s performance against our own high expecta�ons. We • Retain significant cash reserves to meet the needs for future Italy is also thought to be in a posi�on to lead the use of working capital and capital expenditure requirements African made goods to boost consumer confidence. It is will always strive to do what’s possible. If we can’t achieve it, forecast that, together, “Chinese and Italian firms can it may not be possible. overcome the challenges posed by an unstable poli�cal If you have any queries about our business or your environment and limited financial and human resources”. As a result of implementing our equity investment strategy, Maat’s offers are clearly different from investment offers by investment, please call Neil direct at any �me on 021 481 441, or Proportionate Ownership Schemes which are controlled by licensed issuers under the Managed Investment Scheme (MIS) contact the administra�on office on 09 414 6078 and speak with regime. Jodi. Maat now manages twelve properties, with a market value of $260m. Our latest offer is detailed in this Newsletter for your consideration. The $40m pending purchase of 306 Cameron Road, Tauranga, will increase Maat’s portfolio of properties managed on behalf of investors to $300m.

Winter 2017 Maat Investment News | Autumn 2018 09 414 6078 [email protected]

As is the traditional pattern, the tightening of supply in b) The Maat Directors made a decision in the last quarter We have been fortunate to employ New Offer – Fred Thomas Investment Limited Auckland has led to the increase in prices and is of 2016 to con�nue to offer our investment Natalie in an accounting/ followed 18 months later by increased demand and opportuni�es by way of issues of equity. However, In administration role to take over a We are pleased to finally bring to the market an offer which meets lack of supply in other main centres. This is the same order to be eligible to con�nue in this manner, we have number of tasks from Jodi, who is our criteria of being a quality property with a range of quality tenants, pattern in residential property demand. Even regional not only had to ensure that we were compliant with the focussing on her expanding role as and which has a satisfactory return for investors. It has been an centres across the country are now benefiting from the Act but also that we complied with the decree in the Investor Relations Manager. Natalie demand for good quality commercial property. We first quarter of this year from the Financial Markets has held similar roles previously and intense last 9 months for Maat as we have been active in a series of Authority (FMA), who administer the Act, which states worked for us for two months on a property analysis as part of the type of business we are in. continually receive informa�on regarding the availability of regional commercial proper�es with that investments by way of an issue of shares (as per casual basis, during which time she We are now underway with the capital raising period for yields of 6%-6.5%, which does not fit our model but, no Maat’s offers) will be treated as a Managed Investment developed into a key member of our pending purchase of 2-4 Fred Thomas Drive, Scehem (MIS) unless the offer en�tles the investors to: staff and now is full-time. doubt, will be purchased by someone who has a Takapuna, North Shore, Auckland. Natalie Bell - Accounts different goal. • Have full voting rights An insert is enclosed with this newsle�er which • Have the right to appoint the Directors of the Please get to know all of our staff. expands on the key features of this investment. A new obstacle has entered the pathway of commercial company formed for the equity Their goal is to serve our investors • Have the right to terminate the contract of the well, by attending to all of our Applications close August 23 property investors - the lack of guaranteed finance. The stakeholders’ key issues. large Australian owned banks are having to ra�on their manager with immediate effect and without an on- Settlement will be August 31 going contractual obligation available funds as a result of Reserve Bank controls and Charitable Organisa�on Support Please contact either the Office: 09 414 6078 too much lending having been completed over the last 18 As a result of our strategy, Maat’s offers are clearly We are pleased to contribute financial support in some or Jodi: m: 021 0844253 [email protected] months. The banks only have 12.5% of their lending book different from investment offers by MIS licensed issuers. small way to organisa�ons to which our investors belong or Neil: m: 021 481 441 ntuffi[email protected] available for commercial property investment, as regulated The important dis�nc�ons are that in the Maat offers and which we believe are driven by passion, excellence by the Reserve Bank. Banks are rationing their funds in investors will: and public benefit. We assess each contribu�on on its The Commercial Property Market various ways, including one bank withdrawing their • Have control of the governance of the company; merits and were pleased to make a dona�on to the support for developers. and Mangawhai Ac�vity Zone Charitable Trust in the last Changes in the commercial property investment • Ensure that the manager (Maat) performs as an quarter of 2016. The Trust responded by displaying market con�nue to occur. The second difficulty for investors is the rising interest effective manager or risks being removed by the this very public ‘Thank You’ at the site of their rates as a result of banks having to source more of their improved ameni�es for their large (and growing) investors funds from offshore. This results in an addi�onal margin younger residents. being charged by the banks on their loans, although the Staffing We wish the Trust well in their quest to complete their vision for the area. exact amount of that margin is not disclosed. The deposits Unfortunately, we lost the services of Katherine at the in banks from customers have decreased significantly (to a start of this year a�er 5 years of service with us, but we low of circa 30%) as a result of the low investment interest were pleased to see her progress her career in the property industry and we hope to see her back one day rates offered and has driven investors to search for other a�er gaining lots of experience. The demand for investment in commercial property means of obtaining be�er returns. It makes it even more has increased significantly over the last three years, important that we have paramount considera�on for the We have been pleased to appoint Tony Lomas as a resul�ng in higher prices and (conversely) a significant long-term future of our investments, not just the short- Facilities Manager from May and Natalie Bell as an drop in the yields as tenant's rents have not kept pace term benefits and ensure that we have adequate cash administrator from June. A brief bio on each of these with the values of the proper�es. Demand for reserves to sustain increases in interest rates and other employees follows: purchasing has been driven by the tradi�onal scenario costs once growth in the world economy rises again. of either: Tony brings to the posi�on the To fill the availability of finance, two Chinese Government We have also supported the Auckland Manukau Dressage • developers seeking opportuni�es skills of 16 years in the police banks have become established in NZ, the China force and his experience in the Group in a small way to assist the running of their event early • private investors seeking long term returns be�er building industry. Tony’s role is in 2017. We also sponsored a North Shore Commercial than the current bank deposit rates Construc�on Bank and The Industrial and Commercial clearly to organise solu�ons for Property Group event held by the Business North Harbour • other investors who have turned to commercial Bank of China. Each of these banks has secured the both day-by-day issues and to business association of which Neil is an Executive Board real estate from their previous investment in the services of NZ employees from other banks for their manage projects, of which we member in late 2016. The Chief Executive of Auckland residen�al market business development. currently have some significant Council and a representative of Auckland Transport • syndicators who seek to provide investors with addressed the plans for roading in Auckland and, in projects underway. Tony is opportuni�es for a passive cash income stream at The Maat Directors con�nue to use our experience of responsible for property budgets particular, plans for the North Shore to cope with the a sustainable level well in excess of the bank the past to understand the reasons for the vola�lity of and long-term maintenance. Tony Lomas - expected dramatic increase in population. Facilities Manager deposit and/or bond rates investment markets. We have seen the effects of the rise and fall of the equity markets, the unrealis�c borrowing of property companies and the failure in drama�c fashion in a short �me of the inven�on of new investment products.

August 2017 August 2017 The World Economy The NZ Economy Global economy walking a �ghtrope NZ is the 53rd largest na�onal economy in the The views of economists across the world seems to be world measured by GDP, that the global outlook is unchanged, as global risks appear but is one of the most to be balanced. The latest data for Q1 suggests that the Investment News globalised economies global economy is recovering at a healthy pace. Following and depends greatly on a 2.6% increase in 2016, analysts forecast that the global August 2017 economic growth will accelerate to 3.5% in 2017. For interna�onal trade, 2018, growth strengthens further to 3.6%. mainly with Australia, the EU, the US, China, South Korea and Japan. NZ’s currency is in the top 10 of traded Some interes�ng facts from the latest World Bank report currencies in the world. advises that in 2017: The primary sector con�nues to dominate New Zealand's The US economy represents 24.3% ($18 trillion) of exports. “We are not a product of our circumstances, we are a product of our the world economy In its March 2017 report, the ANZ commented that “the economic cycle has reached a mature stage. Historically, decisions” Stephen Covey China is in second place at 14.84% ($11 trillion), sharp slowdowns have followed”. but catching fast as they forecast growth of 6.7% in They considered that “the credit/housing related excesses Welcome to another edition of Investment News.As we approach 2017 compared to the US growth of just 1.6%. are being more ac�vely curtailed, which lessens the odds Spring, that magical time of the year, it’s time again to provide of imbalances building further and ul�mately bringing about a nasty future correc�on”. They forecast that the information and to offer our thoughts on various topics throughout annual GDP growth should be around 3% over 2017 and this seems to be the expecta�ons of other economists and the this Newsletter. We trust that you will enjoy reading this edition, Government. written during the continuation of an historic period where Maat Financial Services long held economic and investing theories have been challenged. We are commi�ed to building financial security for our investors and many others who have the need. The Maat Group Led by Paul Tuffin, Maat Financial Services provides the required personal Maat’s Philosophy We thank you again for your support and loyalty in assis�ng us to develop our business based on the principles of Maat – insurance advice and service to assist the Egyp�an Goddess of Truth, Jus�ce and Balance. individuals and businesses to secure their income and/or to protect their By following these principles, the Maat Directors are commi�ed to placing the interests of investors first. Our commitment business exit strategies or continuity if to our investors con�nues to be focussed on: an insured event occurs. Paul Tuffin - Advisor • Offering investment opportuni�es which we assess will have financial As one of its diverse markets, Maat Financial Services provides stability for the long term These figures need to be taken in context though, as it is more companies with the opportunity to benefit their employees by • Giving New Zealanders an opportunity to own shares in a company which likely that emerging economies will grow at a faster rate than implemen�ng an Insurance Group Scheme. NZ companies are owns commercial property in their own country mature economies. slowly catching up to this employee benefit that has become the • Having transparency so that investors have sufficient informa�on and According to the World Bank Report. One of the most norm in many developed countries throughout the world. knowledge to understand the nature of the product that they are inves�ng interes�ng developments going on in the world at the moment Some startling sta�s�cs are available in NZ in regards to the in; is in Africa. China is involved in Africa in both an official impact of income lost through a personal tragedy. One key fact is • Minimising issue costs; and capacity and as a major source of private investment. China is that every year over 50,000 New Zealand households lose • Minimising on-going management fees for the benefit of investors preparing to relocate 85 million light manufacturing jobs from Maat Group Staff higher-income East Asian economies, including its own, to the main income earner's salary through illness for at least Africa. This represents an important opportunity for Africa six months. Types of Investment Offers to create more and be�er employment opportuni�es for The Financial Markets Conduct Act (the Act) established new rules for allowing property investment offers to the public. Two categories of offers its ci�zens, thereby reducing poverty and suppor�ng Maat’s Goal have been provided for by the Act: dynamic growth. Maat's goal is to continually measure our organisa�on’s 1) Offers from a licenced operator of a Managed Investment Scheme (MIS); Italy is also thought to be in a posi�on to lead the use of performance against our own high expecta�ons. We or African made goods to boost consumer confidence. It is will always strive to do what’s possible. If we can’t achieve it, forecast that, together, “Chinese and Italian firms can it may not be possible. 2) An Equity Investment offer overcome the challenges posed by an unstable poli�cal If you have any queries about our business or your In view of these op�ons, the Maat Directors advise that our preferred method of offer is that of an Equity Investment and the background to environment and limited financial and human resources”. investment, please call Neil direct at any �me on 021 481 441, or our decision is clarified below for your informa�on: contact the administra�on office on 09 414 6078 and speak with a) Maat’s offers for the last 5 years have been by way of investors holding shares in an investment company formed for that purpose. Jodi. We have registered those offers as a Por�olio Investment En�ty (PIE) to allow investors to benefit from the advantages of this income tax regime.

Winter 2017 Winter 2017

As is the traditional pattern, the tightening of supply in New Offer – Fred Thomas Investment Limited Auckland has led to the increase in prices and is New Offer: The key dates to note are: Capital raising close-off 12 April 2018 followed 18 months later by increased demand and Cameron Road Property Investment Limited Settlement 26 April 2018 We are pleased to finally bring to the market an offer which meets lack of supply in other main centres. This is the same We are again pleased to bring to the market an investment The Product Disclosure Statement (PDS) has now been our criteria of being a quality property with a range of quality tenants, pattern in residential property demand. Even regional opportunity which meets our criteria of being a quality distributed to those who have expressed interest and we and which has a satisfactory return for investors. It has been an centres across the country are now benefiting from the property with a range of quality tenants, from which we can would welcome your enquiry for further information on this intense last 9 months for Maat as we have been ac ve in a series of demand for good quality commercial property. We investment. ti maximise the returns for investors. property analysis as part of the type of business we are in. continually receive informa�on regarding the Your attention is drawn to our requirement to file important availability of regional commercial proper�es with documents on the Companies Office Disclose Register in We are now underway with the capital raising period for yields of 6%-6.5%, which does not fit our model but, no relation to the purchase of this property. These documents our pending purchase of 2-4 Fred Thomas Drive, include full financial statements; lease agreements; the doubt, will be purchased by someone who has a Takapuna, North Shore, Auckland. Ownership and Management Deed; and expert opinions. You different goal. may view these documents by searching the Disclose Register An insert is enclosed with this newsle�er which (No.12335), with access through expands on the key features of this investment. A new obstacle has entered the pathway of commercial www.disclose-register.companiesoffice.govt.nz Applications close August 23 property investors - the lack of guaranteed finance. The Please contact the Maat Office on 09 414 6078 or: large Australian owned banks are having to ra�on their Jodi (Investor Relations Manager) Settlement will be August 31 Mob. 021 084 4253 | [email protected] available funds as a result of Reserve Bank controls and Neil (Managing Director) Please contact either the Office: 09 414 6078 too much lending having been completed over the last 18 Mob. 021 481 441 | [email protected] or Jodi: m: 021 0844253 [email protected] months. The banks only have 12.5% of their lending book This property is located at 306 Cameron Road in Tauranga, You may also wish to view Maat’s website: www.maat.co.nz on the corner Cameron Road and 3rd Avenue. or Neil: m: 021 481 441 ntuffi[email protected] available for commercial property investment, as regulated The construction of the 5-level building was completed in Staffing and Office Relocation by the Reserve Bank. Banks are rationing their funds in The Commercial Property Market late 2016. It has 8,077 sqm of lettable area in the building. During March we have relocated to a larger office space on various ways, including one bank withdrawing their The two main tenants are the Inland Revenue Department the same floor of our current premises. Our new address is support for developers. (on a 9 year lease) and the Tauranga City Council (on a 7 B4, 17 Corinthian Drive, Albany, (previously B3). This facility Changes in the commercial property investment year lease). Together, these tenants occupy 88% of the provides greater space to meet our future requirements, market con�nue to occur. The second difficulty for investors is the rising interest property. The property is being purchased for $41,497,200, including a larger meeting room to enable us to hold seminars rates as a result of banks having to source more of their with $22,850,000 of investors’ equity to be raised. internally. funds from offshore. This results in an addi�onal margin Bank funding of 47.5% LVR will be secured to complete the We are pleased to announce the appointment of Michelle being charged by the banks on their loans, although the Lomas, a qualified accountant, as Finance Manager. Michelle purchase. We have held the estimated issue costs to 2.26% exact amount of that margin is not disclosed. The deposits (excl. GST) of the purchase price, which is historically very is one of Neil and Allyson’s twin daughters and will share the low for the industry and assists us to provide the maximum work-load with Bruce Ellis, the Finance Director. Mark in banks from customers have decreased significantly (to a Hughson, continues to hold the position of Compliance return for investors. low of circa 30%) as a result of the low investment interest Director. It is planned for the investment to be registered as a PIE rates offered and has driven investors to search for other Michelle’s husband, Tony, joined us in May 2017 as Facilities obtaining (Portfolio Investment Entity), limiting the top tax rate to 28% Manager and has significantly enhanced this very important The demand for investment in commercial property means of be�er returns. It makes it even more (from 33%). role within Maat. Tony is now assisted by Paul Tuffin, as Tony has increased significantly over the last three years, important that we have paramount considera�on for the The projected return, pre-tax, will be 7.8% per annum, becomes focussed on specific property refurbishment resul�ng in higher prices and (conversely) a significant long-term future of our investments, not just the short- payable monthly to investors. We have also retained projects. Jodi Tuffin focuses on her investor relations management role and is developing Natalie Bell to assume drop in the yields as tenant's rents have not kept pace term benefits and ensure that we have adequate cash significant cash reserves, accumulating to a projected responsibility for many of the administration tasks in the with the values of the proper�es. Demand for reserves to sustain increases in interest rates and other $558,000 at the end of the 3rd year of projections, as at normal course of business. purchasing has been driven by the tradi�onal scenario costs once growth in the world economy rises again. 31 March 2021. We have built a very efficient and effective team within the of either: A prime attraction for Maat to offer this property to the Maat organisation. This team will be added to in key areas as To fill the availability of finance, two Chinese Government market is the future development and growth of Tauranga. Maat further develops and the need arises. We will maintain • developers seeking opportuni�es Tauranga is now NZ’s 5th largest city (at 134,000); is our strategy of developing future leaders within the company • private investors seeking long term returns be�er banks have become established in NZ, the China currently NZ’s second fastest growing city (behind who will continue to abide by the principles of Maat in the than the current bank deposit rates Construc�on Bank and The Industrial and Commercial Auckland); and the population is expected to grow by 20% in future to effectively manage the fundamental objectives of Bank of China. Each of these banks has secured the our business, which includes maintaining close relationships • other investors who have turned to commercial the next 15 years to 162,000. The city boasts NZ’s largest services of NZ employees from other banks for their port. Waikato University is in the process of constructing a with our investors and tenants. real estate from their previous investment in the precinct which will bring 12,000 students in to the city. Please get to know all of our staff. Their goal is to meet the residen�al market business development. needs of our investors by responding in a professional • syndicators who seek to provide investors with The Bay of Plenty region topped the annual growth manner when attending to any issues raised by investors and/ opportuni�es for a passive cash income stream at The Maat Directors con�nue to use our experience of comparisons for regional NZ for the second year in a row to or tenants. 31 March 2017, with GDP increasing by 9% to a value of a sustainable level well in excess of the bank the past to understand the reasons for the vola�lity of $14.4bn (equating to 5.5% of NZ’s total GDP). It is also of note that our Managing Director, Neil Tuffin, holds deposit and/or bond rates the positions of Deputy Chair and Finance Committee Chair of investment markets. We have seen the effects of the rise Annual building consents of $1bn value were issued for the the Business North Harbour Executive Board, the local and fall of the equity markets, the unrealis�c borrowing of first time in 2016 and the City Council is striving to achieve business association. It primarily advocates for improved property companies and the failure in drama�c fashion in a their vision of creating a truly international city. business conditions for property owners and businesses short �me of the inven�on of new investment products. located in the local Business Improvement District.

Maat Investment News | Autumn 2018 09 414 6078 [email protected] August 2017 The World Economy The NZ Economy Global economy walking a �ghtrope NZ is the 53rd largest na�onal economy in the The views of economists across the world seems to be world measured by GDP, that the global outlook is unchanged, as global risks appear but is one of the most to be balanced. The latest data for Q1 suggests that the Investment News globalised economies global economy is recovering at a healthy pace. Following and depends greatly on a 2.6% increase in 2016, analysts forecast that the global August 2017 economic growth will accelerate to 3.5% in 2017. For interna�onal trade, 2018, growth strengthens further to 3.6%. mainly with Australia, the EU, the US, China, South Korea and Japan. NZ’s currency is in the top 10 of traded Some interes�ng facts from the latest World Bank report currencies in the world. advises that in 2017: The primary sector con�nues to dominate New Zealand's The US economy represents 24.3% ($18 trillion) of exports. “We are not a product of our circumstances, we are a product of our the world economy In its March 2017 report, the ANZ commented that “the economic cycle has reached a mature stage. Historically, decisions” Stephen Covey China is in second place at 14.84% ($11 trillion), sharp slowdowns have followed”. but catching fast as they forecast growth of 6.7% in They considered that “the credit/housing related excesses Welcome to another edition of Investment News.As we approach 2017 compared to the US growth of just 1.6%. are being more ac�vely curtailed, which lessens the odds Spring, that magical time of the year, it’s time again to provide of imbalances building further and ul�mately bringing about a nasty future correc�on”. They forecast that the information and to offer our thoughts on various topics throughout annual GDP growth should be around 3% over 2017 and this seems to be the expecta�ons of other economists and the this Newsletter. We trust that you will enjoy reading this edition, Government. written during the continuation of an historic period where Maat Financial Services long held economic and investing theories have been challenged. We are commi�ed to building financial security for our investors and many others who have the need. The Maat Group Led by Paul Tuffin, Maat Financial Services provides the required personal Maat’s Philosophy We thank you again for your support and loyalty in assis�ng us to develop our business based on the principles of Maat – insurance advice and service to assist the Egyp�an Goddess of Truth, Jus�ce and Balance. individuals and businesses to secure their income and/or to protect their By following these principles, the Maat Directors are commi�ed to placing the interests of investors first. Our commitment business exit strategies or continuity if to our investors con�nues to be focussed on: an insured event occurs. Paul Tuffin - Advisor • Offering investment opportuni�es which we assess will have financial As one of its diverse markets, Maat Financial Services provides stability for the long term These figures need to be taken in context though, as it is more companies with the opportunity to benefit their employees by • Giving New Zealanders an opportunity to own shares in a company which likely that emerging economies will grow at a faster rate than implemen�ng an Insurance Group Scheme. NZ companies are owns commercial property in their own country mature economies. slowly catching up to this employee benefit that has become the • Having transparency so that investors have sufficient informa�on and According to the World Bank Report. One of the most norm in many developed countries throughout the world. knowledge to understand the nature of the product that they are inves�ng interes�ng developments going on in the world at the moment Some startling sta�s�cs are available in NZ in regards to the in; is in Africa. China is involved in Africa in both an official impact of income lost through a personal tragedy. One key fact is • Minimising issue costs; and capacity and as a major source of private investment. China is that every year over 50,000 New Zealand households lose • Minimising on-going management fees for the benefit of investors preparing to relocate 85 million light manufacturing jobs from Maat Group Staff higher-income East Asian economies, including its own, to the main income earner's salary through illness for at least Africa. This represents an important opportunity for Africa six months. Types of Investment Offers to create more and be�er employment opportuni�es for The Financial Markets Conduct Act (the Act) established new rules for allowing property investment offers to the public. Two categories of offers its ci�zens, thereby reducing poverty and suppor�ng Maat’s Goal have been provided for by the Act: dynamic growth. Maat's goal is to continually measure our organisa�on’s 1) Offers from a licenced operator of a Managed Investment Scheme (MIS); Italy is also thought to be in a posi�on to lead the use of performance against our own high expecta�ons. We or African made goods to boost consumer confidence. It is will always strive to do what’s possible. If we can’t achieve it, forecast that, together, “Chinese and Italian firms can it may not be possible. 2) An Equity Investment offer overcome the challenges posed by an unstable poli�cal If you have any queries about our business or your In view of these op�ons, the Maat Directors advise that our preferred method of offer is that of an Equity Investment and the background to environment and limited financial and human resources”. investment, please call Neil direct at any �me on 021 481 441, or our decision is clarified below for your informa�on: contact the administra�on office on 09 414 6078 and speak with a) Maat’s offers for the last 5 years have been by way of investors holding shares in an investment company formed for that purpose. Jodi. We have registered those offers as a Por�olio Investment En�ty (PIE) to allow investors to benefit from the advantages of this income tax regime.

Winter 2017 Winter 2017

b) The Maat Directors made a decision in the last quarter We have been fortunate to employ of 2016 to con�nue to offer our investment Natalie in an accounting/ The Commercial Property Market opportuni�es by way of issues of equity. However, In administration role to take over a There are fundamental elements to all investments which order to be eligible to con�nue in this manner, we have number of tasks from Jodi, who is should be considered by investors before making the not only had to ensure that we were compliant with the focussing on her expanding role as important investment decision, including growth forecasts; Act but also that we complied with the decree in the Investor Relations Manager. Natalie income and/or capital returns; volatility; costs; first quarter of this year from the Financial Markets has held similar roles previously and diversification; borrowing power and risk. Authority (FMA), who administer the Act, which states worked for us for two months on a that investments by way of an issue of shares (as per casual basis, during which time she It is difficult to find comparative information between Maat’s offers) will be treated as a Managed Investment developed into a key member of commercial property returns and other forms of investment Scehem (MIS) unless the offer en�tles the investors to: staff and now is full-time. return in NZ and dangerous to compare with such analysis in • Have full voting rights Natalie Bell - Accounts other countries as the tax laws are not the same in both Have the right to appoint the Directors of the Please get to know all of our staff. countries. The normal comparison is between equities and • NZ commercial property development remains very active, company formed for the equity Their goal is to serve our investors property but such comparisons need to be viewed over a 10 well, by attending to all of our with Queenstown, Tauranga and Auckland leading the year period. A ‘wide-view’ analysis is provided as follows: • Have the right to terminate the contract of the development. manager with immediate effect and without an on- stakeholders’ key issues. According to Colliers International research, there were 73 a) Growth going contractual obligation Over the longer-term property has shown significant Charitable Organisa�on Support cranes in the Auckland skyline at the end of 2017, up one increase in value and not subject to the same volatility as from a year ago! Major developments are on course to be shares. With our type of property investment, the As a result of our strategy, Maat’s offers are clearly We are pleased to contribute financial support in some different from investment offers by MIS licensed issuers. completed in 2020, including the new Foodstuffs’ 65,000 movement in value is recorded annually compared with small way to organisa�ons to which our investors belong share valuations which are real-time. The important dis�nc�ons are that in the Maat offers square metre distribution building at The Landing near the and which we believe are driven by passion, excellence airport, the significant investment in retail redevelopments in Winner: Property investors will: and public benefit. We assess each contribu�on on its progress at the Botany Town Centre, Westfield Newmarket b) Income • Have control of the governance of the company; merits and were pleased to make a dona�on to the and Sylvia Park and the continued expansion of the Dividend yields on shares are generally around the 4-6% and Mangawhai Ac�vity Zone Charitable Trust in the last apartment market, led by the start of the two downtown level (but not all shares pay cash dividends), whilst • Ensure that the manager (Maat) performs as an quarter of 2016. The Trust responded by displaying complexes: the Seascape and the Pacifica. The Seascape will Commercial Property investment is likely to return in this very public ‘Thank You’ at the site of their be Auckland’s tallest apartment block at 187 metres. Hotel excess of that due to the investor using bank funding for effective manager or risks being removed by the a portion of the purchase cost. investors improved ameni�es for their large (and growing) development is also taking place, with the major expansion Winner: Property younger residents. of the Langham in progress (renamed the Cordis) and other We wish the Trust well in their quest to complete their hotel complexes being new builds or redevelopments. c) Volatility Staffing Shares can be bought and sold quickly, which brings vision for the area. It was interesting to note that Maat was the only NZ Unfortunately, we lost the services of Katherine at the greater volatility. Property tends to be much less liquid company to purchase property in Auckland with a value of due to the longer sales process resulting in less frequent start of this year a�er 5 years of service with us, but we over $50m during 2017. The other 11 properties of this size market swings. were pleased to see her progress her career in the were bought by overseas based investors. One of our goals is Winner: Property property industry and we hope to see her back one day to provide NZ residents with the opportunity to invest in their a�er gaining lots of experience. d) Costs own country, so we are pleased that we can identify Typically, property investment costs include legal fees, opportunities to secure this goal for our investors. marketing, valuation, arranger fees and bank fees. These We have been pleased to appoint Tony Lomas as a issue costs will (most likely) be greater than purchasing shares and need to be recovered from the increase in Facilities Manager from May and Natalie Bell as an The current demand for commercial property continues to be positive which has led to increasing prices and lower yields as value of the investment in both cases administrator from June. A brief bio on each of these Winner: Shares employees follows: a result of a combination of factors, including the sustained low interest rate period, the low vacancy rates, the e) Diversification continuing rising costs of new buildings and the effects of Investors in shares have more opportunity to diversify Tony brings to the posi�on the population growth. We are mindful of the effects of a ‘softer’ their shares across industries, countries and types of We have also supported the Auckland Manukau Dressage skills of 16 years in the police market when selecting properties in the current lower yield companies compared to investing in properties. Winner: Shares force and his experience in the Group in a small way to assist the running of their event early market. It is important to focus on the long-term market in 2017. We also sponsored a North Shore Commercial building industry. Tony’s role is growth prospects which are dependent on the quality of the f) Borrowing Power clearly to organise solu�ons for Property Group event held by the Business North Harbour property, alternative uses, location and lease terms. Banks are more willing to lend an investor money to buy both day-by-day issues and to business association of which Neil is an Executive Board real estate and at a lower interest rate than if they manage projects, of which we member in late 2016. The Chief Executive of Auckland secured a loan to buy shares. Property investors need to Council and a representative of Auckland Transport be comfortable with receiving loan funds. currently have some significant Investment Fundamentals Winner: Property addressed the plans for roading in Auckland and, in projects underway. Tony is There are many options for investors to invest and their particular, plans for the North Shore to cope with the g) responsible for property budgets choice will depend on their own individual investment goals; Risk Tony Lomas - expected dramatic increase in population. Property values can fall by hundreds of thousands of and long-term maintenance. their personal financial circumstances and their investment Facilities Manager dollars, but a single share investment can be wiped out horizon. Regardless of their goals and aspirations, investors completely. Remember the GFC. need to have sufficient information and disclosure available Winner: Property to them, including the nature of the investment, the associated risks and the financial projections.

August 2017 Maat Investment News | Autumn 2018 09 414 6078 [email protected] The World Economy Investment News August 2017

There are still enough positive forces that should see growth “We are not a product of our circumstances, we are a product of our For the first time since the financial crisis a decade ago, all returning to broadly around trend over the next couple of of the world’s major economies are growing. years (but probably not much more). decisions” Stephen Covey A decade after the world descended into a devastating Internationally, their global growth forecasts again “depict a Welcome to another edition of Investment News.As we approach economic crisis. Every major economy earth is expanding at steady and reasonably positive picture” in 2018, although it once, a wave of growth that is creating jobs, lifting fortunes is arguably ‘as good as it is going to get’. Spring, that magical time of the year, it’s time again to provide and tempering fears of popular discontent. The dairy markets look tentative during the first half of information and to offer our thoughts on various topics throughout No single factor seems to explain how this recovery has 2018, but most other sectors look steadier at what are happened. Each economy took its own path to recovery. currently historically high farm-gate prices. this Newsletter. We trust that you will enjoy reading this edition, The United States has been assisted by government Interest rates are expected to be stable before a gradual lift written during the continuation of an historic period where spending during the Obama administration, plus a recent from around the middle of 2019, though rate increases are $1.5 trillion shot of tax cuts. Europe is now reaping the expected to be modest. The NZD is expected to strengthen a long held economic and investing theories have been challenged. benefits of cheap money being injected by its central bank. little on most crosses out to the middle of 2018. The recovery has not been fast and many economists are Maat Financial Services sceptical that the benefits of growth will reach beyond the The Maat Group affluent and politically connected class There is a We are committed to building recognition that the working people have not benefited as financial security for our investors and many others who have the need. Maat’s Philosophy their wages have stagnated. We thank you again for your support and loyalty in assis�ng us to develop our business based on the principles of Maat – The United States, the world’s largest economy, is into its Led by Paul Tuffin, Maat Financial the Egyp�an Goddess of Truth, Jus�ce and Balance. ninth year of growth, with the International Monetary Fund Services provides the required lifting expectations for expansion to 2.7 percent this year personal insurance advice and By following these principles, the Maat Directors are commi�ed to placing the interests of investors first. Our commitment from 2.3 percent because of the tax cuts. service to assist individuals and to our investors con�nues to be focussed on: businesses to secure their income China has diminished fears of an abrupt halt to its decades- • Offering investment opportuni�es which we assess will have financial and/or protect their business exit long growth trajectory. Europe has emerged as a growth stability for the long term strategies or continually if an insured. Paul Tuffin - Advisor leader. Even Japan, long in decline, is expanding as well. • Giving New Zealanders an opportunity to own shares in a company which Maat Financial Services can also provide companies with the Rising oil prices have lifted Russian and Middle East owns commercial property in their own country opportunity to benefit their employees by implementing an economies. The result is a hopeful albeit fragile recovery, • Having transparency so that investors have sufficient informa�on and Insurance Group Scheme. NZ companies are slowly catching- one vulnerable to the increasingly unpredictable knowledge to understand the nature of the product that they are inves�ng up to this employee benefit that has become the norm in predilections of world leaders. in; many developed countries throughout the world. • Minimising issue costs; and There are always risks in economies and it’s of note that the Some startling statistics are available in NZ in regards to the • Minimising on-going management fees for the benefit of investors notion that Western markets are politically stable, is not Maat Group Staff impact of income lost through a personal tragedy. One key now always true, as the effects of Brexit in Europe and the fact is that every year over 50,000 New Zealand households presidency in the United States bring a new level of Types of Investment Offers lose the main income earner's salary through illness for at instability looming over the world economy. The Financial Markets Conduct Act (the Act) established new rules for allowing property investment offers to the public. Two categories of offers least six months. The world economy is expected to grow by 3.9 percent this have been provided for by the Act: year and next, up from 3.7 last year, and 3.2 percent in Maat’s Goal 1) Offers from a licenced operator of a Managed Investment Scheme (MIS); 2016, according to the IMF. That is positive. Yet in the years Maat will continually measure our organisation's performance or before the crisis, global growth typically exceeded 4 against our own high expectations. Maat’s mission is to 2) An Equity Investment offer percent. share our knowledge and resources and provide the highest In view of these op�ons, the Maat Directors advise that our preferred method of offer is that of an Equity Investment and the background to level of personal service. The New Zealand Economy our decision is clarified below for your informa�on: If you have any queries about our business or your investment, a) Maat’s offers for the last 5 years have been by way of investors holding shares in an investment company formed for that purpose. The latest ANZ outlook sees some headwinds ahead but please call Neil at any time on 021 481 441, or contact Jodi We have registered those offers as a Por�olio Investment En�ty (PIE) to allow investors to benefit from the advantages of this income tax “are not ready to call time on the cycle” just yet. on 09 414 6078 or 021 084 4253. regime.

Maat Investment News | Autumn 2018 09 414 6078 [email protected] Winter 2017

August 2017 August 2017