AMP NZ Office Trust meets profit forecasts despite slow marketFebruary 22, 2000 Demand for quality office accommodation, high rates of occupancy and strong cashflow from market-leading rents combined to generate a pleasing net surplus of $16.36 million for the AMP NZ Office Trust during the six months to 31 December 1999. The result, ahead of the Trust’s forecasts, has enabled the declaration of an un-imputed interim Unit holder distribution of 3.50 cents per unit, which is consistent with the Trust’s policy of distributing substantially all of its available net surplus to Unit holders. After adjusting for abnormal items in the previous comparable period and allowing for the discounted management fee, which has been adjusted to a market level in the current period, the year-on-year net surplus was ahead by 2.5%. The Trust is a listed property investment. It owns New Zealand’s top CBD office portfolio, which comprises the ANZ Centre, NZI House and Quay Tower in Auckland and 125 The Terrace, the IBM Centre and The Treasury Building in Wellington, as well as the prestigious Wellington Parkroyal Hotel. "Demand for top quality CBD office space took our portfolio occupancy rate from 97.4% in June 1999 to 99.8% at 31 December." said the trust’s executive manager, Anthony Beverley. "This should be compared with activity across the wider CBD commercial property market, which is generally remained static. However, for well-located and prime quality buildings, rents achieved from new leases have been encouraging. This confirms our view that prime property outperforms the rest of the commercial property market. "In the last six months we have seen a flight to quality. All the leases negotiated by the Trust during 1999, and many of those completed elsewhere in the market, involved tenants moving from poorer to higher quality premises of the type owned by the Trust and demanded by discerning tenants." There was no movement in the value of the portfolio over the period. The Trust’s policy is to undertake re-valuations at its financial year-end date of 30th June, therefore the portfolio was not re-valued during the period. Net asset backing on a fully diluted basis has been maintained at 92.7 cents. Looking forward, Mr Beverley said the positive direction of the economy will inject confidence and generate activity in the property sector. It is likely to take some time before the property sector shows a significant response to better economic times, following two years of slow and limited growth. "With portfolio occupancy reaching 100% and a dominant position in the prime market – the Trust owns three of the five best buildings in Auckland, and two of the best three in Wellington – the Trust will benefit from anticipated demand from tenants and the consequential rental growth," Mr Beverley said. For more information: |