AMP NZ Office Trust announces $27 million project on The Terrace, WellingtonSeptember 2, 2003 AMP NZ Office Trust (ANZO) has announced a $27 million project at its property at No. 1 The Terrace in Wellington. The project includes the $7 million full interior refurbishment of No. 1 The Terrace – to a standard equivalent to that of a new building – and the construction of a $20 million low-rise annexe on an adjoining site, creating another 5,500 sqm of office space with several of the largest contiguous CBD office floor plates in the country. Stage One – the renewal of the lease to existing tenant The Treasury, ANZO’s largest single tenant by income – has already been achieved, with The Treasury signing a new 12-year lease. Efficiencies gained from the refurbishment and changes in tenancy layout have allowed The Treasury to reduce its space from 12,000 sqm to 7,500 sqm as part of the agreement. ANZO executive manager Robert Lang said Treasury’s lease renewal will improve earnings per unit and the property’s valuation when it takes effect and has extended the weighted average lease term of ANZO’s portfolio. Mr Lang said Treasury’s continued commitment to the building – after having investigated a number of options – showed the benefits of ANZO’s active management strategy. ANZO had opened discussions with The Treasury almost two years ago – four years in advance of the lease expiry, which is scheduled for mid-2005. “By taking the time to get a clear picture of what our tenants really need, we are able to partner with them in coming up with long-term solutions, which in turn provide security of income to our investors.” ANZO is now seeking sufficient tenant pre-commitment to commence work on Stage Two, a proposed new development on top of an existing three-level carpark neighbouring and linked to No. 1 The Terrace. This will add a further 5,500 sqm to create 9,000 sqm of premium office space, with floor plates of about 2,100 sqm each. In comparison, the floor plates at ANZO’s award-winning PricewaterhouseCoopers Tower in Auckland, currently among the largest in New Zealand, are 1350 sqm. The proposed 2,100 sqm floor plates can accommodate up to 200 people and the associated office equipment providing a market leading efficiency ratio of approximately one person per ten square metres. The exterior of the proposed new development will replicate the facade detailing of No. 1 The Terrace, and will feature a central atrium drawing natural light into the core of each floor. Mr Lang said this would be ANZO’s first development project in Wellington, and is closely aligned to anticipated tenant demand. “This project will meet a great proportion of upcoming tenant demand, without embarking on a full large-scale construction project, so it will maintain the equilibrium of office space supply and demand in the Wellington market.” He pointed out that the other Wellington properties in ANZO’s portfolio are 100 percent occupied. “This is an excellent example of adding value to an existing asset,” said Mr Lang. “We are taking existing space and property and creating a unique product – tenants can enjoy the benefits of brand-new office space without the costs of moving into an entirely new building.” Mr Lang said the estimated value of the property on completion is $70 million. The project will be fully debt-funded and will deliver a yield on cost of more than nine percent. It will be accretive to earnings and distributions, and positive to NTA per unit, said Mr Lang. ANZO asset manager Paul Broughton, who is managing the project, said the rents will be below those required for new premium buildings, and likely tenants will be Government organisations or corporates seeking proximity to key Government agencies. The new development is scheduled to be complete by the end of 2005 and there have already been expressions of interest. Mr Broughton said tenants in need of space around this time would be well advised to begin considering their options now. “Tenants are coming to appreciate the economies of scale offered by carefully-designed large floor plates, as well as the less tangible benefits created within an organisation’s culture by bringing together parts of the organisation which were previously separated,” said Mr Broughton. “Combined with the advantages of close proximity to the regional and local transport hub, Parliament, the High Court and a host of Government agencies, this development offers significant benefits to tenants.” ANZO is a unit trust listed on the New Zealand Exchange, which invests predominantly in prime CBD office properties in major New Zealand cities. It owns seven of New Zealand’s premium office buildings with a total value of more than $577 million – Auckland’s PwC Tower, ANZ Centre, IAG House and Quay Tower; and Wellington’s HP Tower, 125 The Terrace and No. 1 The Terrace. Media enquiries: |