AMP NZ Office Trust to acquire landmark Wellington office propertiesMay 27, 2004 AMP NZ Office Trust (ANZO) today announced that it had entered into unconditional contracts to purchase two landmark Wellington properties, the Mobil on the Park Building and the State Insurance Tower (formerly known as the BNZ Centre), for $145.85 million (before acquisition costs). ANZO Executive Manager, Rob Lang, said the acquisitions were part of ANZO’s investment policy of pursuing growth in the prime sector of the office property market while taking advantage of other office market investment opportunities on a selective basis. “Both the Mobil on the Park Building and the State Insurance Tower are renowned for their prestige and superior locations. They have large and efficient floor plates and contemporary tenancy services, blue-chip tenant lists and occupancy rates of 98% and 98.7% respectively,” said Mr Lang. “Their acquisition will alter the geographic weighting of ANZO’s portfolio, shifting the weighting toward the strong Wellington CBD office market from 25.6% to 39.9%.” Mr Lang said the acquisitions will bring significant strategic and operational benefits for ANZO unit-holders. “The buildings are being purchased on a combined yield of approximately 8.4% including income support and other income, and before acquisition costs. After excluding capital raising costs, the acquisitions are projected to increase earnings by approximately $900,000 (0.2 cents per unit) in FY 2005. “ANZO’s Manager, AMP Ronin Management Limited, has increased the FY 2005 distribution projection to 7.2 cents per unit, compared with the 7.0 cents per unit distribution being paid in FY 2004, an increase of 2.9%. The Manager has also reconfirmed a projected annual 2.25% distribution growth rate,” said Mr Lang. The buildings have been acquired below their independent valuations and in recognition of the strategic opportunity to create long-term value, the Manager has agreed to reduce the component of its management fee attributable to the acquisitions by 50% for the 2005 and 2006 financial years. ANZO has revalued its portfolio and recorded a 2.0% increase to $613 million. Following the acquisitions, the portfolio’s value will be approximately $760 million. ANZO plans to fund the acquisitions of these landmark Wellington CBD office properties from the proceeds of an offer of 95.2 million mandatory convertible notes (MCNs) and additional bank debt. ABN AMRO Rothschild has been appointed Lead Manager and Underwriter for the offer. ANZO intends to offer existing unit-holders two MCNs for every nine units held in the Trust at 5.00pm on 11 June 2004 at a price of $1.00 each, with rights of renunciation. The offer is expected to raise approximately $95.2 million in new capital and has been fully underwritten by ABN AMRO Rothschild. New investors will be able to purchase rights where existing unit-holders elect to renounce their rights. The proposed offer is expected to open on 14 June 2004 and close on 8 July 2004. Quotation of the MCNs is expected to occur on 15 July 2004. The MCNs will convert on 30 June 2007 (or earlier in specified circumstances). The minimum annual interest rate for the interest paid on the MCNs, which will be set on or before 31 May 2004, is expected to be 8.50%. Ronin Property Group, through its wholly owned subsidiary Ronin Property NZ Limited, is fully supportive of the proposed offer, and has committed to the Underwriter to take up the subsidiary’s entitlement to its share (30%) of the MCNs. ANZO’s second largest Unitholder, AMP Property Securities Fund (managed by AMP Capital Investors (New Zealand) Limited), has agreed to renounce its 23.5% entitlement in favour of ABN AMRO Rothschild, which proposes to offer this entitlement to new investors. About ANZO It is managed by AMP Ronin Management Limited, a joint venture company formed in January 2004 by AMP Capital Investors (New Zealand) Limited and Ronin Funds Management Limited. The acquisitions will bring AMP NZ Office Trust’s total portfolio to 10 office properties, valued at approximately $760 million. * The portfolio has been revalued as at 30 June 200 |