AMP NZ Office Trust continues to grow earnings and distributionsAugust 4, 2005 New Zealand’s largest listed investor in premium commercial office property, AMP NZ Office Trust (ANZO), has delivered a 4.3 percent increase in distributions to unit-holders for the full-year to June 30, 2005. ANZO executive manager Robert Lang said unit-holders would receive a total distribution for the full-year of 7.3 cents per unit, representing an income yield of 8.2 percent on the average unit price throughout the financial year. Along with the appreciation in unit price, this distribution provided investors with a total return of 22.7 percent for the year. “In the past two years, the year-on-year growth in ANZO’s unit-holder distributions has been four percent or higher, out-performing the listed property trust sector average of 1.2 percent. With current market and portfolio fundamentals remaining positive, the Manager is confident of sustaining future growth in distributions as previously projected,” said Mr Lang. Earnings per unit for the year were 7.71 cents, a 7.8 percent increase and also out-performing the listed property trust sector average growth rate of 4.3 percent. Mr Lang noted positive market conditions had resulted in an $82 million or 10.8 percent gain in the total gross value of ANZO’s investment portfolio, which in turn had lifted net tangible assets 10.7 percent to 100.4 cents per unit. “ANZO’s strong performance reflects the quality of the portfolio, strength of underlying office markets and focussed management team which continues to optimise unit-holder returns,” he said. Net property income (total rental revenues less direct property expenses) rose by 32.8 percent to $64.0 million. ANZO’s year-on-year comparisons continue to show the effects of recent transactions (the acquisition of three new properties, and capital management changes including debt and equity-raisings). On a like-for-like basis, the increase in net property income was 2.8 percent. ANZO’s net surplus after taxation and before revaluations was $34.5 million (2004: $34.3 million). The net surplus increases significantly to $88.2 million when $53.7 million of unrealised revaluation gains and development margin are included. Following a series of positive capital management initiatives ANZO’s balance sheet is in a stronger position to fund growth and take advantage of market opportunities. ANZO successfully completed its 95.2 million issue of mandatory convertible notes in July 2004 and in December 2004 raised a further $32.5 million via a placement of units to institutional and professional investors. ANZO’s gearing ratio at balance date was 31.7 percent, well below the self-imposed 40 percent limit and 50 percent limit contained in the Trust Deed. Within the 40 percent limit ANZO has capacity for further investment of $90 million. ANZO is well protected from potential interest rate rises, with 92 percent of its bank debt hedged at a fixed rate for an average term of 5.4 years. Mr Lang said ANZO’s distribution reserve account, established to maintain stability and growth of future distributions, now contains $5.6 million or 1.2 cents per unit.
ANZO’s portfolio occupancy at year-end was 95.1 percent however has since steadily increased to 97.1 percent following new leases secured post balance date. Due to proactive management, ANZO’s short term lease expiry risk is low, with less than 10,000 sqm or five percent of the portfolio’s net lettable area forecast to expire during the period to 30 June 2006. Looking further out to 2010, less than 12.1 percent of ANZO’s net lettable area is subject to scheduled lease expiries in any one year. This low expiry profile, along with a tenant retention rate of more than 90 percent and long weighted average lease term of 6.2 years, reinforces the stability of future cash flows. Mr Lang commented: “Vacancy levels in the Auckland and Wellington office markets are currently at historic lows. ANZO’s portfolio is now well positioned is to capture further growth with passing rentals, on average, 1.3 per cent below market rentals. In the period to June 2006, 17.8 percent of ANZO’s total net lettable area, or more than 36,000 square metres, is subject to rent review.” The Manager of ANZO has also announced that it is proceeding with the previously-advised Unit Purchase Plan, which was postponed earlier this year. This plan, which will be implemented during August and September, offers unit-holders an opportunity to further invest $5,000 at a unit price which is the lower of $0.89 per unit or the prevailing market value of the units as determined by the Manager at the time. More details, including the record date for entitlements, will be announced shortly. The record date for the fourth quarter final distribution instalment of 1.85 cents per unit is 19 August and the payment date is 26 August. About ANZOANZO is New Zealand’s largest listed investor in premium commercial office property. A unit trust listed on the New Zealand Exchange, ANZO currently owns 10 New Zealand office buildings with a total gross value of more than $842 million – Auckland’s PricewaterhouseCoopers Tower, ANZ Centre, IAG House and Quay Tower; and Wellington’s State Insurance Tower, Mobil on the Park, HP Tower, 125 The Terrace, No. 1 and 3 The Terrace and Pastoral House. |