Pastoral House refurbishment project a success for AMP NZ Office TrustJune 22, 2005 AMP NZ Office Trust’s (ANZO) decision to invest in refurbishing Wellington’s Pastoral House in late 2003 has proved a smart move said ANZO executive manager, Robert Lang. “This was the first of several large investments that we have made in the Wellington market in the last eighteen months. Its success endorses ANZO’s decision to execute a broader investment strategy in the office market. “We purchased Pastoral House for $23.9 million with the objective of upgrading the building to meet growing demand for A-grade and prime office space and in particular in response to a shortage of superior quality supply in the government accommodation sector. “This led to strong tenant demand and higher than anticipated rents. Along with favourable market conditions, a high-quality tenant and long lease term, and a well positioned refurbishment, this has culminated in an office building investment now valued at $50 million*. This is significantly ahead of the total cost (purchase and refurbishment) of $38.4 million,” said Mr Lang. The Ministry of Agriculture and Forestry (MAF) was secured as the major tenant in late 2004, taking a twelve-year lease on 14 levels; more than 89 percent of the refurbished office space was leased prior to completion. “The projected yield on cost at the outset of the project was estimated at 9.3 percent and was revised to 10.1 percent in November last year and has now increased to 11.2 percent. The investment (refurbishment) margin has increased from 8.9 percent to 31.6 percent. “We planned to spend $15.5 million on the upgrade but a strong focus on cost management by an experienced team meant the cost of refurbishment, now completed, was lower than ANZO’s forecasts by $1 million.” Mr Lang said the only full floor now available for lease in Pastoral House is level 18, the top floor, along with part of levels two and four, and these are expected to be leased by the end of the year. ANZO has invested over $214 million in Wellington over the past eighteen months, including Pastoral House. Other investments include the purchase in mid 2004 of two landmark office towers, Mobil on the Park and State Insurance Tower for $70.5 million and $75.3 million respectively, and the current $30 million redevelopment project at No 1 and 3 The Terrace, which is due for completion in January 2006. These investments are performing in line with expectations and have also responded to the current favourable market conditions. Mr Lang said the recent Wellington investments have added significant value to ANZO’s portfolio of commercial office property and contributed to growing earnings and distributions to our unit-holders. About ANZOANZO is New Zealand’s largest listed investor in commercial office property. A unit trust listed on the New Zealand Exchange, ANZO invests commercial office properties and currently owns 10 New Zealand office buildings – 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. * independent valuation undertaken by Colliers International as at 30 June 2005 (Unaudited) Media enquiries: |