Higher occupancy, rising rents lift AMP NZ Office Trust rentals by 7.3 percentApril 26, 2006 Higher occupancy and rising market rentals continue to deliver strong performance for New Zealand’s largest listed investor in prime commercial office property, AMP NZ Office Trust (ANZO), which has reported increases in revenues, net surplus and unit-holder distributions for the nine months to March 31, 2006. ANZO’s rental revenues for the period were $70.0 million, 7.3 percent higher than in 2005. The net surplus was 4.4 percent higher at $26.8 million. ANZO executive manager Robert Lang said resilient economic conditions and strong office market fundamentals are underpinning portfolio performance. Strong office sector demand, coupled with a shortage of A-grade and prime office space, had seen rents continue to climb and portfolio occupancy remain high. Unit-holders will receive a third-quarter distribution of 1.88 cents per unit, bringing total distributions for the year to 5.58 cents per unit, a 2.4 percent increase on last year. The record date is May 10 2006 and the payment date is May 17. Mr Lang confirmed that the full-year distribution is expected to be a minimum of 7.46 cents per unit, in line with previous guidance. ANZO’s redevelopment project at No. 1 and 3 The Terrace in Wellington is undergoing final commissioning, with Practical Completion programmed for mid-May, 2006. Mr Lang said the building is now 96 percent occupied after the final full floor was recently leased to the building’s major tenant, the Ministry of Health. “Reaching practical completion will be the final phase of a two-and-half-year, $32 million redevelopment project, which has included the full interior refurbishment of No. 1 The Terrace and the construction of an adjoining low-rise annex at No. 3 The Terrace. The redevelopment will enhance returns to ANZO’s unit-holders, delivering an anticipated yield on cost of approximately 9.0 percent and a healthy double digit redevelopment margin, the latter benefiting from an improved valuation environment.” Mr Lang said the annual revaluation of ANZO’s portfolio - including the revaluation of the No.1 and 3 The Terrace redevelopment - is currently underway with the outcomes expected to be announced in June. “Revaluations are expected to have a positive impact on ANZO’s NTA with the portfolio continuing to benefit from favourable market conditions including, higher rentals, occupancy and firmer capitalisation rates, the latter reflecting strong investor demand for high-quality assets.” Prime and A-grade vacancy rates in Auckland and Wellington are at historic lows of 4.9 percent and 0.3 percent respectively, leaving few market options for tenants. ANZO’s portfolio size and active space management positions it strongly to provide and deliver a range of options catering to tenants’ changing accommodation needs. This enhances ANZO’s value proposition to tenants and strengthens its ability to capture earnings and distribution performance in the future. Mr Lang said ANZO’s portfolio occupancy of 99 percent had remained unchanged from 31 December 2005. The portfolio weighted average lease term (WALT) is currently 5.8 years. About ANZOANZO is New Zealand’s largest listed investor in premium and A-grade commercial office property. A unit trust listed on the New Zealand Exchange, ANZO currently owns 11 New Zealand office buildings with a total gross value of more than $882 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, Pastoral House and Mayfair House. Media enquiries:Robert Lang |