Strong rental growth drives $126 million revaluation gain for AMP NZ Office TrustJune 13, 2006 Growth in office rentals has been the major driver for a $126 million portfolio revaluation gain announced today by New Zealand’s largest listed investor in prime commercial office property, AMP NZ Office Trust (ANZO). ANZO executive manager Robert Lang said the 14.2 percent unrealised gain was the strongest since ANZO was listed in 1997 and results in the portfolio value exceeding $1 billion. The revaluation, carried out annually, is subject to audit and will be incorporated in ANZO’s full-year financial result for the year to June 30, 2006, which will be announced in early August 2006. Mr Lang said “Improving office market fundamentals have led to strong rental growth – a trend we expect to continue. Investor demand for high quality real estate investments particularly with prospects of further rental growth has translated into lower capitalisation rates, which have underpinned the increase in capital values.” “Across the portfolio, ANZO’s net income has continued to increase during the year. The Trust has benefited from a very successful leasing campaign with portfolio occupancy at 99 percent since December. Similarly market rent reviews have produced an average increase of 15.5 percent in the financial period to May 2006.” Mr Lang said further growth in rentals was anticipated with prime and A-grade vacancy rates in Auckland and Wellington at historic lows. “Passing rentals in ANZO’s portfolio are currently estimated to be 6.8 percent below market rents. ANZO is strongly positioned to capture upside in rents over the next two years with approximately 56 percent of the portfolio by area subject to rent review. This is expected to underpin growth in future distributions.” As a result of the revaluation, ANZO’s net tangible assets (NTA) per unit is estimated to increase by 20 percent from $1.01 to $1.21 per unit. Gearing (total debt to total assets) is projected to be 30.7 percent, with ANZO’s balance sheet capacity rising to $150 million within its 40 percent self-imposed limit. Mr Lang said ANZO’s investment in the Wellington market in recent years had resulted in very strong returns for unit-holders. Mayfair House, which was acquired in September 2005 for $29.3 million, was now valued at $35.3 million, representing a total return of 26 percent for the nine-month period. ANZO’s redeveloped property at No. 1 and 3 The Terrace in Wellington – now 96 percent occupied and undergoing final commissioning – is valued at $76.1 million. Although the project costs have yet to be finalised, the yield on cost is expected to be approximately 9.0 percent. A further and more detailed announcement will be made in the following weeks. In dollar terms, the biggest gain in value came from ANZO’s flagship PricewaterhouseCoopers Tower in Auckland. Fully occupied and attracting market-leading rents, the property increased in value by $26 million during the year. ANZO is managed by AMP Multiplex Management Limited. 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 $1 billion – 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
|