AMP NZ Office Trust secures key Government tenant as major occupier for refurbished Pastoral HouseNovember 3, 2004 AMP NZ Office Trust (ANZO) has secured the Ministry of Agriculture and Forestry (MAF) as the major tenant for Wellington’s Pastoral House, lifting the tenant pre-commitment to 90.5 percent for the office accommodation. MAF has taken a 12-year lease on 14 levels of Pastoral House, accounting for 12,002 sqm or 77 percent of the building’s total net lettable area of 15,580 sqm, including retail of 1,513 sqm. ANZO executive manager Robert Lang said the only full floor now available for lease is level 18, the top floor, along with part of level two and four. “Large floor plates in the Wellington CBD remain at a premium, particularly in the short term, and we are confident that the balance of the space will be leased by the time the refurbishment project is fully completed in June 2005. ANZO received considerable leasing interest from government tenants and also private sector tenants during the marketing of the space”, said Mr Lang. “Securing MAF as the key tenant over a large area of the building has enhanced the expected performance of ANZO’s investment in Pastoral House. Mr Lang said the refurbishment project is running on schedule and cost savings in excess of $1.5 million have been achieved, whilst retaining the quality of the refurbishment. This saving along with a higher rent owing to improving office market conditions since aquisition has enhanced ANZO’s yield on cost and refurbishment margin. The yield on cost is now expected to be in excess of 10.3 percent, while the development margin is projected to be in excess of 12 percent. New Zealand’s largest listed investor in commercial office property, ANZO bought Pastoral House late last year for $23.9m and is currently undertaking a $15.5m refurbishment of the building to A-grade quality, making it one of the top three office buildings within Wellington’s Government accommodation precinct. Located at 94-98 Lambton Quay, the 18-level building has dual frontages to Lambton Quay and The Terrace and adjoins ANZO’s existing properties at No. 1 and 3 The Terrace. “Pastoral House is the first example of ANZO’s policy to selectively take advantage of office investment opportunities outside of the prime sector,” said Mr Lang. “This is an significant first-up success for ANZO and its investors.” MAF have captured a rare opportunity to consolidate into one high quality building in Wellington and in the process will benefit from a central location in the core Government precinct and achieve reduced operating costs associated with efficient A-grade office property. MAF’s Director-General Murray Sherwin said he was pleased to have concluded the Pastoral House lease. “MAF has been actively pursuing new accommodation options for some months because we need to be able to consolidate all of our various Wellington-based functions and give ourselves some flexibility that our current accommodation arrangements do not allow. “Pastoral House is the only current building that meets our needs. Other options would have required a building to be built for us, involving cost and timing issues that we have now avoided by being able to relocate two years earlier,” he said. “ANZO has welcomed the opportunity to work with MAF and the Government to deliver an accommodation solution that meets the stringent expectations of one of New Zealand’s key government departments,” said Mr Lang MAF will take possesstion for fitout in two tranches in January and April 2005. The lease to MAF takes the weighted average lease term (WALT) of Pastoral House to 10.4 years, the longest in the ANZO portfolio. ANZO’s market leading portfolio WALT improves from 6.3 to 6.5 years as a result. A new tenant to the ANZO portfolio, MAF becomes the fifth largest of ANZO’s Top 15 tenants. About ANZOAMP NZ Office Trust (ANZO) is a unit trust listed on the New Zealand Exchange which invests predominantly in prime and A-Grade CBD office properties in major New Zealand cities. ANZO currently owns ten New Zealand office buildings with a total value of more than $760 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. ANZO is managed by AMP Ronin Management Limited. Media enquiries: Brett Sangster |