AMP NZ Office Trust operating profit up 8.4 percent for first quarterOctober 18, 2006 New Zealand’s largest listed investor in prime commercial office property, AMP NZ Office Trust (ANZO), has reported an 8.4 percent increase in operating profit before taxation to $9.01 million for the three months to September 30, 2006 (1). ANZO’s rental revenue for the first quarter was $25.31 million, 12.6 percent higher than the previous comparable period, as a result of rent reviews, new leases and new additions to the portfolio (the acquisition of Wellington’s Mayfair House and the recently-completed No. 1 The Terrace development project). ANZO executive manager Robert Lang said continued growth in prime office market rentals was highlighted by the fact that on a “same properties” basis (excluding Mayfair House and No. 1 The Terrace), rental revenue increased 5.1 percent. ANZO adopted the new New Zealand International Financial Reporting Standards (NZ IFRS) on July 1, 2006 (the commencement of the 2007 financial year) and ANZO’s first-quarter result has been prepared in accordance with the new standards. Click here for a detailed explanation of the changes relating to NZ IFRS and their effect on ANZO’s financial statements. Under NZ IFRS and following the redefinition of ANZO’s distributable profit announced earlier in the year, the $9.01 million operating profit before taxation represents the profit available for distribution to unit-holders. Earnings per unit assessed on the same basis were up 4.5 percent to 1.87 cents per unit. In line with expectations unit-holders will receive a first-quarter distribution of 1.892 cents per unit, a 2.27 percent increase over the previous comparable period. The record date is November 2, 2006 and the payment date is November 9, 2006. After allowing for non-cash adjustments, as required under NZ IFRS, ANZO’s net profit for the first quarter was $7.02 million, up 12.0 percent. The non-cash adjustments are subject to fair value assessments throughout the financial period, including the change in fair value of investment properties, which will be determined and reflected in the net profit announced following the close of the full year financial reporting period on June 30, 2007. ANZO’s portfolio occupancy has remained unchanged at 99 percent. Eight new leases were secured during the first quarter, covering a total area of 2,600 sqm, and six of the 11 properties in the portfolio are fully occupied. ANZO has less than 7.3 percent of its net lettable area expiring in each of the next two years and together with a tenant retention rate in excess of 90 percent provides a high level of stability and certainty with respect to occupancy and future cash flows. Ten rent reviews were completed during the quarter, resulting in an average increase of 15.5 percent over the three-year terms of the review periods. A further 45 reviews are pending this financial year, presenting opportunities to capture under-renting (where contract rents are below market levels) in the portfolio and increase rental revenue. Mr Lang commented: “With high portfolio occupancy, market vacancy at near-historic lows, robust tenant enquiry and a high number of rent reviews pending, ANZO is in a strong position to improve earnings and distributions. In addition, ANZO’s gearing (bank debt to total assets) is 29.8 percent, giving ANZO a strong balance sheet from which to grow the portfolio and further enhance unit holder returns. “Unit-holders can be confident that their distributions will continue to grow in line with, or better than, the previous year.” ANZO is managed by AMP Multiplex Management Limited. (1) ANZO’s first-quarter results each year are unaudited. About ANZO Media enquiries: |