DNZ revalues portfolio up by $10.7 million

Friday 24th October 2014

DNZ Property Fund, the listed property investor, boosted its portfolio value by $10.7 million in the first half and has leased over three quarters of its new Auckland mall.

The Auckland-based company said the value of its portfolio of 45 properties increased a net 1.4 percent to $788 million for the six months ended Sept. 30, compared to the same period a year earlier, after 12 of its 45 properties were independently valued, it said in a statement. Its Westgate shopping centre in Auckland's northwest, which is due to be completed this time next year, is now 77.5 percent pre-leased.

During the period, DNZ also entered a new nine-year lease with Fonterra Cooperative Group at its Tyers Road property in Wellington and IAG renewed its lease for three year at DNZ's Fanshawe Street property in Auckland.

In September, the company told shareholders it wants to lift its dividends by at least 2.5 percent a year after earlier flagging that dividends would be on hold at 9 cents per share as it funded its Westgate development. The property investor expects to pay a dividend of 9.5 cents per share in the 2015 financial year, up from 9 cents a year earlier, and expects that return to lift every year, chairman Tim Storey told shareholders in Auckland last month.

Chief executive Peter Alexander, who joined the company in December, is aiming to restructure the property investor to boost returns. In May, the company posted an 8.7 percent drop in annual profit to $41.6 million in the year ended March 31, after writing down the value of development work on its Johnsonville Retail shopping centre in Wellington by $3.2 million, and a $188,000 write down on a new office building in Albany, Auckland. Net rental income rose 7.2 percent to $57.4 million.

Shares of DNZ rose 0.3 percent to $1.74 and have gained 13 percent since the start of the year. The stock is rated an average of 'hold' based on consensus of five analysts surveyed by Reuters, with a median price target of $1.67.

BusinessDesk.co.nz

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