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AMP Office and National improve leasing portfolios

By Chris Hutching

Friday 10th October 2003

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Listed property trusts National Property Trust and AMP NZ Office Trust have both reported a lift in leasing activity in their key properties.

In Auckland, National Property Trust said it was close to fully leasing its AA Building, with a conditional agreement to lease 1350sq m to a government department.

The trust acquired the property for $19.8 million, a result of its takeover of Newmarket Property Trust nearly two years ago.

At that time the AA Building was half vacant but since then 1931sq m has been leased to the Department of Internal Affairs, 961sq m to Fast Lender and 441sq m to SIS Insurance on leases with an average term of six years at current market rentals, according to executive chairman Paul Dallimore.

If the latest leasing is taken up it will leave 3% or 480sq m to lease.

The building has 22 tenants on weighted average lease term of 3.9 years, returning 9.3% on the current valuation of $20 million.

Mr Dallimore said unit holders could expect the property to post significant valuation gains this financial year.

In Christchurch, the trust's flagship Eastgate Shopping Centre is also close to being fully leased with one internal store still to lease to an appropriate fashion retailer.

The share price of the trust has recovered to 97c from levels at about 91c in recent weeks following an allotment of shares to the manager of the trust.

Meanwhile, AMP NZ Office Trust has also reported an upturn in leasing activity, with six new leases secured in its Auckland portfolio and other negotiations in progress.

Executive manager Rob Lang said AMP NZ Office Trust's outlook was improving, partly as a result of rising business confidence, and tenant enquiry levels were higher than the same time last year.

Its Wellington properties are fully leased and the trust is now concentrating on the four Auckland properties ­ IAG House, ANZ Centre, Quay Tower and PricewaterhouseCoopers Tower.

During the financial year to June 30, AMP NZ Office Trust recorded its largest annual leasing total since it listed in 1997.

Forty-three new leases and lease renewals were negotiated covering 36,000sq m of space or 25% of the portfolio.

In Wellington, the trust recently announced a redevelopment project at No.1 The Terrace.

The trust's share price has eased since a 91c high in January to about 81c more recently, possibly because investors are concerned about the ability to create further value in the well-leased portfolio.

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