AMP NZ Office portfolio value falls by 4.3%, trust sees signs of demand pickup

Thursday 17th December 2009

AMP NZ Office Trust, whose investments include Auckland’s PricewaterhouseCoopers Tower, said the value of its properties fell 4.3% in the final six months of 2009.

The trust’s interim valuation shows the portfolio fell by $60.2 million to $1.33 billion between June 30 and Dec. 31. The reduction in value will be reflected in the trust’s first-half results, chief executive Robert Lang said in a statement.

He said that while New Zealand’s economy “continues to face headwinds,” there are signs of an improvement in business conditions and a pickup in enquiries from tenants “looking to capture cheap rents and incentives while they last.”While vacancy rates have increased in line with expectations, recent significant leasings in the Auckland market “have improved the near-term supply risks,” he said.

Commercial property in New Zealand had a total return of -3.54% in the 12 months through September, according to the Property Council/IPD Property Index. Connal Townsend, the property Council chief executive, said last month that with markets at or near their trough, some investors “are seeing this as a timely opportunity to acquire real assets at value prices.”

The revaluation won’t affect AMP NZ Office’s distributions to unit-holders, which are forecast to rise 2% on a gross basis in the full year.

“The balance sheet remains in strong shape to withstand the valuation headwinds lingering in the wake of the global financial crisis,” Lang said. ANZO’s gearing ratio is forecast to be about 21.8% at Dec. 31, while its loan covenant ratio is 40%.

ANZO’s net tangible assets per unit will fall to about 92 cents as at Dec. 31, from 97 cents at June 30, Lang said.

The trust’s units fell 2 cents to 76 cents yesterday and have declined almost 25% this year.

Businesswire.co.nz

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