National Property Trust seeking $25 million

By Chris Hutching

Friday 19th October 2001

National Property Trust is seeking $25 million in a capital notes issue to fund redevelopment of its Eastgate shopping centre in Christchurch and possibly leave it with additional funds for further expansion. The budgeted cost of the Eastgate redevelopment programme was $36 million, a company spokesman said.

As previously revealed (NBR, August 24), the trust has a contract to sell its Hornby Mall, also in Christchurch, for $23 million to be settled at the end of November.

The note issue would ensure there were no delays in the development proceeding in case of hitches in settlement of Hornby and it would strengthen the balance sheet.

The issue may provide surplus funds for other acquisition opportunities. But it may also solve a problem raised by analysts about how the trust will fund the redevelopment while at the same time maintain earnings when Hornby is sold.

Information released this week reveals the trust's forecast annualised gross dividends in the May 2002 and 2003 years will ease from this year's 9.2% to 9%, before rising to 10.6% in 2004 and 11.5% in 2005.

But the trust warns distributions at this level from income and capital may require adjustment to future distributions.

Tenants already confirmed for the shopping centre include Farmers, which will lease a two-level store, and a revamped Countdown supermarket.

National Property's portfolio comprises 45% in office, 46% retail and 9% industrial.

The interest rate on the notes has yet to be decided in consultation with underwriter ABN Amro Craigs. They are for an initial three-year term.

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