Sharechat Logo

Signs for turbulence for buoyant Capital Properties

Friday 1st August 2003

Text too small?
Capital Properties picked an unfortunate time for its float but the company has worked hard to make up for it since. Listing shareholders, however, are still in the red and there are signs the recent burst of good news may be coming to an end.

CNZ was formed from state-owned Government Property Services, which had nine buildings with government tenants. The shares bombed straight away, falling as low as 45c, but started to climb again when the company took over Shortland Properties, with a portfolio of high-quality buildings in the capital and in Auckland.

CNZ has ridden the general upsurge in commercial property prices and cashed in on its strong share price this year to raise $44.1 million in a rights issue.

The proceeds will be used to pay off debt, reducing gearing (the ratio of debt to total assets including capital notes) to 47%.

CNZ says this will allow it to look for new properties and developments and will help refinance the $109 million notes which come due in April 2005.

One note of caution is the continued migration of private sector firms to Auckland.

At present the gap is being filled by an expanding government sector but that, one hopes, can't last for ever.

Another is lease expiries in 2005 and 2006 which, according to research by sharebroker ABN Amro Craigs, represent 17% and 23% of the rent roll respectively.

ABN nonetheless expects profits to continue rising.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria
Talisman Quarterly Activities Report to 30 June 2020
General Capital gives notice of Annual Meeting
Scales Corporation - Business Update
Fonterra Co-operative Group Global Dairy Update
Fonterra revises its 2019/20 and 2020/21 forecast Farmgate Milk Price ranges
Briscoe Group Limited Market update: 2nd Quarter Sales to 26 July 2020

IRG See IRG research reports