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PFI finetunes portfolio

By Campbell McIlroy

Friday 22nd September 2000

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Property For Industry has continued to rationalise its portfolio with the sale of four properties worth $2.3 million and plans to dispose of another three to four properties worth up to $4.1 million by year's end, its interim report says.

Analysts said the portfolio rationalisation and divestment programme was a signal the company was reading the market well.

PFI reported a tax-paid surplus of $4.8 million on rental revenue of $9.1 million for the six months to June 30.

Properties sold included 15 Ride Way in Auckland's North Harbour for $1.1 million. It has been leased short term and sold to Kea Property Group with settlement due in June 2001.

Three units in stage one of the property at 19-25 Porana Rd, Wairau Valley, have also been sold for a total of $1.2 million, with one remaining unit targeted for sale during the next quarter.

Stage two is due for completion this month and has been 62% pre-leased to the New Zealand Sugar Co, while stage three has been leased short term until divestment options are evaluated.

Analysts picked PFI would look to divest a further 2% of its 41-property portfolio.

PFI general manager Peter Alexander said the divestment programme would enable the company to focus on high-quality industrial properties that were easily adaptable and had a multiple number of uses.

One of the highlights for the six-month period was the purchase of the $7.13 million Recall Total Information Management property in Mt Wellington as it was a good- quality building on a long-term lease with a good-quality tenant, Mr Alexander said.

The firm also bought the $4.48 million Caroma property in Mt Wellington. This includes 8020sq m of land fronting Allens Rd, for which PFI is seeking tenant commitment for a new design-build project.

New acquisitions were funded from debt that led to interest costs of $1.67 million, with term debt increased to $52.98 million or 28% of assets.

Expansion and refurbishment of existing properties totalling $2.07 million had created additional revenue of $343,000, including the $1.65 million expansion of the Fletcher Aluminium buildings on Bowden Rd, Mt Wellington.

Total dividend return to shareholders for the six months June 30 was 2.6c a share with imputation credits of 0.6c a share.

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