Earnings reflect portfolio

By Chris Hutching

Friday 31st May 2002

Colonial First State Property Trust's higher annual result posted this week reflects the trust's larger earnings portfolio from the acquisition of Greenlane's Millennium Centre last year for $42.6 million, which provided an extra $700,000 in rental income.

Trust general manager Lloyd Cundy announced a net surplus of $14.9 million after revaluations for the year ended March 2002, up 15% on last year's $12.9 million after-tax profit. Income was $25.4 million compared to last year's $22.3 million.

The result also reflected favourable rent reviews and a full year of revenue from Panasonic House, which was bought in July 2000. Perhaps most importantly for unitholders was the steady quarterly dividend equating to a dividend yield for the year of 10.55%.

Colonial Property Trust has come into favour recently with units trading at $1.07 this week  ahead of the net tangible asset backing of 99.29c a unit. The units have traded at a premium since the middle of last year after previously trading at a discount.

As well as buying the Millennium Centre last August 2001, the trust signed an unconditional sale contract for the Sovereign Centre in Wellington in February for $16.85 million, which may reduce the higher debt of around 40% incurred from the Millennium purchase.

The portfolio is valued at $252 million, compared with $207 million last reporting period, reflecting the Millennium buy. The trust's buildings are virtually fully tenanted.

The Colonial First State Property Trust gave a total pre-tax return of 14.4% for the year to 31 March 2002 compared with a 14.1% gross return achieved by the NZSE Property Share Index and a 7.8% gross return achieved by the NZSE 40. "The New Zealand listed property market looks set to continue benefiting from vulnerable sharemarkets and a relatively low interest rate environment in 2002," Mr Cundy said.

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