DNZ Property Fund Limited

IRG

Friday 19th September 2014

During the period 1996 – 2001 DNZ established 32 property syndicates. In 2001, a strategic review of the structure and operations of the funds occurred, with management implementing a plan to restructure various funds to establish three core funds: DNZ Income, the Company (previously DNZ Foundation Property Fund Limited) and DNZ Retail. Restructurings followed to consolidate various syndicates and funds into larger portfolio entities, ultimately leading to the amalgamation of DNZ Income, DNZ Tauranga and DNZ Retail into the Company on 30

September 2008. Since establishment, DNZ has grown to become the owner of a New Zealand diversified property portfolio with $780 million (as at 31 March 2014) of commercial property assets. DNZ also holds management rights to Diversified NZ Property Fund Limited, a $116 million (as at 31 March 2014) commercial property portfolio.

On 16 August 2010 DNZ Property Fund was listed on the NZSX under stock code 'DNZ' for $0.97. DNZ is a Portfolio Investment Entity (PIE) listed on the Main Board equity market of NZX Limited. DNZ is included in the NZX 50 Portfolio, NZX MidCap, NZX All and NZX Property indices.

DNZ reported after tax profit of $41.6 million, a decrease of $4.0 million (8.7%) from the previous year. The prior year results included insurance proceeds of $6.5m relating to Christchurch property. However, DNZ’s operating performance for 2014 financial year was satisfactory which was largely driven by the acquisition of the Silverdale Centre, the completion of the AA Insurance and Hydraulink developments in Penrose, Auckland, and net revenue growth from the remaining portfolio. This was supported by DNZ’s high occupancy rate of over 99.2%, tenant retention and lower net finance costs. Net rental income of $57.4 million was up 7.2% from previous year and operating profit before other income and income tax of $35.0 million was up 11.6% compared to 2013. The NTA value also increased seven cents to $1.69.
The annual independent market valuations at year end resulted in the property portfolio value increasing by a net 2.5%, or $18.7m, valuing DNZ’s property portfolio to $780.2m with a weighted average capitalisation rate across the portfolio of 7.94%.

The Board and Management pointed out that DNZ continues to have a strong balance sheet which has been supported through prudent capital management. This provides a solid base to take advantage of the forecast improving economic environment. Management will continue to look for initiatives to enhance returns to shareholders while remaining focused in the near term on delivering the Westgate mall in October 2015. The Company expects to deliver an annual cash dividend of at least 9.0 cents per share to shareholders for the 2015 financial year.
Read the full report by IRG

Comments from our readers

No comments yet