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Daily ShareChat: AMP Office Trust

By Jenny Ruth

Thursday 29th April 2010

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 Jenny Ruth

AMP Office Trust's third quarter results were in line with expectations but he is taking a more cautious outlook on the CBD office market, says Forsyth Barr analyst Jeremy Simpson.

"Market vacancy levels continue to build in the office market, in particular in Auckland, and we expect vacancy to continue to get worse over 2010 and 2012," he says.

The trust's $47 million third quarter distributable profit was up 12%, boosted by lower interest costs following last year's capital raising with rent revenues up 4.9% to $105 million as a result of positive rent reviews.

Its reported $17.4 million net loss was after accounting for an unrealised $63.1million fall in its portfolio's valuation.

"Office market valuations remain in decline, although at a lower rate than in the last 18 months," Simpson says. Still, the trust's core portfolio continues to hold up relatively well with vacancy rates below market averages.

"What could be crucial to sentiment is the likely near-term confirmation of a private sale for the recently-built prime office tower at 80 Queen Street," he says.

The trust has made no leasing progress at its 21 Queen Street building over the last quarter and occupancy is only 4.5%. The trust's overall portfolio is 90% occupied with a 4.4-year weighted average lease term.

 

BROKER CALL: accumulate.

 

 

 



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