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AMP NZ Office nine-month revenue slips 2.2%

Thursday 21st April 2011

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Listed commercial property investor AMP NZ Office (Anzo) reported a 2.2% fall in nine-month revenue to $102.5 million, while lifting occupancy to 94% from 90%.

The key achievement for the latest quarter, to March 31, was the retention of ANZ at the ANZ Centre in Auckland, Anzo said today.

ANZ agreed to a new 15-year lease from the start of 2014 and would occupy 17,700sq m of the building, becoming Anzo's largest customer.

Anzo would carry out an estimated $76 million redevelopment of the ANZ Centre, repositioning it as one of Auckland's premier office towers.

Anzo chief executive Scott Pritchard said the company was seeing increased stability in the Auckland CBD market across all its assets, while its Wellington portfolio continued to outperform due to its A grade quality and strong customer covenants.

Anzo said its after tax distributable profit for the third quarter was $14.9 million and for the nine months was $46 million.

Net finance expense for the nine months was up 5.5% from a year earlier to $16.2 million, reflecting interest costs associated with Zurich House, in Auckland's Queen St, being capitalised in the previous corresponding period.

Administrative expenses were down 17.5% to $5.9m, largely due to lower management fees payable under Anzo's new management fee structure, Anzo said.

Anzo shareholders' returns for the quarter outperformed its peer group, with a total return of 7.885% compared with the benchmark return under the management contract of 1.335%. As a result the manager would be paid a performance fee of $950,000.

The net profit after tax of $41.4 million compared with a loss for the previous corresponding period, which included an interim portfolio revaluation, resulting in an unrealised decline in portfolio value. No interim portfolio revaluation has been carried out this year.

Net profit for the nine months compared to a loss a year earlier when the result included an interim portfolio revaluation which had resulted in an unrealised fall in portfolio value. No interim portfolio revaluation was carried out this year.

Since June 30, 42 new leases and 12 lease renewals had been secured, reflecting more than 56,000sq m of net lettable space and $20.3 million of annualised rents.

Anzo also said the latest quarter was the last for which it would provide supplementary financial reports. It would continue to release annual and half year financial results, and would provide a quarterly business update to investors.



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