Stride Property to reap $31.8M from Penrose property, provided it can ensure leases

Tuesday 19th April 2016

Stride Property has conditionally agreed to sell its office building at 650 Great South Road, Penrose for $31.8 million, or 7.8 percent above book value.

The price is conditional on Stride ensuring replacement or additional leases are found in the event any tenants exercise early termination rights, or where short-term leases expire, the Auckland-based company formerly known as DNZ Property Fund said in a statement. If all the costs related to those commitments were incurred, the net sale proceeds would be about $28.9 million.

Chief executive Peter Alexander said the sale was "part of Stride’s ongoing strategy to divest non-core assets to fund new development and acquisition”.

The sale would go unconditional on June 3, with settlement expected on June 15, the company said.

Stride shares last traded at $2.26 and have gained 17 percent in the past 12 months, almost matching the NZX 50 Index's gain.

“The listed property sector has been very interesting over the last few years . It has generally given investors solid and growing cash flows and it has also benefited from increasing values particularly in Auckland. The sector generally trades above Net Asset Value and has an average yield of 4.52 percent. Listed property companies include passive managers, specialised owners e.g. Industrial property specialists ,Retirement Village owners and Balanced portfolio property managers. There is no reason to believe the sector will not continue the solid performance . The recent addition of the Chow Group (CGL) to the sector has increased the market interest. “ said Mr. Kevin Dutta- Gupta General Manager Research at Investment Research Group Ltd.

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