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Daily ShareChat: AMP NZ Office Trust

By Jenny Ruth

Friday 12th February 2010

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 Jenny Ruth

Forsyth Barr analyst Jeremy Simpson says he has taken a more cautious outlook on AMP NZ Office Trust's near-term earnings and tax issues aren't helping.

The AMP trust "has flagged that dividend growth in 2011 could be impacted by the timing of the leasing up of 21 Queen Street, overall portfolio occupancy and any adverse impact from possible tax changes," Simpson says.

The trust "has indicated a worst-case scenario of an 8% to 10% hit to distributions, should depeciation on a building's shell be abolished. This assumes no partially offsetting benefit of a lower company tax rate."

As a result, Simpson has cut his 2011 and 2012 earnings forecasts by 5% and 7% respectively, although his 2010 forecast of a $61.7 million normalised net profit remains unchanged.

He has cut his cash dividend forecasts for 2011 and 2012 by 5% to 5.9 cents per unit and 6.1 cents per unit respectively and cut his valuation from 99 cents per unit to 93 cents.

"We expect property valuations to weaken further over the next 12 to 18 months as lower market rents continue to impact, but at a slower rate than we have seen over the last 18 months."


BROKER CALL:  Forsyth Barr rate AMP NZ Office Trust as accumulate.


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