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Daily ShareChat: National Property Trust

By Jenny Ruth

Tuesday 11th May 2010

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 Jenny Ruth

The 4.8% fall in the valuation of National Property Trust's properties in the 12 months ended March is in line with expectations, says Forsyth Barr analyst Jeremy Simpson.

He estimates that cuts net tangible assets per unit from 82 cents to 72 cents.

"National has indicated that cap rates have stabilised, which is positive," Simpson says. "However, valuations have been adversely impacted by softer market rents."

While the Auckland and Wellington CBD office outlook remains soft due to falling market rents, National has only limited exposure to these markets. National's key asset is the Eastgate Shopping Centre in Christchurch and it owns properties in regional centres including Hastings, Napier and Tauranga.

"While market rents are weaker, National has been able to achieve rental growth with its rent reviews of plus 5%, given underlying growth since previous rent reviews," Simpson says.

The receivership of St Laurence Group, parent company of National's manager, doesn't affect the management company. "However, there is a review of the management contract with regard to either selling the contract to a third party or the management rights being internalised by National's unitholders," Simpson says.

St Laurence interests also own nearly 25% of National. "The availability of the 25% stake, combined with the management contract, could be an attractive package."




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