AMP Office Trust wipes 18% off Queen St development value

Monday 13th July 2009

AMP Office NZ Office Trust, the country's largest listed commercial property investor, reported its completed Queen Street development has been "significantly" affected by the global downturn, with its value slashed 18% in the last three months, amid further losses in the portfolio.

The company's nearly-completed building at 21 Queen St was valued at $71 million, down from the $87 million valuation at March 31. AMP said it expects the value to "improve following the development's completion and it achieving fully leased status."

This comes as the commercial property investor announced a 15% unrealised decline in the trust's portfolio for the year to June 30.

"Valuations are under pressure from the dual impact of capital market illiquidity and weakening rental values," said chief executive Robert Lang in a statement.

"This is a circumstance that ANZO and its investors - along with investors around the world - are obliged to endure while macro-economic conditions remain weak."

The trust's latest revaluation shows its total portfolio has declined to $1.33 billion from $1.57 billion in June last year, but won't affect distributions to shareholders.

The share was unchanged at 71 cents on the NZX 50 index today, having shed more than a quarter of its value in the year-to-date.

Lang said the trust has a "resilient portfolio" with current occupancy around 97%, and said contract rentals are continuing to grow.

The trust said $201 million raised in a rights issue helped bolster its balance sheet, and along with the extension to its bank facilities should help it weather the global slump with "cautious optimism."

Businesswire.co.nz

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