[Updated] AMP NZ Office Trust reports loss on devalued property, underlying profit climbs

Thursday 13th August 2009

AMP NZ Office Trust (ANZO), the country's largest listed investor in commercial office space, reported an annual net loss of $192.8 million as the value of its portfolio shrank amid dwindling demand in the deepest recession for 30 years.

The latest valuation of the trust's portfolio shows it shed some $239 million to $1.33 billion in the three months ended June 30, and has wiped some 15% from the trust's value in the past 12 months. Full-year distributable earnings, the preferred measure used by trusts because it reflects earnings that can be paid out in dividends, rose 13% to $59.2 million, Wellington-based ANZO said in a statement.

"The valuation environment seems likely to continue to come under pressure while macro-economic conditions remain weak," said chief executive Robert Lang. For 2010, "the key focus will be our core business of maintaining the portfolio and improving income from leasing, renewals and rent reviews," he said. Signs of a return in business confidence "are welcome."

Commercial property returns slumped last year as the global economic slump eroded property values and sapped demand for rentals. Property for Industries Ltd., the first company to announce its results on the NZX this season, reported a 1.6% decline in its operating profit. The NZX Property Group Index shed some 13.6% in the past 12 months.

ANZO will pay a net final dividend of 1.333 cents per unit. Revenue in the latest year rose 11% to NZ$133.7 million.

The property trust's balance sheet was strengthened after it raised $201 million in a rights issue in June, reducing debt. Gearing was 20.5% at June 30, well below the trust's bank facility covenant of 40%. Last month, the company secured eight commercial lease renewals in the Wellington and Auckland CBDs for a total of $7.9 million per year.

Businesswire.co.nz

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