National Property Trust signs up for sale of Hornby Mall

Friday 24th August 2001

Paul Dallimore

By Chris Hutching

National Property Trust is understood to have signed a contract for the sale of Hornby Mall, which will pave the way for funding its redevelopment of Eastgate Shopping Centre in Christchurch.

The contract is subject to strict confidentiality and there are conditions attached, which have yet to be fulfilled.

The asking price for the mall was $24 million when it was being marketed by C B Richard Ellis recently and if the sale is achieved at around this level it will substantially pay for the expansion of Eastgate, budgeted at $29 million.

Resource consents for the expansion are expected in the next week or two and construction work is scheduled for late October.

This means Eastgate will be one of the first malls to start its expansion plans in Christchurch. Expansion work at rival shopping centre The Palms began last week.

The owners of Christchurch's other main malls have also announced expansion plans but it may be two or three years before work is completed. Westfield recently announced plans for an $80 million expansion at Riccarton Mall and Kiwi Income Property Trust plans to spend $90 million expanding Northlands Shopping Centre.

National Property Trust chairman Paul Dallimore said Eastgate would expand its catchment and he rejected the notion the city was "over- shopped." Traffic flows at Eastgate were also superior to some of the other locations, he said.

Last week National Property Trust reported its latest result for the year ending May 31, 2001, including highlights of the previous 12 months such as the acquisition of Southway Properties, former owner of Eastgate and Hornby malls.

This acquisition boosted the level of total assets by $46.2 million to $111,091,595 and lifted net tangible asset backing to 98c a share on higher issued capital of 54,388,326 shares. Part of the lift was attributable to $4.4 million in revaluations. The Southway acquisition means 42% of the portfolio is comprised of retail assets, 45% commercial office properties, 6% industrial, 3% development and 4% entertainment.

NPT was particularly successful in leasing its commercial properties with 35% of the portfolio up for renewal during the year resulting in the weighted average lease terms being extended to 4.5 years. The net surplus after tax rose 8.8% to $3.3 million with total dividends for the year 7.88c a share.

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