NPT posts $9.1m loss

Wednesday 25th November 2009

National Property Trust, the property investor part-owned by the St Laurence group, posted a $9.1 million first-half loss in difficult trading conditions that have forced it to reduce its gearing and pay down debt.

The loss amounted to 4.74 cents per unit in the six months ended Sept. 30, compared to a $9.3 million loss, or 4.9 cents per unit, a year earlier. The trust wrote down the fair value of its investment properties by $4.4 million and lost $4.4 million on the sale of some assets.

Since the downturn, National Property has sold retail property in Auckland and Tauranga to reduce its gearing to 22.5% and cut its debt with Bank of New Zealand to $51.5 million from $106 million a year earlier. It also secured a facility of $110 million which will expire on Nov. 30, 2012.

“The strategic focus on debt reduction and rebalancing the portfolio by reducing the trust’s retail exposure has not only strengthened the portfolio, it has also improved the balance sheet considerably over the last two and half years,” said general manager John Crone in a statement. “A further successful initiative was completing the renegotiation of the trust’s debt facility ahead of its scheduled expiry date.”

The shares were unchanged at 47 cents in trading on the NZX, and have surged 34% over the past six months. The NZSE Property Group Index fell 0.3% to 801.58 today, and has climbed 14% in the last six months.

National Property made a distributable profit, which excludes unrealised changes in fair value, of $4.9 million compared to $4.8 million last year, though its rental income fell to $9.9 million from $11 million. The portfolio’s occupancy fell to 95.8% from 96.6%, while its value declined to $196.8 million from $280.8 million after it sold some $66 million worth of property.

Crone said is was “pleasing” to see property values have stabilised over the past six months, though he expects the office rental market will stay “under pressure over the coming 12 to 18 months” and estimates the portfolio is under-rented by 9.8%.

The company said it expects trading conditions to “remain difficult for some time,” joining the chorus of property trusts that say it the sector will lag behind the pick-up in the economy.

Earlier this month Kiwi Income Property Trust, the owner of Auckland’s Sylvia Park shopping centre, boosted its first-half distributable earnings after raising $50 million to bolster its balance sheet while ING Property Trust yesterday announced it improved its underlying earnings in the period and said it sees the sector continuing to show “signs of strain.”

National Property’s manager recommended a 1.125 cents per unit dividend for the quarter ended September 30, taking the half-year distributable earnings to 2.51 cents per unit.

Businesswire.co.nz

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