Property for Industry posts full-year loss on property valuation

Monday 23rd February 2009

Property for Industry, the investment group managed by AMP Capital Investors, posted a full-year net loss after lowering the value of its portfolio by 10%.

The net loss was $31.9 million in 2008, from a profit of $44.5 million in 2007, the company said in a statement. Property for Industry held its fourth-quarter dividend unchanged from a year earlier at 2.425 cents a share, bringing total payments for the year to 7.18 cents, up 1.1% from 2007.

For the current year, the focus will be on retaining high occupancy levels, general manager Ross Blackmore said. The occupancy rate was 99.4% at the end of 2008, with a weighted average lease term of 4.6 years. Property for Industry's distributable profit rose 5.3% to $15.7 million, reflecting a 5.2% increase in rentals to $32.5 million.

The value of the property portfolio was reduced by $43 million following an assessment by DTZ, Jones Lang LaSalle and CB Richard Ellis.

Blackmore said the reduction was "an unfortunate but inevitable consequence of current global economic conditions."

The company's debt to total assets ratio was little changed at 28.9% from 28.6%. Last year, property for Industry renewed its $120 million banking facility with Bank of New Zealand until late 2011.

Blackmore said that rapidly-falling interest rates had sparked a resurgence of investor interest in well-leased industrial property since the end of 2008.

Shares of the company fell 1 cent to $1.11 on Friday and are down 13% in the past 12 months, less than half the decline of the NZX 50 Index.

By Jonathan Underhill

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