Trans Tasman sells buildings to free up $80m for development

By Chris Hutching

Friday 17th May 2002

SALE CONFIRMED: Forsyth Barr Hse in Christchurch

Trans Tasman Properties has sold more properties in Wellington and Christchurch as it frees up cash for new developments on sites such as the Auckland's Viaduct Basin area.

It has sold four Wellington properties to Talavera Property, including Telecom Tower at 27 Manners Mall, Tourism & Travel Hse at 73-79 Boulcott St, the Ministry of Education building at 33 Bowen St, and 110 Featherston St.

The price was $85 million (against a book value of $86.8 million) but the net proceeds after costs are $80 million, satisfied with $70 million cash and a vendor advance of $10 million over a four-year term.

Trans Tasman also confirmed the unconditional sale of Forsyth Barr Hse in Christchurch overlooking Victoria Sq for a price understood to be just under $20 million at about book value. The building was bought for $39 million by Trans Tasman Properties (formerly Robt Jones Investments) from developer Paynter Corporation in 1989. Settlement is due in about six weeks.

Colliers International director Hamish Doig said the building had been sold to a syndicate of investors in $500,000 lots.

The offer had been organised by Brian Gillman in response to demand for such investments by sophisticated investors accustomed to them. The offer was for shares in a single-asset property company, including a portion of debt in each syndicate.

Mr Doig said a tenant risk assessment concluded minimal risk. He acknowledged that head rentals in the building are considerably higher than current market rates but questioned where rentals would be in two years given the buoyant market. Just one of the 20 floors was vacant, Mr Doig said. The vacancy rate of the four top-tier office towers in Christchurch is just over 5%.

Trans Tasman has sold nine New Zealand properties, gleaning $144 million this year. The company's debt ratio on an equity basis (debt excluding issued bonds to total assets) will be 29.7%.

Including the bonds of $41 million, total debt will be 37.3% of assets.

The company said the sales would allow it to become more active in property development and investment.

A shareholders' meeting is due be held in Wellington on Monday.

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