Daily ShareChat: AMP NZ Office Trust

By Jenny Ruth

Tuesday 18th August 2009

AMP NZ Office Trust's (APT) distributable profit was up 13% to $59.2 million and ahead of expectations because of a one-off lower tax rate, says Jeremy Simpson, an analyst at Forsyth Barr.

"The underlying performance of the portfolio was sound with APT securing a number of lease renewals and rent reviews in the period," Simpson says.

"Like-for-like rental growth of 8.6% reflected APT's ability to capitalise on the under-rented nature of its portfolio." Central business district leases typically have three-yearly rent reviews and APT has been able to catch up with the rental growth achieved in recent years despite the current weak operating environment, he says.

There were 70 rent reviews with an average increase of 25.6% in contract rents. Simpson says 2010 rental revenue will be boosted by about $1.5 million of back rent from 2009 as a result of delays in finalising rent reviews.

Risk factors include negative news about rental levels and rising vacanies in the office market as well as the trust's empty 21 Queen St development.

"However, APT continues to deliver a solid result from its core portfolio," Simpson says.

Following its $201 million capital raising and debt refinancing, APT's gearing has dropped to 18.9% compared with its 40% banking covenant.

BROKER CALL: Forsyth Barr rate AMP NZ Office Trust (NZX: APT ) as accumulate.

Comments from our readers

No comments yet