Southern Capital sells Auckland high rise

By Phil Boeyen, ShareChat Business News Editor

Wednesday 1st May 2002

Property and investment company Southern Capital (NZSE: SCL) says it expects to realise an accounting loss of around $1.6 million on the sale of its 19-storey Flight Centre office building in Auckland.

The company has signed a deal to sell the building for $7.8 million. It is the last property to be sold from a portfolio that the company inherited when it merged with CBD New Zealand in 1999.

Southern Capital executive chairman, Graeme Wong, says the sale leaves the company's balance sheet in a solid position.

"The company's market capitalisation of equity is in excess of $53 million and this sale will leave us with a war chest of $4 million cash and no debt.

"We believe that we can do better things with the capital released from this sale, even though it will result in an accounting loss of approximately $1.6 million."

Mr Wong says Southern Capital is not naturally a passive investor in commercial property and has had the 'For Sale' notice on the building for three years.

"The Auckland property market is the most buoyant it has been in that time, while the lease profile of the building has only deteriorated."

Southern Capital has received a $500,000 deposit on the sale and expects settlement next week.

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