Waterfront tower precommitment now 78%
AMP NZ Office Trust’s earnings before and after tax fell marginally (0.24%) in the December half to $16.819 million on revenue up 8.74% to $24.8 million.
With no tax and no unusuals, compared to just under $3 million of unusuals in the December 1999 half, the operating surplus before unusuals & tax was 21% higher.
Earnings/share fell 5.8% to 3.48726c, on equity up from $398.4 million to $410 million.
The trust’s executive manager, Rob Lang, described the result as “resilient”. For unitholders, the immediate outcome is a 3.5c/unit unimputed & unchanged distribution.
Net asset backing (fully diluted) has been maintained at 87.2c/unit.
The portfolio has a 97% occupancy rate, and tenant precommitment in the new PricewaterhouseCoopers Tower on the Auckland waterfront exceeds 78%. A tenant with a confidentiality clause in place took the whole of level 28 in December. Vacancy in the 30,000mÂ², $170 million tower is now limited to less than 5 of the 23 office tower floors. The tower is scheduled for opening in May.
Mr Lang said active asset management and a focus on business relationships enabled the trust to improve its operating performance.
High occupancy underpins rent & leasing success
He said the high occupancy underpinned the pleasing results achieved in rent reviews, leasing & lease surrender transactions, which collectively led to an improvement in net office rental income.
Direct office property expenses remained in line with levels reported in the previous interim period, due to a continued focus on expense control.
The trust executed 13 new leases representing 9451mÂ², or 8.3% of the total portfolio’s net lettable area. Of the 9 rent reviews negotiated, 7 resulted in an increase in rents. Due to the presence of ratchet provisions, 2 resulted in no change.
As part of a new income initiative, non-traditional property-related telecommunication licences have been established in all the trust’s buildings.
Cautious optimism about market
Mr Lang said the trust managers were cautiously optimistic about the outlook for 2002. “Vacancy rates in the Auckland and Wellington central business district office markets have reached their lowest levels in over a decade. Wellington’s low vacancy level has led to a paucity of options for tenants seeking premium quality space.
“The trend in Auckland, while not as strong as in Wellington, is nonetheless similar with the available options for tenants seeking premium accommodation declining noticeably. This has improved the outlook for rental growth.”