Archive | AMP Property Portfolio

Published 24 December 2007

Additional information from Stockland 27 December 2007

3 Auckland shopping centres will return to full New Zealand AMP ownership after 5 years.

AMP Capital Investors (NZ) Ltd sold 50% of the Botany Town Centre, LynnMall & the Manukau Supa Centa to the ASX-listed AMP Diversified Property Trust in 2002 for $188.1 million. AMP Diversified bought 50% of Botany for $98.3 million, Lynmall $65.2 million & Manukau $24.6 million.

After AMP’s diversified & shopping centre trusts came under attack from every other major listed property trust in Australia in 2003, Westfield Group took out the shopping centre trust and Stockland won control of the diversified trust, including the New Zealand interests.

AMP Capital Investors said today it had entered into conditional agreements for the AMP Property Portfolio to acquire Stockland’s 3 50% interests, currently owned by Trust Co Ltd for Stockland, for $368 million. The purchase is conditional on the approval of the Overseas Investment Office.

Settlement is scheduled to occur in 3 tranches on 31 March 2008, 30 April 2008 & 30 May 2008.

AMP Property Portfolio general manager Stephen Costley said the acquisition was part of a strategy to reweight the portfolio following the takeover of Capital Properties NZ Ltd in 2006. “The acquisition will move the diversified AMP Property Portfolio closer to its long-term sector benchmarks for retail & office properties.”

AMP Capital developed & opened Botany Town Centre in 2001. The 56,230m² centre is anchored by a Farmers department store & New World supermarket. Berkeley opened an 8-screen cinema complex in 2004. Consents have been obtained for 5500m² more retail space.

Mr Costley said AMP hoped to receive the last consent to add a further 400 parking spaces early in the new year, allowing the project to start mid-2008. The project, providing space for about 30 new retailers, is likely to be completed in 2 stages, concluding in the second quarter of 2009.

The AMP Society developed LynnMall in 1963. It’s been refurbished & expanded over time and is now 30,236m². It’s anchored by a Farmers department store & a Foodtown supermarket.

Jonmer Projects Ltd completed the 33,800m² large-format Manukau Supa Centa in 1998.

Additional information from Stockland

Stockland Retail chief executive John Schroder said in the company’s 24 December release it made the sale “as it looks at reinvestment opportunities in key strategic growth areas in Australia & the UK…. Demand for retail assets and the resulting cap rate compression meant that it was timely for us to pursue the sale of our interest in these centres and capitalise on other value-adding opportunities in the market to deliver improved future returns….

“The sale of our interest in these centres represents a total blended yield of 5.9% and has delivered a strong premium to book value.”

The New Zealand assets represented just over 7% of Stockland’s $A4.3 billion portfolio. Their book value in June was $A302 million and the sale price in $A was $322 million, giving a 6.6% premium on the value 6 months earlier.

Property details at Stockland’s June 2007 balance date, with book value & acquisition cost (including additions) given for Stockland’s 50%:

Botany:

Book value $A173.7 millionCost $A98.5 millionValuation at June 2007 $A3086/m²Annual sales $NZ270.7 million4.1% of Stockland’s retail portfolioCap rate 6%Discount rate 9%Gross lettable area 56,287m²

Lynmall:

Book value $A87.5 millionCost $A57.3 millionValuation $A2889/m²Annual sales $NZ196.9 million2% of portfolioCap rate 7%Discount rate 9.25%Gross lettable area 30,292m²

Manukau:

Book value $A40.8 millionCost $A27.7 millionValuation $A1208/m²Annual sales figure not given1% of portfolioCap rate 7.38%Discount rate 9.38%Gross lettable area 33,768m²

Earlier stories:

29 May 2003: Stockland launches full bid for AMP Diversified

29 May 2003: Westfield does the deals to carve up AMP Shopping Centre Trust

29 May 2003: “Impact not material,” says AMP

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Attribution: Company releases, story written by Bob Dey for this website.

Published 17 April 2007

The Australian AMP Shopping Centre Fund has bought The Palms shopping centre in Christchurch, its second acquisition in New Zealand.

The fund, run by the Sydney-based AMP Capital Investors Ltd, entered the New Zealand market last September when it bought 50% of the Bayfair shopping centre in Mt Maunganui from Tower Asset Management for $121.5 million, on a yield a shade under 5%.

It hasn’t disclosed the price for The Palms, built in New Brighton in 1996 and sold by Sabina Ltd, a joint venture between Max & Glen Percasky and the family interests of Tim Glasson of Hallenstein Glasson Holdings Ltd. Settlement is due at the end of May, subject to Overseas Investment Office approval.

The Australian AMP fund has 10 properties worth $1.8 billion under management. AMP Capital Investors (NZ) Ltd has its own property arm, which has management & 50% ownership (with the Stockland Trust of Australia) of 3 major Auckland retail properties, the Botany Town Centre, Lynmall & Manukau Supa Centa.

The Palms was refurbished & extended in 2001-03 to give it a net lettable area of 33,914m². It has more than 100 retail outlets, a cinema complex & 1450 parking spaces, and won the Property Council’s retail category excellence award in 2004, the year after Bayfair had scooped the council’s supreme award.

AMP Shopping Centre Fund fund manager Conrad Sinclair was very pleased to add another New Zealand property to the portfolio: “Overall (New Zealand) growth in quarterly retail sales has averaged 1.5% over the last 5 years compared to 1.1% in Australia,” he said.

Earlier story:

8 September 2006: AMP of Australia buys Bayfair on 5% yield

2 May 2004: Newcrest collects Property Council supreme award (The Palms also collected an award)

8 June 2003: Bayfair wins Property Council’s supreme award

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Attribution: Company release, story written by Bob Dey for this website.

Published 7 September 2006

Tower Asset Management has sold 50% of the Bayfair shopping centre in Mt Maunganui – plus management rights – to AMP Capital Investors Ltd of Australia for $121.5 million, on a yield a shade under 5%.

The yield is significant in comparative terms for a market where this kind of offering is very rare, but the AMP investment arm is more concerned with total returns.

The New Zealand division of AMP Capital Investors was specifically excluded from participating in the Tower tender because it’s the other major (& bigger) local unlisted fund.

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Attribution: Conversations, story written by Bob Dey for this website.

$188 million sale at average 8.7% yield

The AMP NZ Property Fund has agreed the sale of a half-interest in 3 shopping centres — Lynmall, Botany town centre and the Manukau Supa Centa — to the Australian AMP Diversified Property Trust for a total $188.125 million, on an overall 8.7% yield.

The sale & purchase can be justified by both sides — in New Zealand on the basis of reweighting plus a good price, in Australia by the weaker yields and a payment helped by a lower cost of capital.

Sale of Lynmall for $65.2 million is the first stage, dependent only on financing. The second stage, the other 2 sales, requires approval of the Australian trust’s unitholders.

AMP Diversified will buy 50% of Botany for $98.3 million and 50% of the first Supa Centa for $24.6 million.

The transactions will take New Zealand assets from zero to 9.2% of the Australian trust’s $A1.8 billion of assets, ahead of South Australia and Victoria, and will increase the Australian trust’s retail weighting by 5 points to 47.8%.

The New Zealand fund, on the other hand, has 60% allocated to retail property and will get down to the preferred 40% weighting through this deal.

“We will utilise the proceeds from the sale to retire debt & position ourselves for future opportunities,” Anthony Beverley, had of property for fund manager AMP Henderson Global Investors NZ Ltd, said.

He would like to increase the fund’s industrial property weighting — from 7% now, 10% if all 3 sales go through, to 15% and possibly beyond that.