Capital Properties turns in 13 per cent portfolio gain

Capital Properties has announced a 13 per cent increase in the value of its portfolio in advance of the planned sale of its management rights.

Valuation reports show Capital's portfolio is now worth $485 million - up from the $428 million in March.

The just purchased New Plymouth Centre City Shopping lifts the company's total portfolio value to about $518.5 million and the completion of a defence building in Wellington would will add another $72.5 million in 2007.

Last month, Capital announced plans to sell its management rights. At the time, Capital chief executive Chris Gudgeon said: "The value of the assets is material for anyone looking at the management rights."

But rival Kiwi Income Property Trust, which last month bought 19.9 per cent of Capital, is crying foul over Capital's management rights sale plan.

Kiwi announced yesterday it had applied to the stock exchange for a ruling on the sale, which it said changed the nature of the business and required shareholder approval.

Kiwi chief executive Angus McNaughton said Capital had consistently promoted its internal management structure as a highlight for investors.

"While moving to an external management structure may result in a one-off payment to Capital NZ's shareholders, it is also likely to result in lower future distributions."

He said Capital's plan to sell its management contract "appeared to be a defensive response" to Kiwi's share buying.

- NZPA