KEY POINTS:
Rob Lang
AMP NZ Office Trust
Executive manager
How would you describe last year for the trust?
It's been extremely satisfying for the trust's investors. The total return for the year was 23.7 per cent and that's the yield combined with the capital appreciation of the trust's units which have risen considerably. They were trading at 97c on the NZX back in January this year but by early December they were $1.13. That comes from our achievements and particularly higher rents and occupancy levels, and a good property performance.
What was the greatest achievement?
Completing No 1 and 3 The Terrace in Wellington, now worth $76.1 million. (Fletcher Construction refurbished and extended one existing office buildings and put up a new one alongside.) We made a 24 per cent development margin on those properties which we've now combined to call No 1 The Terrace. The Prime Minister, Helen Clark, opened the project in the winter.
And greatest disappointment?
Not spending more time with the family - put that down. It will make my wife Kate read it. She'll say I was thinking of her. No, I'm far too selfish for that. It's difficult to say, because 2006 was such a good year professionally and personally. Our youngest daughter Merryn was born. She's 5 months old now, so with India [aged 3] we've got two daughters. Maybe the disappointment was not getting out into the bush this year. I would have liked to have gone hunting once or twice for deer, chamois and thar. I did land a 70lb groper off the Kaikoura Coast though. We caught crayfish, scallops, oysters and saw a pod of killer whales in the Marlborough Sounds. They were so close, I could have hopped on one. The dorsal fin was more than 1m long out of the water and five of them were alongside the boat. It was incredible.
What do you think this year will bring?
Well, from a property perspective the dynamics will continue in the same way. They will be strong and favourable for investors in property and the trust because of our strong position; we would see a continuation in the investor returns, distributions and earnings of the trust and no downside for us.
What will be the challenges for the trust?
Finding new land or buildings. Just finding assets which have strong investment criteria. There are opportunities out there that we can buy but they are pretty average. We need to find good opportunities and investments with upside. That might be overlaying our cost-efficient operating model on them to make savings or restructuring a building's lease or refurbishing it. The best example of this is our Pastoral House in Wellington which gave a 43 per cent total return. but those type of opportunities don't fall off trees.
