National Property Trust to raise $35m

The National Property Trust (NPT) said today it intended to proceed with plans to strengthen its capital by seeking to raise $35 million through a convertible unit offer.

The offer, likely to be made in May, will be on a pro-rata basis to existing NPT unitholders.

Details of the offer are being finalised and will be released in the next four weeks.

As a precursor to the issue, St Laurence Holdings, which recently took over the manager of NPT, sought an updated valuation of NPT's property portfolio as at February by the same independent valuers who assessed the portfolio as at May last year.

The 2006 valuation updates by Jones Lang LaSalle and Fright Aubrey show that values of NPT's commercial and industrial properties have improved slightly. However there have been material changes to values in the retail portfolio, with the end result being an overall unrealised decrease in assessed value across the entire portfolio of $17.5m.

Kevin Podmore, managing director of St Laurence, said the convertible unit offer was necessary to strengthen NPT's capital base.

"St Laurence knew when it took over management of the trust that a full review of the trust's assets and performance needed to be undertaken as due diligence on the trust had been limited to publicly available information," Mr Podmore said.

The capital raising would allow the trust to reduce debt and give it the ability to repay capital notes due in November 2007.

Total property assets (including development properties) as at May 2005 were valued at $261.2m. Since then there has been an additional $9m spent.

Following the February 2006 revaluation, the total property assets fell 6.5 per cent in value to $252.7m.

That has reduced the trust's revaluation reserves and the net asset backing from $1.024 to $0.881c per unit.

The trust units last traded at 80c. They have traded between 75c and $1.00 in the last year.

- NZPA