KEY POINTS:
The National Property Trust (NPT) is reporting a net profit of $18.4 million for the 10 months to the end of March, including $10.9m of revaluation gains.
The 10-month period resulted from a change in NPT's balance date, from the end of May to the end of March.
Net rental income of $18.9m reflected solid operational performance, and the contribution from the Heinz Wattie's warehouse in Hastings and disposal of the Dunedin Multiplex and CSI Logical House in Wellington, NPT said today.
Improved rentals offset a significantly higher interest expense of $8.6m for the period.
National Property Trust general manager John Crone said it had focused on operational efficiency and enhancing value in the portfolio.
Rental gains had been made and there was still further capacity for rental growth and value enhancement, he said.
Valuation gains of $10.9m in investment properties were due to good rental gains despite softer yields.
In the current climate, it was expected that valuation growth would continue to ease, Mr Crone said.
The trust confirmed the distribution for the final quarter to March 31 at 1.76 cents per unit. That took the dividend distribution payment for the 10-month period to 4.16 cpu.
When annualised, that was is in line with the manager's expectations of 5 cpu for a full year, NPT said.
It was anticipated that dividend distributions for the coming year would remain at the current level.
Most properties were performing in line with trading forecasts, NPT said.
While vacancy rates had increased to 2.9 per cent of total leaseable area, compared to 1.2 per cent at the end of May 2007, virtually all the additional vacancy was planned to facilitate refurbishments at two retail centres - in Tauranga and Napier.
A high proportion of the new retail space had been pre-leased and the balance remaining at those centres was expected to fill quickly when the projects were finished, NPT said.
The manager's aim was to reduce NPT debt levels of 42 per cent of total assets to the 30 to 35 per cent range by selling non-strategic assets.
The sale of Wellington's CSI Logical House in January for $13.5m and the use of those funds to reduce debt has resulted in the trust's total debt being just over 35 per cent of total assets.
Mr Crone said that over the medium term a further balancing of the mix of property types across the portfolio would be considered.
"We also expect to maintain our focus on managing and enhancing quality mid-tier properties that may not necessarily be considered prime, but will nevertheless remain attractive to a wider range of potential tenants as a result of good location and fair rentals."
NPT units were unchanged at 49c around lunchtime, near the year low of 48c hit this month, after having been up to 80c last June.
- NZPA
