KEY POINTS:
Rising rental income has helped the AMP NZ Office Trust (ANZO) lift full year operating profit after current tax 27 per cent to $52.2 million.
ANZO chief executive Robert Lang said ANZO's rentals for the year to June 30 were 12.3 per cent higher than the previous year, at $120.3m.
That reflected contributions from ANZO's acquisitions of recent years, as well as higher rents following rent reviews and higher average occupancy.
"New Zealand's prime office sector is showing strong resilience in a number of important ways, and in the face of a worldwide economic slowdown, New Zealand is a standout performer among global office markets right now," Lang said today.
The trust is New Zealand's largest listed investor in commercial office property and owns buildings such as Auckland's ANZ Centre and the waterfront PricewaterhouseCoopers building. It values its portfolio at more than $1.5 billion.
ANZO unit-holders are now due to receive a fourth-quarter net distribution of 2.045cpu, plus imputation credits of 0.139cpu.
As previously signalled, the 2008 full-year gross distribution was 8.385 cents per unit - 8 per cent higher than in 2007 - and was ANZO's highest-ever gross distribution derived from operating earnings.
The combination of the beneficial Portfolio Investment Entity (PIE) tax regime and higher distributions meant ANZO unit-holders resident in New Zealand and paying tax at a rate of 33 per cent received a 46.4 per cent increase in "cash-in-the-hand" distributions in 2008, said Lang.
Unit-holders in the 39 per cent tax bracket had seen their net cash distributions grow by more than 60 per cent.
Lang said the resilience of the prime office sector, combined with the high-quality characteristics of ANZO's portfolio, allowed the trust to project a minimum year-on-year growth rate of 4 per cent in the gross distribution for this financial year to June 2009.
The independent valuation of ANZO's portfolio, increased $118.1m, or 8.14 per cent, during the year, driven entirely by rental growth. At the end of June the value of the trust's investment portfolio was $1.57 billion.
Total direct expenses for the year were up 14.1 per cent to $32m, while indirect expenses fell 19.1 per cent, mainly due to the conversion of ANZO's interest-bearing mandatory convertible notes at the end of the previous financial year.
ANZO's units closed at $1.06 yesterday, 3c above last month's year low and down from the year high of $1.35 last October.
- NZPA
