KEY POINTS:
AMP New Zealand Office Trust said today its operating profit before tax was 12.9 per cent higher in the nine months to March 31 at $30.2 million than a year ago.
Similarly, earnings per unit, based on ANZO's operating profit before tax, were up 8 per cent to 6.08 cents.
The trust said its portfolio had been revalued up by $253m -- double last year's revaluation.
ANZO unit-holders will receive a third-quarter distribution on May 18 of 1.99 cents per unit, 5.85 per cent higher than a year ago.
ANZO upgraded its full year distribution in December to 7.76 cents per unit, up 4 per cent over the 2006 financial year.
It said then the expected minimum year-on-year growth in future distributions had also increased to 2.5 per cent from 2.25 per cent.
At the time, executive manager Robert Lang also noted that a similar increase in distributions in the 2008 financial year was possible.
After-tax returns for ANZO investors are also expected to improve later this year as a result of last year's changes to the investment tax regime.
Rental revenue for the nine months was up 12.2 per cent to $78.6m.
ANZO currently intends to elect to become a portfolio investment entity (PIE) from October 1, and ANZO's investors are expected to see an immediate increase in the net distributions they receive after this election.
The upward revaluation of the portfolio will put ANZO's asset value at an estimated $1.4 billion by June 30.
ANZO's net tangible assets (NTA) per unit are estimated to increase from $1.08 to $1.33 as a result of the revaluation. Adjusted NTA (after excluding deferred tax on revaluation gains) will rise from $1.13 to approximately $1.48.
ANZO units were up 1 cent to $1.39 early this afternoon. They have traded between $1.05 and $1.42 this year.
"The strong performance of the revaluations is a resounding endorsement of ANZO's strategy of focusing on the higher-quality end of the market, which continues to deliver benefits for investors," said Mr Lang.
Significant compression in capitalisation rates was a key driver. ANZO's portfolio weighted average capitalisation rate is now 6.9 per cent, 82 basis points firmer than last year.
Higher rents and occupancy rates saw income rise.
This financial year, ANZO had completed 29 rent reviews over 27,600sqm, recording an average increase in rents of 26.1 per cent over the mostly three-year review periods.
Mr Lang said eight of the 14 properties in the portfolio showed valuation gains of more than 20 per cent, and ANZO's acquisitions and developments had been among the top performers.
ANZO's State Insurance Tower and Vodafone on the Quay, which ANZO bought in mid-2004 for a combined total of $146m, are now together valued at $239m.
The largest individual gain in dollar terms again came from Auckland's PricewaterhouseCoopers Tower, rising $54.6m to $271m.
Following the revaluations ANZO's gearing (bank debt to total assets) as at June 30 is forecast to be approximately 28 per cent.
- NZPA
