Property firm shifts HQ to Asia

By ANNE GIBSON

After spending $264.5 million on Hong Kong real estate this year, Trans Tasman Properties head office is moving from Auckland to Singapore in a shift described as reflecting the changing focus of its business.

Trans Tasman, whose shares closed up 1c at 40c yesterday, has sold many local properties and, since March, has been investing heavily in Hong Kong, where it has just signed its fourth deal.

Trans Tasman executive chairman Don Fletcher said yesterday that the board had decided the company's headquarters would be better based in Asia from January 1.

He said Singapore was selected for its proximity to Hong Kong, where most of shareholders' funds were invested, and for its double taxation agreement with New Zealand.

Trans Tasman's majority shareholder, Jesse Lu of SEA Holdings, is based in Hong Kong.

In announcing the move, Fletcher also told of a $34 million purchase of development land at 223-227 Wanchai Rd in Hong Kong where the company is assessing building options. Existing cash reserves and bank debt have been used to fund the purchase of a 445sq m vacant site, bought via tender through Jones Lang LaSalle in Hong Kong. The site would suit a 5200sq m building.

Fletcher and chief financial financial officer Greg Kenward are to move to Singapore where a team of six staff will be based.

"Clearly the New Zealand and Australian market is falling off its high,"Fletcher said. "Fundraising for property investment has dropped in the last few months and signs are there of a cyclical slowdown."

Asian property offered better prospects.

"It seems that we got our timing pretty good," Fletcher said of the Hong Kong buyup.

"More than 50 per cent of our profits for the next three to four years will be from overseas," he said, signalling that the company also wanted Singaporean properties.

But he said Trans Tasman would remain listed on the New Zealand stock exchange and stay registered in New Zealand too.

Executive director Rod Hodge said Auckland staff would leave level 14 of the Dorchester Tower on Shortland St for Alcatel House at 12 Viaduct Harbour Ave.

Fletcher said Trans Tasman would sell the three office blocks and carparks of its Finance Centre buildings in Auckland's CBD on individual titles and would launch an international marketing campaign "in the next few weeks".

First NZ Capital research manager Barry Lindsay said the the rewards of the shift to Singapore were hard to calculate, given that no projections had been made about the return on the Hong Kong development deals.

"This move might distance [the shareholders] from their investment because it's quite hard for local shareholders to feel connected to the company when it's offshore."

But he praised the company's commitment to the strategy to shift and said the move was a big change.

Shareholder Michael Connor of Epsom said the Singapore move made little difference to him and he again called for minority shareholders to be bought out at a reasonable price.

Hong Kong plays

In March, Trans Tasman paid $7.5 million for Hong Kong's Excelsior Plaza, a retail property in the Causeway Bay precinct.

In June, it spent $112 million on a 2ha development site in Sha Tin Town in the New Territories. The company will develop the block over four to six years.

In September, it spent $111 million on another Hong Kong development site, this time in Kowloon. Work at the Po Kong Village Rd site is due to start next year and be finished by 2006.

Yesterday, it said it had spent $34 million buying a third Hong Kong development site, this time at 223-227 Wanchai Rd in Wanchai, Hong Kong.