Listed Property Trusts

[nelehdine]

HC, ... I doubt their portfolio would be of the quality of APT and KIP ( both currently trading at discount to NAV )... unless they are selling you the properties at say a 7-8% discount to registered valuation why would you bother ?

Before you subscribe check the following;

Registered vals and NAV
Under or over rented portfolio
WALT
Mgmt fees
Int Rate hedging / risk profile

[Caesius]

[quote]quote:AMP NZ Office Trust announces Wellington acquisition and higher investor returns

New Zealand's largest listed investor in prime commercial office property, AMP NZ Office Trust (ANZO), has announced the $39.5 million acquisition of Wellington's AXA Centre, in combination with a private placement of new units, a unit purchase plan and an increase in future investor returns on the back of continued strong portfolio performance and outlook.
ANZO executive manager Rob Lang, said the AXA Centre was acquired in a keenly-contested international tender process involving nine bidders. "This high level of interest is indicative of the demand for investment-grade assets and should underpin strong valuation growth leading into ANZO's annual portfolio revaluation in June 2007."
Mr Lang said the A-grade AXA Centre, located on The Terrace, is 100 percent occupied by institutional and quasi government organisations, increasing ANZO's exposure to government tenants and to the top-performing Wellington market. Following the acquisition, Wellington properties will make up 48.8 percent of ANZO's portfolio value, with government sector tenant exposure rising to 24 percent of the portfolio.
ANZO estimates the AXA Centre is 19.4 percent under-rented, providing strong rental growth prospects, as well as synergies with ANZO's existing portfolio. "We're very confident of achieving substantial savings in operating costs, as we have done with other Wellington acquisitions in recent years," said Mr Lang.
The weighted average lease term of 3.7 years is an advantage, improving ANZO's ability to quickly capitalise on these opportunities, and Mr Lang said the AXA Centre's initial twelve month rolling yield of 7.14 percent is expected to rise to 9 percent over the next three years.
"Market rents for premium and A-grade office space continue to increase, and ANZO's portfolio is now approximately 7.1 percent under-rented, positioning ANZO strongly for rental growth across the portfolio," said Mr Lang. "This is already delivering encouraging results ?- in the first five months of the current financial year, ANZO has completed 19 rent reviews over 15,700 sqm of net lettable area, recording an average increase in contract rents of 22.5 percent over the three-year review periods.
"A further 45 rent reviews over an area of 39,600sqm are scheduled during the balance of the 2007 financial year [to 30 June 2007], and in the following year, ANZO has 49 rent reviews over 63,300 sqm scheduled."
Mr Lang said ANZO's continued growth momentum from within the portfolio and growth expectations arising from the AXA Centre acquisition have allowed a lift in projected investor distributions, for both the current financial year and the future. The projected distribution for the financial year to June 30, 2007 is now 7.76 cents per unit, up from the previously-indicated 7.63 cents per unit, representing a 4 percent increase over the 2006 financial year. This increase is intended to be spread over the third- and fourth-quarter distribution payments.
"In addition, our expected minimum year-on-year growth in ANZO's distributions beyond FY2007 has increased to 2.5 percent from 2.25 percent," Mr Lang said.
"The board continues to monitor ANZO's performance and a similar upward review of distributions is certainly possible."
Mr Lang noted that the office premises of ANZO's seven existing Wellington properties are fully occupied and continue to enjoy strong tenant enquiry and demand. Overall, ANZO's portfolio occupancy stands at 99.3 percent.
ANZO has today launched an institutional unit placement of $40 million - the proceeds will be used to fund the acquisition of the AXA Centre. A trading halt has been requested while an institutional book-build takes place. The placement is being managed by First NZ Capital.
Following the placement, ANZO's balance sheet will be in a stronger position from which to grow the portfolio and further enhance unit-holde

[Flying Goat]

Does anyone know why ING Property Trust is getting dumped right now? Two undisclosed sells and as of today trading below NTA. Hmmm, might be time to look at buying a few. Not too sure about the management team though. Any thoughts?

FG

[Lawso]

Huge volumes going through in this sector. Yesterday: 6.9m KIP, 5.5m MGP, 1.1m PFI.
Today so far: 2.9m MGP, 857k KIP.

What's going on? Some big buyers obviously. Cullen Fund? ACC? Instos? Anybody know who's buying/selling and why?

[nelehdine]

Some pretty bullish figures in amongst the APT announcement of their latest purchase. It appears these companies are having no trouble pushing thru some pretty healthy rent rises. A-grade Office space in particular seems in very strong demand ... look at the rent rises APT have just received ... extrapolate that over the whole portfolio and you soon realise that the NAV has lots of potential to increase over the next few years. These companies also have plenty of well priced interest rate hedging on their books at rates which are substantially lower than current rates, there asset quality in absolutely top notch ... APT in particular and KIP and PFI have awesome portfolios of properties ... irreplacable really in NZ's tight market. So in summary

Awesome portfolio's of the best in NZ commercial property
Rent reviews to deliver large revenue increases
Under-renting throughout portfolios
Cap rates at attractive levels vs overseas markets
Interest rate cycle at or near peak
Lots of hidden value in their interest hedging positions
Most trading at or even below NAV

Disc: I am heavily invested in the LPT sector ... largest holding 106,656 AMP Office Trust

[Lawso]

Awesome, neleh. I only have a lousy $160k in the sector - mainly MGP, PFI, St Laurence notes.

[Lawso]

Latest volume: MGP 3.6 million, KIP 2.8 million. Good analysis, neleh, but I'd still love to know who's doing all the trading.

[Caesius]

APT 4.9m

[Flying Goat]

quote:Originally posted by Caesius

APT 4.9m

"Listed property companies strengthened on the back of tax changes which would create a "level playing field" for all types of investment."

In answer to my own question above (which clearly noone else knows the answer to) i assume there was some uncertainty around the tax changes as they were only announced today. Seems that yesterday's undisclosed sellers of ING turned into undisclosed buyers today. Go figure!?

Just bummed that I missed getting into ING at 1.14 by my calcs it was the only one trading at below book value.

FG

[rmbbrave]

13 Dec 2006 02:39
GENERAL: KIP: Taxation Bill Positive for KIP Investors

The Government has passed the Taxation (Annual Rate, Savings Investment, and
Miscellaneous Provisions) Bill which will change the taxation of investment
income for collective investment vehicles in New Zealand.

The Bill introduces new tax rules for collective investment vehicles that
meet the definition of a portfolio investment entity (PIE). The new rules
treat investment through PIEs in a similar way as direct investment by
individuals, removing taxation disadvantages to saving through
intermediaries, such as Kiwi Income Property Trust. The changes will also
prevent over-taxation of lower-income savers.

The new regime will result in most investors being taxed at their marginal
tax rate on the taxable income derived by the Trust. This means that any
capital gains derived by the Trust and the benefit of tax allowances will
effectively pass through to most investors. This compares to the current
regime whereby investors are taxed on all income distributed by the Trust.

Our understanding is that Kiwi Income Property Trust will qualify as a PIE,
with the new regime taking effect from 1 October 2007. That being the case,
the change will have a beneficial impact on domestic investors'' after-tax
returns, with the scale of the benefit determined by individual
circumstances.

The Trust acknowledges the collaborative approach of the Property Council of
New Zealand, listed property entities, Government Officials and the Finance
and Expenditure Select Committee.