NPT eyes Auckland opportunities
Listed property investor NPT is looking to Auckland for future purchasing opportunities to improve its portfolio that was severely impacted by earthquake damage to Christchurch properties.
The company, previously National Property Trust before it was corporatised in April 2011, wants its portfolio to be diversified with strong sustainable earnings after its Christchurch investments were damaged. NPT reported a net loss of $2.3 million in the year to March, an improvement on the previous year's $14.67m loss.
At its annual general meeting in Wellington this morning, chair Sir John Anderson said the loss of anchor tenant department store Farmers in its earthquake-damaged asset Eastgate Mall was "devastating".
Although it has since been certified by CERA as structurally sound, with a seismic rating in excess of the current code following $13.8m of repairs the shopping centre was only 75 per cent occupied. Its car park and 26 retail sites were demolished after the February 2011 earthquake.
It had received $15.7m in insurance payments and break fees charged to Farmers for exiting its lease early meant the mall did not lose rent on the tenancy.
NPT is still unsure what will happen to its Natcoll House property at 195 Hereford St in Christchurch, uninhabitable after the earthquakes. It is receiving business interruption insurance payments for it until February 2013 and is meeting with CERA on Friday to discuss the site.
It is seeking new assets it can add value to by refurbishing or redeveloping, but not in the Canterbury or Wellington areas.
"Definitely at this stage we won't be reinvesting back into Christchurch. We still have an overweighting there so we are looking particularly in Auckland where we are underweight," Sir John said, adding that the board was this month assessing one particular property in Auckland.
"There is a lot of B Grade space in Wellington, and we don't believe the capital would lift on B grade investments with the reduction in the public sector meaning a lot of space in Wellington is becoming available. At the end of the day, the way Auckland is growing with a shortage of property and housing is something we're very conscious of."
The company is forecasting payments of 2.3c net per share for the year ending March 2013. For the first quarter of this financial year it is paying 0.575c net per share on October 5.
Its shares were trading at 59c each this morning.