ANZO lifts earnings 27.2pc

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Property investor AMP NZ Office Trust (ANZO) has posted a 27.2 per cent rise in distributable operating profit to $52.18 million for the year to June.

The company has given an upbeat assessment of its prospects for the forthcoming year, though it has reaffirmed that the rate in growth of distributions to unit holders will slow.

ANZO chief executive Robert Lang said that as previously signalled ANZO would have a full-year distribution to unit holders for the year just gone of 8.385 cents a unit, which is an increase of 8 per cent on the distribution of a year ago.

He said that the company was still forecasting an increase in distribution of 4 per cent for the coming year. "Again, this would rank among the very best growth available in the sector."

"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," he said.

Mr Lang said ANZO's rentals for the 12 months to 30 June 2008 were 12.3 per cent higher than the previous year, at $120.27 million. This reflected the contributions from ANZO's acquisitions of recent years, as well as higher rents following rent reviews and higher average occupancy.

While total direct expenses for the year were up 14.1 per cent to $31.96 million, indirect expenses for the year reduced by 19.1 per cent, primarily due to the conversion of ANZO's interest-bearing mandatory convertible notes at the end of the previous financial year.

Mr Lang said the outlook for ANZO and its investors was positive. Rent reviews would be a key source of earnings and distributions growth in the current year, with under-renting at 12.2 per cent and more than 125,500 sq m or 50 per cent of the portfolio subject to upward rent reviews.

"ANZO's clear and transparent strategy has underpinned its past performance and will continue to be the foundation of its future. New Zealand's prime office market conditions remain favourable - despite the economic slowdown, market vacancy rates are maintaining their historical low levels, and near-term supply risks are also low," he said.

"To date, "corporate New Zealand" is standing up well to the slowdown and central business district employment figures remain relatively robust, although ANZO's board and management continue to closely monitor economic and property market conditions."

The company had a $4.1 million "distribution reserve" to cover unplanned events.

Arab-owned Haumi Company, bought 19.9 per cent of ANZO from AMP Capital Investors earlier this year in a $180 million deal.

- © Fairfax NZ News