AMP trust seeking $30 million

Rob Lang

AMP NZ Office Trust (Anzo) went to the market yesterday to raise more money to strengthen its position in the premium office property field.

The listed property trust began a placement to local and overseas institutional investors and hopes to raise about $30 million.

Anzo executive manager Rob Lang said the money would be used "to pursue a range of potential investment opportunities within the New Zealand office market".

The placement of 34.5 million units at a minimum of 87c each is equal to 6.5 per cent of pre-placement units on issue, factoring in the mandatory convertible notes issued in July.

Anzo units closed at 93c on Monday and were placed in a trading halt yesterday morning before the market opened.

They are expected to resume trading today.

The trust has forecast its distribution to unitholders will increase by 1.4 per cent to 7.3 cents a unit in the June 2005 year.

Anzo raised about $95 million in its July notes issue, using the proceeds to fund the purchase of Wellington's Mobil on the Park and the State Insurance Tower buildings.

Lang said the trust's investments this year had successfully "bedded down" and Anzo was now looking to strengthen its position in the market with more purchases early next year.

"We expect the invested funds to be accretive to earnings for the 2006 financial year and beyond," he said.

Anzo owns 10 New Zealand office buildings with a total value of about $766 million, including Auckland's PricewaterhouseCoopers Tower, ANZ Centre, IAG House and Quay Tower; and Wellington's State Insurance Tower, Mobil on the Park, HP Tower, 125 The Terrace, No 1 and 3 The Terrace and Pastoral House.

The trust is managed by AMP Multiplex Management.

"The listed property sector overall has performed well this year and that growth looks set to continue in 2005," Lang said.

"CBD office fundamentals remain firm with high occupancy rates and strong tenancy covenants backed by long-term leases."

The firm market meant there was further potential to increase rents.

While the trust's senior debt-to-assets ratio would be reduced immediately after the capital raising, "that gearing will return to previous levels once the funds are invested".

The trust also plans to implement a unit purchase plan of $5000 per unitholder, which will be offered in the first quarter of the new year at the lower of either the placement price or the prevailing market value of the units.

This would allow Anzo's unitholders to participate in capital-raising.

- NZPA