AMP Office goes from strength to strength

AMP NZ Office has sold naming rights to 21 Queen St and applied to the council for an upgrade of the ANZ Centre on Albert St. Photo / Dean Purcell

AMP NZ Office has reached a number of milestones, selling naming rights to its big Auckland tower and announcing refurbishment of another.

Chief executive Scott Pritchard said Zurich General Insurance had bought the rights to name 21 Queen St, now called Zurich House. He also announced a $76 million refurbishment of the company's ANZ Centre on Albert St in Auckland.

Shane Solly, of Mint Asset Management, praised the company which owns real estate valued at $1.2 billion but has a market capitalisation on NZX of about $807 million.

"The governance and management changes at ANO appear to be delivering early benefits to investors and tenants. Also the risk to returns from [the] Auckland CBD office has reduced with ANZ not building a new tower," Solly said.

Jeremy Simpson, of Forsyth Barr, said the company's core portfolio continued to hold up relatively well with vacancy rates below market averages.

"APT is significantly improving its governance and fee structure. Our recommendation is accumulate," he said last last year.

Yesterday, he was more optimistic, saying the company's underlying net tangible assets per unit was 93c but it was trading at just 82c.

"We upgraded ANO to a buy in early February as part of our outlook piece for the listed property sector in 2011.

"It is the most heavily discounted of the major listed property vehicles, we like the new management team, prefer prime assets and it has a very strong balance sheet. Office assets are still in decline but we are close to the bottom of the cycle. There is comment that market rents are stabilising in Auckland and the outlook has improved with the retention of ANZ. Wellington office has risk factors with the softer growth outlook and increased insurance premiums, but prime assets and those [close] to the Beehive will be better performers."

Pritchard released a concept image showing Zurich's name on the roof of 21 Queen St and said Zurich would, in late August 2011, bring together all lines of business in three separate sites in Auckland. It has leased 1111sq m.

In a second deal, AMP announced it would spend $76 million on its ANZ Centre, two blocks away from Zurich House.

ANZ has applied to the Auckland Council for its makeover which Prichard said was complying. The changes will offer an alternative entrance to the awkward staircase entry off the footpath up into the revolving doors on the Albert/Swanson St corner.

AMP retained the bank in its Albert St tower and the company, managed by Abu Dhabi interests, has signed the bank on a lucrative 15-year lease, taking 1.7ha of tower floorspace on the Swanson St corner, one block above Queen St. That will see big works around the ground level of the tower to create what the company says will be a substantial new pavilion lobby and entrance as well as new building services on a floor-by-floor basis in the block. The new lobby will be built in what is now an outdoor paved courtyard area.

"That's a pretty dead space at the moment but the changes bring it alive and will allow ANZ critical space for meetings on the ground floor," Pritchard said.

In a third change, AMP said it would move some of its own staff out of its AMP Centre in Auckland and into Zurich House.

Sue Ryan, of AMP in Wellington, said not all staff in various parts of AMP were shifting.

"AMP Capital Investors, which includes AMP NZ Office and Property For Industry with about 30 people in total, is moving from its premises on level 18 of AMP Centre to Level 7 in 21 Queen St. The rest of AMP, which is AMP Financial Services, with quite a lot of people, will continue to occupy the several floors it already has in the AMP Centre," she said.

Pritchard said staff were moving "because it better meets the needs of AMP and we had an existing customer in the AMP Centre to take level 18: Southern Cross. So they have leased that floor on a long-term basis".

Shares in AMP NZ Office were yesterday trading around 82c, close to its 84c annual high.

The Zurich building refurbishment by Fletcher Construction has been controversial for AMP after extensive refurbishment was undertaken without pre-signing leases. It took some time before tenants showed interest in the eco-friendly block which lacks carparking but is opposite Auckland's Britomart transport terminal.

AMP has leased 63 per cent of the 13,600sq m building which has a five- star Green Star rating and a gallery-style foyer on the first and second floors overlooking QE II Square. AMP shifted the building's entranceway to face the north and had four new floors built on top, each with a 3m floor-to-ceiling height. The building has a high-performance double-glazed facade, contributing to environmental sustainability. It also has high-speed destination control lifts, big efficient floor plates around a central core and full-height curtain wall glass to maximise light and views.

AMP installed chilled beam airconditioning which has lower operating costs for tenants than conventional airconditioning systems.

BIG SHIFTS

AMP NZ Office new leases
Goodman Group 151 Queen St
SAP 151 Queen St
Serious Fraud Office 21 Queen St
Swire Shopping 151 Queen St
Willis 21 Queen St
Human Rights Commission 21 Queen St
AMP 21 Queen St