The country's largest listed investor in prime commercial office property, AMP NZ Office Trust (ANZO), has announced a $126 million revaluation gain, taking the value of its portfolio above $1 billion.
ANZO owns 11 office buildings in Auckland and Wellington, with its flagship, the PricewaterhouseCoopers Tower in Auckland, now valuedat $216.4 million.
In a statement today, ANZO, managed by AMP Multiplex Management, said growth in office rentals was the major driver behind the $126 million portfolio revaluation gain.
Executive manager Robert Lang said the 14.2 per cent unrealised gain was the strongest since ANZO was listed in 1997.
It took the value of the portfolio to $1.018 billion.
"Improving office market fundamentals have led to strong rental growth -- a trend we expect to continue," Mr Lang said.
ANZO's net income had continued to increase during the year. The trust benefited from a leasing campaign with portfolio occupancy at 99 per cent since December.
Similarly market rent reviews had produced an average increase of 15.5 per cent in the financial period to May 2006, Mr Lang said.
Further rental growth was anticipated, with prime and A-grade vacancy rates in Auckland and Wellington at historic lows.
Rent reviews were due on about 56 per cent of the portfolio by area within the next two years.
In Wellington, Mayfair House, bought in September 2005 for $29.3 million, was now valued at $35.3 million, a total return of 26 per cent for the nine-month period.
ANZO's redeveloped property at No 1 and 3 The Terrace , now 96 per cent occupied and undergoing final commissioning, was valued at $76.1 million.
The biggest revaluation gain in dollar terms was at the fully-occupied PricewaterhouseCoopers Tower, which increased in value by $26 million during the year.
The annual revaluation is to be audited and incorporated in ANZO's full-year financial result for the year to June 30, which will be announced in early August.
As a result of the revaluation, ANZO said its net tangible assets per unit was estimated to increase by 20 per cent from $1.01 to $1.21 per unit.
ANZO units closed yesterday at $1.06, having traded between 89c and $1.09 in the past year.
