Rising interest rates are dampening the value of office blocks.
Listed Capital Properties New Zealand yesterday reported a 4.9 per cent devaluation of its real estate, which is worth $380 million, as part of its annual result. The devaluation knocked $19.7 million off its books.
New Zealand's fifth-largest property companyby asset base attributed the fall to the continual escalation in interest rates.
But chief executive Nick Wevers said the drop had had little material effect.
"We still get the same amount of rent in, so it doesn't affect our cash flow. It's just a book thing."
Mr Wevers referred to the annual result from Trans Tasman Properties, which has $1.3 billion worth of buildings.
It knocked the value of its real estate back 2 per cent, incurring a writedown of $25.1 million in its result for the year to December 31.
"Current market conditions are causing writedowns of around these levels for commercial property owners in all New Zealand's major centres," Capital Properties told the stock exchange.
Announcing a $13.1 million surplus after tax for March 31 year, Capital Properties said it was not all bad news as its result was actually 16 per cent ahead of forecasts.
The company has been going only two years, buying Shortland Properties for $226 million in December. That gave Capital Properties 12 Wellington buildings and eight in Auckland.
Mr Wevers said the company would look at buying newer buildings and balancing the portfolio more towards Auckland real estate.
