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Colonial First State Property Trust beats forecast

Published: Fri 2 Jun 2000 02:24 PM
For immediate release 2 June 2000
Colonial First State Property Trust beats forecast
Colonial First State Property General Manager Lloyd Cundy announced today an after-tax profit for the Trust of $12.251m, before revaluation, for the ten months to 31 March 2000, up $0.92m on the Prospectus forecast.
Mr Cundy said the higher profit is a result of the Trust's investment strategy of focusing on superior fringe CBD office buildings in Auckland, where the demand for space is enhancing the quality of the Trust's rental income. The Trust is also fully tenanted.
Mr Cundy said he was pleased the Trust's unitholders were able to share in the higher than expected profit.
Unitholders will receive a final distribution of 2.7316 cents per unit made up of 2.4 cents cash with a 0.3316 cent imputation credit. The distribution equates to an annualised gross yield of 10.45%, up 0.15% on the Prospectus forecast for the ten months ended 31 March 2000.
"The Trust is achieving its objective of providing unitholders with a quality and reliable income stream," said Mr Cundy.
The portfolio was revalued down 1.73% to $196.26m during the year. Mr Cundy said the writedown was minimal given the current interest rate environment and does not affect the Trust's earnings, profitability or level of dividends.
"The Trust is fortunate that it is not highly exposed to CBD office markets which have been marked down on the back of weakening yields and vacancy concerns.
Mr Cundy said the Trust has retained its 100% occupancy rate through a process of active management and a refurbishment programme focused on maintaining and enhancing the quality of the property portfolio.
Of particular highlight during the year was the successful refurbishment of Christchurch's South City Shopping Centre and Unisys House in Wellington (previously Aurora House), two of the major assets in the portfolio.
"Turnover in the centre has increased over 60% since the refurbishment was completed.
The completion of Public Trust House (formerly 101 Carlton Gore Road) Auckland in December meant another fully tenanted building was added to the Trust.
While the Trust continues to trade at a discount to book value on the New Zealand Stock Exchange, Mr Cundy said the Trust's unit price was not a true reflection of the Trust's performance.
"Investors' preoccupation with seeking high growth from shares, and an environment of rising interest rates, has seen the listed property market remain out of favour with many investors.
Mr Cundy said the Trust's unit price has been largely unaffected by the recent volatility of global sharemarkets, reflecting the Trust's quality underlying rental income.
"Most sharemarkets have suffered losses over the last couple of months. The turbulence affecting technology stocks, in particular, has highlighted the benefits of a reliable income-producing stock as part of a diversified investment portfolio."
Despite the announcement of further interest rate rises in the week ending 26 May 2000, the Trust's unit price improved to $0.86.
Colonial First State Property Trust owns ten buildings in Auckland, two in Wellington and two in Christchurch. The portfolio is a diversified mix of commercial office, industrial and retail properties in a variety of CBD, fringe CBD, suburban and office park locations.
The Trust listed on the New Zealand Stock Exchange on 3 June 1999.
ENDS
For further information contact:
Andrew Murrell Investor Relations Manager Tel: 04 470 4547 Mobile: 025 770 069 Fax: 04 470 4501 Email: amurrell@colonialfs.co.nz

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