19 November 2004
Capital Properties NZ Ltd acknowledged today the $53.4 million investment made by Kiwi Income Property Trust in Capital Properties shares, resulting in a 19.9% total shareholding in the company.
The shares were acquired at a cash price of $1.15 per Capital Properties share and are subject to a 12 month escalation clause.
Capital Properties Chairman Colin Beyer congratulated Kiwi on their purchase commenting that it was pleasing to note Kiwi's recognition of the inherent value in Capital Properties shares in the $1.15 price paid per share. Mr. Beyer commented that Capital Properties were looking forward to Kiwi clarifying their future intentions and confirmed that Kiwi's inclination to enter into 'constructive dialogue' would be welcomed by Capital Properties.
Mr Beyer confirmed that Capital Properties board remained committed to upholding the interests of Capital Properties remaining shareholders. He noted that Kiwi's offer was for up to 19.9% and he encouraged Kiwi to extend their $1.15 per share cash offer to all Capital Properties shareholders. This would enable all 17,000 Capital Properties shareholders to consider the Kiwi offer on the same terms. Mr Beyer noted that if this were done, not all shareholders would necessarily accept nor could it be taken that Capital Properties directors would necessarily recommend it, but that this would seem to be a fair approach for Kiwi to take.
Mr Beyer further commented that Capital Properties shareholders had enjoyed excellent returns in recent years and that the company was in good heart. Recent Capital Properties performance highlights include:
* A gross return of 55% over the last 2 years equivalent to an average annual gross return of 24% pa
* Capital Properties placing as third best property stock in terms of financial performance in a survey of 44 Australian and New Zealand listed property entities and the top performing New Zealand listed property stock. The survey was carried out by Australian based BDO Corporate Finance Ltd earlier this year.
* Significant rental growth experienced in recent rent views.
* Excellent exposure to the strongly performing government office sector, where 52% of its rental income is currently derived.
* Average annual revaluation gains of $19 million pa (5% pa) in the last 2 years, as the value of the Company's property portfolio has steadily increased in value.
* Significant value upside in its undeveloped Thorndon landholdings, the new Defence headquarters office building now under construction and its recent acquisition of Centre City Shopping Centre.
* Low management costs with internalised management and the absence of an external management contract.