VPM unitholders do better than expected
A year ago unitholders in the Victoria Park Market property syndicate were looking at big losses. The picture is much healthier now.
Wednesday, July 16th 2003, 2:48AM
This is a good outcome for investors, as the property had an independent valuation of $11.85 million in March 2003.
“Victoria Park Market has made a stunning return to good financial health in the past 18 months. When we agreed to manage the market 18 months ago we knew that the value couldn’t get a lot lower though we were unsure of exactly how much we could improve it,” St Laurence managing director Kevin Podmore says.
“Unitholders can expect to receive 83c per unit, net of costs, which is a substantial premium on the net tangible asset backing of 16c in March 2001. In March 2002, the NTA was still 20c so the sale represents a 300% gain.
“We are aware that some unitholders haven’t received distributions since the mid 1990s so it is pleasing to see that the final price is above market expectations.’’
Victoria Park Market was formed in 1994 as a publicly syndicated property fund made up of many individual unitholders.
The sale has to be approved by 50% of Victoria Part Market’s unitholders. A notice of meeting will be sent out next week with the meeting due to be held in August. If 50% of unitholders agree to the sale the fund will then be liquidated and following this unitholders will receive their distributions.
Podmore said Victoria Park Market’s return to financial health was achieved by lifting rental yields, better use of space and reducing vacant lots, and improving the mix of tenants. St Laurence also reduced the debt of Victoria Park Market by $1 million to $3.2 million during its term as manager.
Victoria Park Market returned total revenue of $2.6 million in the last financial year and St Laurence used its bulk buying power to lower costs such as power, water, security and cleaning. Revenue was maximised by signage and car parking.
Podmore said there was scope for a developer such as Kitchener Group to add value with sensitive development, particularly to the current car parking and open space areas of the site.
“The economic outlook in Auckland is healthy for the next 12 months and the retail market in that region has been strong over the past two years.”
Podmore says the sale was well timed. “We always said we would manage Victoria Park Market with a view to selling it once it was in good financial health and at a point where we could unlock value for unitholders.”
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