Trust's Chews Lane purchase questioned
New Zealand’s largest listed investor in prime commercial office property, AMP NZ Office Trust (ANZO), has an unconditional agreement to acquire a newly-built $77 million Wellington office and retail complex with 100% of the office space occupied by a government tenant.
Friday, December 21st 2007, 12:00AM
by The Landlord
The property is part of the wider Chews Lane precinct, which is currently undergoing an extensive $180 million office, retail and apartment redevelopment.
The purchase price is at a 7% running yield on leasehold land and it includes a $1.5m rental underwrite.
Broker Goldman Sachs JB Were says “this is an expensive acquisition, that is valuation neutral at best.”
“A 7% yield property on leasehold land is not cheap by any means, and APT's acquisition appetite again reflects its desire for growth, without necessarily adding material upside for unit holders. In the current environment of high borrowing rates and softening cap rates globally, it seems a risky strategy to pay peak cycle prices.”
“We remain comfortable with APT's current portfolio exposure to prime office and solid income growth outlook which underpins our buy recommendation. The key for APT will be to grow in a manner that adds value for investors, not just growth for growth's sake.”
| « Goodman Property Trust expands to become country’s biggest | Commercial returns out in front » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
