DNZ Property Fund Limited (DNZ) 31 March 2011 Earnings Guidance, Dividend Announcement and Transaction Update

DNZ Property Fund Limited (DNZ) 31 March 2011 Earnings Guidance, Dividend Announcement and Transaction Update

DNZ Property Fund Limited (DNZ) 31 March 2011 Earnings Guidance, Dividend Announcement and Transaction Update 9/02/2011

31 March 2011 Earnings Guidance
The Board of DNZ Property Fund Limited (NZX code: DNZ), is pleased to confirm today that the Company will achieve its forecast distributable earnings for the year ending 31 March 2011, as disclosed in the Offer Document dated 9 July 2010.


Third Quarter Dividend 2.0 Cents per Share

The Board has approved a third quarter cash dividend of 2.0 cents per share. This dividend will carry imputation credits of 0.228 cents per share. The record date for this dividend is 24 February 2011, with payment to shareholders to be made on 10 March 2011. A supplementary dividend of 0.094 cents per share will be paid to non-resident shareholders on 10 March 2011.

Transaction Update
DNZ Property Fund’s management team has been particularly active over the ten months to 31 January 2011 with a number of key milestones achieved.

Asset Sales Programme

The asset sales programme has realised $57.5 million (gross) during the period 1 April 2010 to 31 January 2011 with the additional unconditionally contracted sale of Jackson Street, Petone, for $13.6 million (gross) due to settle on 25 February 2011. The net proceeds from the sales have been utilised to repay bank debt.

Lease Transactions Increase Occupancy to 98%

Management has completed 168 lease transactions in the ten month period to 31 January 2011 resulting in the occupancy rate within the DNZ Portfolio increasing from 95% as at 31 May 2010 to 98% as at 31 January 2011. The 168 lease transactions included:

  • 87 rent reviews over 134,079m² for a total rental of $24.1 million
  • 28 lease renewals completed over 9,882m² for a total rental of $2.2 million
  • 53 new lettings completed over 46,850m² for a total rental of $7.9 million
  • Transactions of significance include new leases to Maritime New Zealand at 3-11 Hunter Street, in Wellington, MYOB at 25 Teed Street, Newmarket, Auckland and New Zealand Post at 1 Grey Street, Wellington.

    Completion of Fletcher Building Laminex Group Design Build at O’Rorke Road, Penrose

    The new 12,000m² warehouse and 1,800m² office building over 2.89 hectares was completed on 19 November 2010, with a new 12 year lease. The management team is currently looking to negotiate terms for a design/build facility for the residual 2.28 hectares of the site.

    Tim Storey, Chairman of DNZ Property Fund, says “The DNZ management team has performed well in the last 10 months through maintaining rental income, improving occupancy to 98%, and completing the asset sales programme, in what continues to be a challenging business environment. The completion of the Fletcher Building facility in Penrose has added another quality asset to the portfolio with a 12 year lease to one of New Zealand’s leading corporates.”

    Storey concluded by saying “DNZ’s strong performance has enabled the Board to confirm a third quarter dividend of 2.0 cents per share, which is consistent with guidance provided.”

    Attachments Provided to NZX:
    1. NZX Appendix 7

    For Further Information Please Contact:
    Tim Storey, Chairman, DNZ Property Fund Limited
    Mobile: 021 633 089 – Email: tim.storey@dnzproperty.com

    DNZ Property Fund Overview
    DNZ Property Fund Limited (NZX Code: DNZ) owns one of New Zealand’s largest diversified investment property portfolios with commercial office, retail and industrial properties located in the main urban areas throughout New Zealand.

    As at 31 January 2011, DNZ Property Fund owned 51 properties with 286 tenants, a weighted average lease term (WALT) of 4.4 years, an occupancy rate of 98% over a net lettable area of 381,498m², net contract rental of $57m with a portfolio value of $661m (latest valuations).

    DNZ Property Fund Limited is a Portfolio Investment Entity in which investors hold shares, and is managed by its own internalised management team. DNZ Property Fund Limited also manages the property portfolio of Diversified NZ Property Fund Limited, which is owned by Australian institutional investors.

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