DNZ Quarterly Portfolio Update – Strong Leasing Activity in First Quarter FY12

DNZ Quarterly Portfolio Update – Strong Leasing Activity in First Quarter FY12

DNZ Quarterly Portfolio Update – Strong Leasing Activity in First Quarter FY12 13/07/2011

This announcement from DNZ Property Fund Limited is a recently implemented quarterly portfolio update communication on the Company’s property portfolio statistics.

The intention is to ensure shareholders are informed on performance for the first and third quarters, which fall between the Interim and Annual Reports. This update covers the first quarter of the 2012 financial year, being 1 April to 30 June 2011.

Portfolio Overview

As at 31 March 2011As at 30 June 2011
Properties 50 50
Tenants 283 285
Net Lettable Area (sqm) 371,481 372,279
Net Contract Rental ($) 56,024,258 56,521,256
Weighted Average Lease Term (WALT) (years) 4.32 4.47
Occupancy Rate (by area) (%) 97.9 98.1
Asset Valuation (31 March 2011) ($) 637,705,000 637,705,000

Note: The increase in Net Lettable Area is due to the canopy extension at 968 Great South Road, Auckland. The above table does not include the recently announced purchase of three Foodstuffs supermarkets (with settlement scheduled for 20 September 2011). If these three properties, with 18 year leases, were included, the Company’s WALT (as at 30 June 2011) would increase to 5.17 years.

Tim Storey, Chairman of DNZ, said “Following on from a solid performance for the year to 31 March 2011, the management team has improved all the portfolio statistics in the first quarter. Management has further enhanced the Company’s occupancy rate to 98.1%, significantly reduced the 2012 lease expiry profile and added approximately $0.5 million in net contract rental. The management team’s ongoing focus on tenant retention is again clearly evident.”

Lease Transactions

The DNZ management team completed 51 lease transactions during the quarter that included:

  • 23 rent reviews over 54,624m2 for a total rental of $7.1 million
  • 13 lease renewals completed over 22,056m2 for a total rental of $2.7 million
  • 15 new lettings completed over 17,092m2 for a total rental of $3.0 million
  • Major Transactions Completed

    TenantCommencementArea m²Term
    General Distributors Ltd (Progressive Enterprises) August-2011 12,665 1 year
    Goodyear & Dunlop Tyres* September-2015 9,727 5.5 years
    NZ Post September-2011 6,027 6 years
    DDB** June-2012 3,659 6 years
    Johnsonville City Fitness August-2011 1,2546 years
    Serato August-2011 1,068 6 years
    New Zealand Association of Credit Unions August-2011 8199 years
    ANZ Bank July-2011 375 5 years
    CanonAugust-2011 337 6 years

    *Sublease from Chrisco Hampers from April 2011 to September 2015.
    **Actual lease commencement on the completion of building works.

    Paul Duffy, Chief Executive of DNZ, said “Key components of achieving rental income growth in the portfolio are lease renewals and rental reviews. DNZ currently has a target of having 25% of the portfolio’s rental reviews being a combination of fixed and/or stepped increases at a review date, or being linked to an increase in inflation based on movements in CPI. It is also particularly satisfying that 20 of the 28 lease renewal and new letting transactions were negotiated directly by the management team.”

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

    Paul Duffy, Chief Executive, DNZ Property Fund Limited
    DDI: 09 913 1154 – Mobile: 021 843 758 – Email: paul.duffy@dnzproperty.com

    DNZ Property Fund Overview
    DNZ Property Fund Limited 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 30 June 2011, DNZ Property Fund owned 50 properties with 285 tenants, a weighted average lease term (WALT) of 4.5 years, an occupancy rate of 98% over a net lettable area of 372,279m², and a portfolio value of $638m (31 March 2011 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 for Australian institutional investors.

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