A fire that broke out at a central Auckland construction site this month has been declared arson but the landlord is emphasising an $89.1 million annual rise across its investments which gives its assets worth nearly $300m.
Auckland Real Estate Property Trust told the NZX yesterday that the August 1 fire at its building site beside the West Plaza – now named 1 Albert St – was deliberately lit.
But that was only a small part of yesterday’s announcement which told how well the trust was doing in its strategy of buying Auckland CBD buildings and improving them.
“The recent fire at the property has been confirmed as arson,” the trust said in its wider update of portfolio values.
The trust has for many months been refurbishing 1 Albert St on the Albert St/Fanshawe St corner.
The trust had contractors putting up a new separate structure as a club for its tenants to enjoy in the award-winning tower when that neighbouring site was set ablaze. Tenants in the 1970s building at 1 Albert St were unaffected by the fire and could return to their offices the next morning.
Nine fire appliances and 32 crew members attended the scene. The plastic wrapping covering the site’s scaffolding burned.
Fire and Emergency NZ Auckland City assistant area commander Barry Fox said on the night that the fire was extinguished by 11pm. Crew members established what damage had been sustained and investigated the cause.
The trust said yesterday it wouldn’t be out of pocket due to the fire.
“The property is insured and the insurance claim has been accepted in full. There is no impact on the building’s occupancy or value.”
The trust’s properties were valued on June 30, 2021 at $291m, up $89.1m on the June 30, 2020 valuations.
The tower at 1 Albert St rose from $72.5m to $125m after a refurbishment, repositioning and new leasing activity. A new entrance way has been established into the tower and much-praised architectural features have been restored under the trust’s ownership.
The website of West Plaza architect Neville H. Price says: “The slender high-rise is an enduring Auckland favourite that exhibits a sense of glamour and sophistication missing from many of the city’s tall buildings.”
The trust calls its buildings at 16 Kingston St and 60 Federal St Fusion. Those rose in value from $32m to $58m. The trust calls its building as 10 and 12 Viaduct Harbour Ave and 110 Customs St West The Harbour Collection. Those went up from $39.4m to $50m.
The trust said the rising values were due to it having bought new buildings for $58m and a period of active work to its assets which meant they were worth more.
Andrew Saunders, executive chairman of the trust’s fund manager, welcomed the uplift.
“It is very pleasing to see our strategy coming together so well and to see the valuations positively reflecting the successful implementation and progress we have made to date.
“The tenancy take-up and the rents we are achieving continue to be strong and generally ahead of our expectations, we remain confident that further upside is available as the strength of demand for our offering continues to attract tenants.
“We have commenced detailed discussions with brokers to explore liquidity and capital raising options in the New Zealand market to support our development and growth plans and expect to update investors on this towards the end of this calendar year,” Saunders said yesterday.
Occupancy levels at 1 Albert St had dropped from 90 per cent to 65 per cent reflecting the re-positioning works. Tenants within the building had relocated. Occupancy after June 30 was 83 per cent and rents have continued to grow.
Saunders said reasons for valuation rises varied.
“Each of the assets have a slightly different basis for the valuation improvements depending on where they are in their development or growth cycle. It is pleasing for us to see the valuations grow as we systematically eliminate construction and leasing risk and access the benefit of our investment strategy. The Fusion project offers the opportunity for more value creation, with continuing strength in the Auckland office market,” he said.
The trust’s units are unchanged at 79c and 80m units are on issue, giving a market capitalisation of $63m.
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