1B William Pickering Drive, Albany, Auckland
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| Investment Type | Proportionate Ownership Scheme |
| Distribution Rate p.a. | 3.48% |
| Annual Estimated Cash Distribution | $870.00 Gross |
| Note on Cash Distribution | Investors are paid their portion of profit quarterly in arrears. As such no withholding tax is deducted. Investors are sent an end of year summary stating their share of profit and depreciation allowance for tax purposes. |
| Auditor | KPMG |
| Make up of Investment Parcel | $25,000 interest |
| Issue Date | 8 July 2005 |
| Net Asset Backing per Parcel | $25,066 per parcel as at 31 March 2010 |
| Distribution Dates | 31 March, 30 June, 30 September, 31 December |
| Fund Issues | From the 31 March 2010 Annual Report: The Scheme achieved a net operating surplus per Interest of $1,142 which was ahead of budget. This provided an investor return for the year under review of 4.57% per annum. An amount of $870 per Interest was distributed equating to a 3.48% per annum cash return, consistent with forecast. Commencing with the 30 September 2010 payment we will be increasing the distribution to 4.00% per annum. The key reason for a better than expected operating cash surplus was a reduction in expenses, from $76,895 in 2009 to $55,985 in 2010. This is primarily due to lower professional fees budgeted to cover design options for the development of the spare land at the property. The Property The year ended March 2010 was another difficult period for the commercial property market due to soft economic conditions. However, despite the difficult environment it is pleasing to note that our valuers assessed the property’s value at $2.50 million, a $150,000 increase on the March 2009 valuation. This has consequently improved the net asset backing so that it is once again above par value at $25,066. Tenant, Bar Africa continues to trade reasonably well from the site despite a very difficult environment for hospitality in this area. The Albany Industrial Estate has suffered from several major business closures and relocations which has consequently reduced Bar Africa’s local customer base. Our efforts to generate some carrying income from the vacant yard space (the ex-display centre) at the property have proved unsuccessful to date with the local market being saturated with unimproved industrial yards. We believe the best strategy currently is to wait for a recovery in market rentals, which will in turn improve land values. Once values begin to improve the development or divestment of this property will become a viable option. Accordingly, we will continue to monitor the market with a view to finding the solution which will provide maximum benefit for investors. |
Property
| Location: | 1B William Pickering Drive, Albany, Auckland |
| Purchase Price | $2,200,000 |
| Valuation at Purchase | $2,600,000 |
| Current Valuation | $2,500,000 |
| Tenant Information | Bar Africa 2006 Limited has a direct lease to 25 November 2018 with three yearly rent reviews to market scheduled, the next being 25 November 2011. The remaining space, the ex-display centre, as expected is proving very difficult to fill. As well we have the ongoing question of how best to gain value from the vacant land. Two options are currently under consideration: As originally intended we could redevelop the property and potentially unit title the development. However the economic environment has further deteriorated this year and we do not believe the time is right to undertake this type of project; and the property could be sub-divided and the vacant section sold. We have assessed the viability of this option. Unfortunately potential buyers would also be looking to develop the property and, again the market has had a detrimental effect on demand from this type of buyer. Furthermore there are complications with the provision of car-parking which makes this a less than straight-forward solution. We will continue to monitor the market and explore options with a view to finding the solution which will provide maximum benefit for investors. |