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National Property Trust signals implications of budget moves

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 25 NZPA - National Property Trust said changes in the Government's budget will reduce its cash distributions by approximately 5.3 percent.

In the budget the Government removed depreciation deductions for any buildings with an estimated useful life of 50 years or more. The change, which will take effect from April 1 next year, will impact on the trust.

The trust said more positively, the Government also announced that the portfolio Investment entities rate will be reduced from 30 percent to 28 percent.

"These two changes will have an impact on all property trusts in New Zealand, with the specific impact on National Property Trust being approximately a 5.3 percent reduction in the trust's cash distributions," the trust said in a statement to NZX.

The trust had total assets of $191.2 million as at March 31. It reported a 2.1 percent rise in annual net distributable earnings in the 12 months to March 31. Negative property revaluations, the loss on sale of the properties and losses on interest rate swaps due to debt reduction resulted in an unaudited net loss after tax of $13.23m.

The trust is forecasting that the property rental market will continue to be difficult.

The trust manager's new distribution policy limits the level of cash distribution to approximately 90 percent of distributable earnings.

A final dividend distribution of 1.125 cents per unit will be paid on July 2 with a record date of June 18.

A group of unitholders are trying to remove the trust's manager, which is related to collapsed finance and property company St Laurence.

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