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Argosy sells under-performing Ellerslie property at just below book value

Argosy Property [NZX: ARG], the fourth-biggest listed property investor by market value, has sold an underperforming office building in Auckland's Ellerslie for $10.4 million.

The sale was at 92 percent of book value and is part of Argosy's plan to ditch underperforming assets, the company said in a statement.

"The property, which has suffered from a long term vacancy factor, has provided a disappointing total return of less than 5 percent and has been available for sale for some time," Argosy said.

"There was a requirement for significant capital expenditure on the building and this combined with the historical difficulties in maintaining an acceptable occupancy rate meant the total return was below acceptable levels."

Argosy shares rose 0.6 percent to 92 cents, and have edged up 1.7 percent this year, lagging the 13 percent gain on the NZX All Index, a capital measure of domestic equities, over the same period.

(BusinessDesk)

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Comments and questions
2

As the property assets get revalued ever year book value does not reflect purchase cost.
Would be interesting to know how much over cost or below purchase price the blding sold for????

I think the reference to book value is meant to refer to their annual revaluation amount rather than purchase price.

In any instance records show purchase price was $9.7m in September 2003 vs indicated book value from the Argosy announcment $11.3m. So sold for $900k less than valuation, but a $675k increase on purchase price.

Albeit at a pretty average return over the period since purchase.