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DNZ lifts contracted rentals, extends lease term

BUSINESSDESK: DNZ Property Fund says leasing transactions in the March quarter have increased its contracted annual rentals by 0.6% and lifted its weighted average lease term to 5.6 years at June 30 from 5.4 years three months earlier.

In its June quarter portfolio update, chief executive Paul Duffy says management completed 33 lease transactions in the three months, increasing net contracted annual rentals to $58.6 million from $58.2 million.

Of the transactions, 17 were rent reviews over 60,086sq m for a total annual rental of $7.3 million and seven were lease renewals over 13,960sq m for a total annual rental of $3.4 million.

The major renewal was the Countdown store in Fenton St, Rotorua, which has been extended to August 2015 and covers 5172sq m. 

There were nine new lettings covering 23,891sq m for a total annual rental of $2.1 million.

Major new tenants are NZ Merchant at 20 Rockridge Ave in Penrose, Auckland, beginning in October this year for 4.5 years covering 10,239sq m, and Value Tyres at 62 Columbia Ave, Christchurch, beginning in August this year for 10 years and covering 12,665sq m. 

“Leasing activity by the DNZ management team during the first quarter of the financial year has halved the portfolio lease expiry to 4.7% of the porfolio contract rental in full-year 2012 and reduced full-year 2014 to 7.7%.”

DNZ shares are unchanged at $1.46, down from their record $1.50 in May. The shares have been trending higher from the year low at $1.17 in August last year.