Transcription of Finance News Network Interview with GPT Metro Office Fund (ASX:GMF)Fund Manager, Chris Blackmore Carolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from GPT Metro Office Fund
(ASX:GMF) is Fund Manager, Chris Blackmore. Chris welcome back.
Chris Blackmore: Thanks Carolyn, it’s a pleasure to be here.
Carolyn Herbert: You’ve just announced your full year results for financial year 2015. What were the highlights?
Chris Blackmore: Yes, so we recorded a profit of $35.7 million, importantly earnings at 11.28 cents per unit were above the PDS forecast. And the declared distribution at 10.15 cents, also above the PDS forecast. Importantly, we’ve restated our guidance for the PDS period from IPO to the 31
st of December, with earnings at three per cent above the PDS forecast. And distributions at two per cent, above the PDS forecast.
We’ve seen a $24 million increase in valuations to $401.8 million and our NTA has risen to $2.09 per unit. Also importantly, our gearing has come in at 28.9 per cent.
Carolyn Herbert: What was behind the increase in earnings per unit?
Chris Blackmore: There are a number of component parts to that, including the fact the Fund traded for three additional days ahead of the PDS forecast. We had some savings in transaction costs at IPO. We had savings in interest costs along the way, and we also had some surrender income from tenants as well.
Carolyn Herbert: Has that flowed through to the distribution and if so, what does that bring the full year distribution to?
Chris Blackmore: Yes so it has flowed through to the distribution. The distribution to 30
thof June is 10.15 cents and for the whole PDS period to the 31
st of December, it’s two per cent above our PDS guidance.
Carolyn Herbert:So to recap, GMF holds the portfolio of six A-grade office properties on the eastern seaboard. What’s the occupancy rate and the average weighted lease expiry?
Chris Blackmore: The occupancy is sitting at 95.5 per cent and our weighted average lease expiry is 6.3 years.
Carolyn Herbert: What success has the Fund had with securing new leases over the year?
Chris Blackmore: Over the period, we’ve had success in securing new leases at five tenancies in Quads 2 and 3 (Sydney Olympic Park). And also we have secured a seven-year lease extension with McConnell Dowell Corporation Limited, at our Vantage asset in Hawthorn. They’ll take a seven-year term through to March 2023.
Carolyn Herbert: Can you tell us a bit about the gearing level of the Fund, and what are your plans for gearing over the next 12 months?
Chris Blackmore: The gearing level is sitting at 28.9 per cent, comfortably within the 25 to 40 per cent range. And that’s a level, which we feel comfortable going forwards.
Carolyn Herbert: Final question now Chris. What’s your outlook for Metro Office markets for the second half?
Chris Blackmore: We see the Metro Office markets of having balanced fundamentals. We think there’s a very stable outlook. We see the rental growth come through, moderate vacancy. We’ve also seen cap rates compress and the outlook is very favourable.
Carolyn Herbert: Chris, thank you for your update.
Chris Blackmore: Thank you very much.
Ends
