7 Nov 2011

ANZO expects to benefit from tougher quake rules

8:06 am on 7 November 2011

Commercial office property investor AMP NZ Office (ANZO) says it will benefit from rising demand for prime space in Wellington as the capital's buildings face tougher earthquake safety rules.

The listed company owns several properties in Wellington which have all been assessed as structurally sound.

Chief executive Scott Pritchard says Wellington is becoming a two-tiered market.

He says the Government is stating it wants to reduce how much space it occupies and a few corporates are still suggesting they will move to Auckland.

But Mr Pritchard says in the background there is an intense focus on building structural integrity as a consequence of the Christchurch earthquakes.

He says only about 30% of the market meets 75% to 80% of the building code, so that means there will be more demand for prime buildings and less demand for the B, C and D grade assets.

Mr Pritchard says given that, ANZO is well positioned because it has good grade buildings.

The company is sticking with its forecast operating earnings of 5.1 to 5.4 cents per share, a drop on the previous year due to emptier buildings, he says.

The eurozone crisis could slow the decision-making of firms close to Europe which are considering whether or not to sign new tenancies in New Zealand.