Positive office fundamentals in most United States markets have help underpin a strong half-year result for Tishman Speyer Office Fund.
Yesterday, TSO announced a net profit of $87.7 million for the six months to December 31, 2006 – an increase of 39.9% over $62.7 million in 2005.
The trust has declared distributions of 8.5 cents per unit for the period unchanged from last year.
Tishman Speyer Australia’s chief executive Tom Feldstein said TSO is well positioned to benefit from continued strengthening in the US office markets.
“Once again the leasing activity in the portfolio has been a highlight of the period demonstrating the strength of the Tishman Speyer operating platform. In Chicago two substantial leases were negotiated during the period, one with GATX for 128,000 sq ft and one with Citicorp for 234,000 sq ft.”
“Both leases were secured through a combination of the efforts of our local leasing team, the quality of the assets and, perhaps most critically, Tishman Speyer’s corporate relationship with these two tenants and other tenants in the building in order to accommodate GATX’s and Citicorp’s space needs,” he added.
During the period, 310,000 sq ft of new and expansion leases and 135,000 sq ft of renewal leases, were signed. The leasing activity resulted in the portfolio being 95.6% leased at period end compared with 94.3% six months earlier.
“This success, in conjunction with the increased demand for commercial real estate, has driven an uplift in value of the IPO portfolio from $US1.9bn to $US2.6bn today based on a 100% interest. TSO’s share of this increase has been more than $US300 million which has contributed to the increase in NTA of 45% since listing,” Feldstein said.
It is currently expected that the trust will pay total distributions of 17 cents per unit for the 2007 financial year.
Yesterday, TSO announced an equity raising of approximately $123 million via an institutional placement which has been fully underwritten by Credit Suisse and Deutsche Bank AG.
The proceeds of the placement will initially be used to retire the outstanding balance of an existing revolving credit facility of approximately $US60 million with the remainder invested in interest bearing deposits.
The capital raising will provide TSO with additional funding capacity.
Tishman Speyer is currently evaluating a number of potential portfolio and individual asset transaction opportunities.
Australian Property Journal
