Urbus Properties Limited
Registered Office Address
C/- Sherwin Chan & Walshe
Level 6, Queensgate Tower
45 Knights Road, Lower Hutt
Directors
HODGE, John N
HODGE, Shayne P
THOM, Denis G
WHITEHEAD, Robert J
HAWES, Warwick D
Background
Incorporated: 03-MAY-2000
Formed by the merger of Waltus Property Syndicates.
Major Shareholders
Shares on Issue
71,638,427
Ownership Restrictions
None Known
Share Registry
Unknown
Website
www.waltus.co.nz
News
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24th January 2003 - NBR Personal Investor
URBUS GRABS WINE HQ
By Christine Nikiel
Stock Exchange candidate Urbus has added to its haul of industrial property with the
purchase of wine company Montana's main bottling plant and head office in Auckland's East
Tamaki.
In one of the biggest industrial transactions of 2002, Urbus bought the 5.5ha site, which
includes 17,651sq m of warehouse and 37,165sq m of office space, for $15.5 million.
The deal, marketed by Colliers and scheduled to be settled at the end of March, boosts the
Urbus portfolio up to an average weighted unexpired lease term of 5.2 years from five years.
Urbus already owns three other properties in East Tamaki, with the new building bumping the
company up to 38,782sq m of industrial space in the area.
Urbus director Shayne Hodge said East Tamaki was a proven and well-established area for
industrial investment.
Mr Hodge said the purchase reflected the company's strategy of increasing its focus toward
industrial and bulk retail property in Auckland, Hamilton and Wellington.
The property would provide additional development opportunities with about 10,000sq m of
future additional expansion or development of new buildings.
The site and building was owned by Auckland winemaker Corbans until that company was bought
out by Montana in November 2000.
A spokesman for Urbus' negotiating representative, Terra Firma, said every effort had been
made to tenant the building before any sale to get a better price. Although Montana still has
a small presence there, it is looking to leave this year.
The major tenant is Tasman Logistics, with accountants Harts and CDP Security smaller
tenants.
Urbus also owns the 6859sq m building tenanted by Selwyn's Distribution Centre at 10
Transport Pl, at a net contract rental of $680,100; Robinson Industries tenants 6 Zelanian Dr
at a net contract rental of $395,000 for 5071sq m and South Pacific Tyres tenants 99-104
Springs Rd, Tamaki for a net contract rental of $242,000 for 3,795sq m.
The Urbus portfolio is now 31% industrial property, 37% retail property and 32% office
buildings.
The company worked on re-weighting its portfolio toward industrial and retail last year,
selling six properties for about $14.156 million, and said it wanted to focus on investing in
Auckland.
Urbus has plans to list on the New Zealand Stock Exchange this year.
In November, investors voted for a proposal to buy 16 properties owned by seven Waltus
Syndicate companies and two Waltus Syndicate special partnerships for $157 million. The
proposal was settled in December, taking the total portfolio value to $390 million.
The purchase drove Urbus to become the country's fourth- largest property company behind
Trans Tasman Properties, Kiwi Income Property Trust and AMP NZ Office Trust, with a
portfolio of $479 million.
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Friday 31st May 2002 - NBR Personal Investor, by Christine Nikiel
Investor Urbus finds building street credibility is slow going
Property investor Urbus Properties' is trying to build up street credibility but current
share prices and its latest financial results show it is a slow process.
The company yesterday announced an audited operating after-tax profit of $15.1 million before
revaluation adjustments. Urbus, the restructured portfolio of management company Waltus -
which merged its 27 properties in 2000 - first listed shares at $1 each. This week shares
were languishing at 75c.
The company's 5000-odd shareholders have not had an easy ride. Share prices plummeted to as
low as 54c just three months after the company began trading. "It's not 'oh God' country
though," chairman Denis Thom said. "We're confident when we're through with the
rationalisation process we'll have a clearer way."
Urbus' listing on the secondary board meant it did not get as much analysis and scrutiny as
the main board, Mr Thom said. Urbus shareholders did not trade a lot, he said, because the
company was not so well-known. "We need to give a better message to shareholders. Naturally
we're concerned but we obviously believe the share prices are undervalued." Asked whether
Urbus would list soon, Mr Thom said if Urbus listed it would be "closer to the end of the
year or early next year at the latest." Urbus is in the process of flogging off its dead wood
properties and "rationalising" its $200 million portfolio. Mr Thom said Urbus wanted to focus
on industrial and bulk retail, as those were the strongest markets.
Urbus recently sold four buildings for $6.1 million and bought two industrial properties in
Wellington and Auckland for $7.45 million. Urbus also bought six industrial buildings in
Auckland for $16.5 million. They had an average weighted lease term remaining of over
six-and-a-half years.
The properties had a combined annual market rental of $1.68 million and an annual yield on
purchase price of 10.16%, Mr Thom said.
Urbus total net lettable area under management is 318,724sq m, with a vacancy rate of 1.75%,
according to the company website.
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Friday 14th September 2001 - NBR Personal Investor, by Campbell McIlroy
The controversial merger of 27 Waltus property syndicates played out its final chapter this
week as the High Court cleared the company on charges of double-dipping.
Master Jim Thomson described the action by minority shareholders as a somewhat opportunistic
submission made late in the original hearing.
The case centred on whether pre-paid promotion and administration fees paid by the syndicates
to Waltus had been built into the new proposed management fee arrangements.
Master Thomson said the new fee structure did resolve the perceived problem originally
identified.
Waltus Property Management director Shayne Hodge said decision made it very clear cut that
there was no case to answer.
"But the cost has been considerable and these objectors flew in the face of a clear cut
democratic vote. And it has done nothing to add value to the whole exercise."
Waltus submitted during the case that promotion and administration fees were one-off, up
front, non refundable fees that had been written off in the year received and therefore were
not an asset in the books of the syndicates.
A statement from the company said it was able to show it made a number of compensations in
the merger proposal which exceeded the amounts already paid, and therefore, investors were
not being asked for a double payment.
The merger proposal was passed by an 86% majority of the investors who voted in November last
year.
High Court action by a group of minority shareholders, led by Brian Moyle and Murray
Weatherston, representing 3% of the new company, failed to prevent the merger proceeding.
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Friday 8th June 2001 - NBR Personal Investor, by Chris Hutching
Commercial property company Urbus Properties hopes to sell its High St Farmers building in
Christchurch because the lease on the property is running out and the tenant has given
notice.
Urbus, until recently known as Waltus Property Investments, was formed last November by
merging 27 Waltus syndicates, accounting for $225 million worth of properties, in an attempt
to spread risk and improve overall returns.
CB Richard Ellis director David Wallace said there were already several parties who were
interested in redeveloping the 1330sq m site entirely for retail use and possibly a high
rise hotel. Retailer Farmers has given notice and plans to leave at the end of August.
Other development options might include refurbishing the interior space, mainly retail and
mezzanine floor offices. The location at 256-266 High St is in the central business district
and enjoys heavy pedestrian traffic. The property has a contract rental of $565,5000 but a
market rental of $471,957 and a GV of $4.6 million. It is one of two Urbus properties in
Christchurch that comprise 3% of the Urbus portfolio, the other being a well leased
industrial property in Sir William Pickering Dr.
Waltus Management director Ray di Leva said the departure of Farmers and the consequent sale
process was unlikely to adversely affect Urbus.
If the property sold the proceeds would be reinvested in another property, probably in
Auckland.
"We're more focused on the northern part of the North Island. We didn't have a lot of
success in getting into Christchurch. I guess we didn't get off on the first four ships.
"That's the beauty of putting all the properties in one melting pot and we've got some
credits built up. We're also starting to get some of the benefits from reducing
over-rentedness of some properties and increasing the average length of leases. We're
de-risking the investment and we're pretty happy with the way things are going with the
profit release we just announced."
Last week Urbus posted a $6.8 million profit for the five months to March 31, exceeding
forecasts by 13% and rewarding shareholders with a dividend of $3.06 a share plus a 75c
imputation credit to be paid on June 8, representing a 9.5% dividend yield, nearly twice the
prospectus forecast.
The improved returns should soothe some of the vocal opponents of the merger last year.
But Mr Di Leva acknowledged it was disappointing that the share price continued to languish
at about 65c - a significant discount to the asset backing of around 97c. He was at a loss
to identify reasons for this.
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Friday 26th January 2001 - NBR Personal Investor, by Chris Hutching
Some of the first shares offered for sale in the new amalgamated Waltus Property Investments
have sold for nearly half the $1 listing price, providing a windfall for canny punters -
including one of the strongest opponents of the scheme.
The amalgamation of 27 separate Waltus property syndicates into one larger trust was fought
in the High Court by a small group of investors late last year, led by financial adviser
Murray Weatherston.
They were fearful they would be disadvantaged because the new shares would be discounted by
the market.
Although Mr Weatherston's predictions of a muted share price and illiquidity appear to have
been proven correct in the short term, he has turned adversity to advantage.
Last week he bought a parcel of the shares at 54c, representing a yield of 16%, and further
parcels at 62c and 72c.
Mr Weatherston said he understood that about 200,000 shares had traded so far. There are 25
million on issue. There was also an issue of convertible notes as part of the scheme but
they will begin trading when Waltus arranges a trading exchange at its Lower Hutt offices.
"According to the recent trades the investment has fallen roughly 35%. Clients I've spoken
with have lost faith in the company. I wonder what advisers who urged their clients to
accept the scheme are telling them now? And the issue of fees is still to be determined by
the court," Mr Weatherston said.
Waltus Management managing director Shayne Hodge said it was far too early to make claims
about a slump in price and illiquidity.
"Most people didn't even know we were successful in the High Court against Weatherston's
challenge because it was just before Christmas and we've only just come back this week.
"The traded volumes have been tiny. When I heard there were some going under 60c I thought
I'd be in too - you could form the queue behind me. But I found out it was only 2065 shares
going. You'll always get a few keen sellers at the beginning and there are people winding up
estates and stuff too. Have a look in four weeks or so and the situation will be different,"
Mr Hodge said.
He expected the shares to trade at around a 10-15% discount to asset backing because that
was the norm for property trusts.
Meanwhile, one of the chief proponents of the amalgamation, Kelvin Symes of Northplan
Financial Services, said he had been telling his clients to buy as many units as they could
at current prices. But when he made inquiries to a broker about buying more units he was
told there were none available because they had been bought by the Waltus Property Trust.
Mr Symes is bullish about Kiwi stocks at the moment and reckons they are at bargain basement
prices with yields of of 10-20% in some cases.
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Friday 1st December 2000 - NBR Personal Investor, by Campbell McIlroy
Waltus Property Investments made a less than spectacular debut on the NZSE's Unlisted
Securities Facility this week ahead of a Court of Appeal hearing on Monday which threatens
to repeal the merger of its 27 former syndicates.
On the brighter side the company this week concluded the largest commercial office lease it
has signed to date, with Infinity Group taking a nine-year lease on four levels and 76
carparks on Khyber Pass Rd in Auckland.
Waltus' issue price of $1 soon dropped to 94c but there were no trades by the close of play
on Wednesday due to the fact there were no buyers.
Waltus financial controller Hamish Plimmer said the company's net asset backing put the
share price at about 98c, but he expected with all the negative publicity surrounding the
company over the past few months, the impending court case and general market view of the
property market the shares would be trading at a discount.
The appeal is being brought by a group of minority share- holders opposed to the merger on
three grounds.
First, the group plans to argue the correct legal test was not applied by the High Court
when it approved the merger.
The group contends a more stringent criteria must be applied when the courts consider
whether to allow a merger to proceed or not.
Second, it will argue the Companies Act 1993 did remove unit holders' right to liquidate the
syndicates after 10 years because prospectus' issued by Waltus in both 1995 and 1996
promoted this exit option for unit holders.
If the act did remove that right then the group claims Waltus misrepresented this position
to investors but if it still existed it claims the outcome of the merger vote could well
have been very different.
The third reason for appeal is an argument over when and how buy-out provisions should be
exercised.
The appellants say the whole reason for having buy- out provisions is to offer an exit
strategy when there is a major change in the nature of the company, and the merger
constitutes a major change.
The appeal has been set down for half a day and will be heard in the Court of Appeal at
Wellington.
In the meantime the company was satisfying itself with the good news of its latest and
largest lease deal.
IT company Infinity Group took naming rights on the former Elders Finance Building at 60
Khyber Pass Rd.
Elders' lease expires on December 20 and this signing enables Waltus to keep the building
100% let.
General manager Ray Di Leva said he was reasonably happy with the rental rates negotiated.
Of greater significance was the amount of space the company leased, 4000sq m, and the
quality of the tenant, he said. The deal, brokered by Jason Seymour of Colliers Jardine,
keeps the Waltus portfolio at 98.1% occupied.
Mr Di Leva said the company was also working on another significant leasing in Hamilton but
was not in a position to comment further.
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Monday, December 4, 2000 - NBR Briefs
The Court of Appeal has rejected a bid by a group of investors to block the Waltus Property
Investments syndicates merger. The new company began trading on the NZSE's unlisted
securities facility last week.
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Wednesday, November 15, 2000 - NBR Briefs
An appeal has been lodged against a High Court decision approving the merger of 27 Waltus
property syndicates into a single $227 million property company.
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Friday, November 3, 2000 - NBR Briefs
Property company Waltus has discontinued its court action in the High Court at Wellington
appealing the Securities Commission to prohibit the offer documents of Waltus Property
Finance. In August the commission prohibited the distribution of an investment statement for
secured debenture stock offered by Waltus Property Finance.
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