Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Calan Accounts For Non Cash Gains, & Loss On Sale

May 12, 2004

Calan Accounts For Non Cash Gains, And Loss On Sale

Statement made by Miles Wentworth, Chief Executive Officer, Calan Healthcare Properties Trust

Accounting treatment will see Calan Healthcare Properties Trust book an unrealised return on construction ( UROC ) of approximately $1.25 million in this financial year and
approximately $1.3 million in the 2005 year, and write off $1.5 million on the loss of sale of an investment property in the current financial year.

The net result will be a write down of some $250,000 in this financial year and a gain of approximately $1.3 million in 2005.

The gain in UROC and loss on sale will be cash neutral, and will not impact on Calan’s objective to maintain a gross distribution of 8 cents a unit, during the construction stage of Epworth Eastern, through careful asset and debt management.

The increase in UROC from that originally envisaged arises from the accounting requirement to amortise over 20 years to the Statement of Financial Performance the A$2.2 million rent holiday extended to Epworth Foundation, the anchor tenant of Epworth Eastern.

The $48.2 million surgical / medical hospital has an initial annual rental of approximately A$3.9 million a year. Originally, we had anticipated the rental holiday being a cost to the project spread across the construction phase.

The write off of $1.5 million is the difference between the original purchase price and sale price of the Artemis Medical Centre in Auckland.

We have reached agreement with privately owned Radius Health Group Ltd to purchase the Artemis Centre for $2.45 million plus GST. The property has a fully tenanted book value of $3.25 million, but it has been untenanted for some months. The sale is conditional upon the purchaser undertaking due diligence, completing a successful negotiation with a major tenant group and obtaining Board approval by 31 May 2004.

The sale of the Artemis Medical Centre represents a sensible move for Calan. We are converting an investment which is non revenue producing into one returning an immediate 6.5% return. On an annual basis it represents an additional income stream of about $160,000.

The Trust purchased this property in October 1997 at a cost of $3.9 million with the intention of incorporating it within an envisaged major development on Auckland’s North Shore, known as the Waitemata Private project. At the time it was fully tenanted. The subsequent decision not to proceed with the Waitemata project (now conditionally sold to Metlifecare) has changed the Board’s view on the need for the retention of this property.

The agreement requires Radius to pay a cash deposit of $250,000 on unconditionality, a further $600,000 in six months and the remaining $1.6 million in 12 months. Calan will have a first mortgage over the property, and we will receive interest at 6.5% per annum on all outstanding balances.

As proceeds are received from the sale, they will be used to reduce debt.

The sale of the Artemis Centre is in line with our stated strategy of exiting non revenue producing assets and tidying up our investment portfolio.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>


Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news