This article was originally titled: Valuation uncertainty forced deferral of Asset Plus rights issue. However, Asset Plus makes it clear the valuation problems affect all entities in the sector with 31 March balance dates.
Valuers from 4 major real estate agencies told entities in the property sector this week they couldn’t provide “a final & definitive opinion on values until after the 31 March valuation date”.
I noted in the original version of this article that this uncertainty affected Asset Plus Ltd in particular – but Asset Plus told me this morning it was a sector-wide notice, and the company had only referred to it in an NZX notice because it had referred to the valuation in its presentation to investors on its proposed rights issue, now withdrawn.
Asset Plus used draft valuations in the investor presentation it released on 10 March to support the $100 million rights issue to fund redevelopment at 35 Graham St in central Auckland and development of an Albany building to be leased to Auckland Council.
The development plans have been defeated, for the moment, by the uncertainty arising from the Covid-19 coronavirus.
Asset Plus said in clarification today the financial statements aren’t required to be released until the end of May, and the company expects it will be able to have finalised valuations by then, which would be reflected in the annual financial statements.
The company also noted that only JLL & Colliers had valued Asset Plus’s properties this year.
The valuers said in their letter to entities in the sector: “Representatives of the Colliers, CBRE, Savills & JLL Valuation teams met to review approach & process regarding 31 March 2020 financial reporting valuations in light of the rapidly evolving Covid-19 situation and the uncertain market conditions. Ongoing local & global Government policymaking continues to change markets by the day.
“Given this unprecedented situation & the timing, we have formed a collective view that we are unable to provide a final & definitive opinion on values until after the 31 March 2020 valuation date. If, post that date, there is a cause for material change to draft valuations, then an appropriate time will need to be available to the valuers to prepare updated valuations.”
Asset Plus chair Bruce Cotterill said the company expected final property valuations to be released with its results for the year ending 31 March. However, he said: “Until final valuations are made available by Asset Plus, shareholders should not place undue reliance on the draft property valuations referred to in the investor presentation given the draft nature of those valuations, the now redundant purpose for which they were disclosed and the rapidly evolving Covid-19 situation which is impacting market conditions.”
18 March 2020: Asset Plus pulls rights issue
11 March 2020: Asset Plus announces rights offer, Augusta to cut its stake
14 February 2020: Asset Plus signs council for Albany development, prepares for capital-raising
Attribution: Asset Plus.