Aurora investment proves profitable

Press, 5 August 1981, Page 22

Aurora investment proves profitable

PA Wellington An investor who subscribed $2OO in the Aurora Group 21 years ago would now have an investment worth $20,000 as a result of cash and bonus issues, the chairman (Mr J. E. Gillingham) told the annual meeting in Wellington. In 1960 Aurora Group and Mayfair. Ltd. merged and with the erection of Aurora House a policy of growth and development began. During that period there were six bonus and five cash issues requiring a further $3158 from the shareholder.

The company had paid dividends since it was formed 54 years ago. For the last eight years this was taxfree and for the three previous years partly tax-free.

The company's growth showed the advantage of investing in well-sited city properties.

Discussing the future. Mr Gillingham said that demand for space in well-sited buildings remained firm. All the space in the company's properties, including those still being built, was fully let and leases were being renewed at full market levels.

Mr Gillingham said the 15level building at 38-42 The

Terrace was in the final stages of completion. The building at 101-103 The Terrace and 198-204 Lambton Quay was “coming out of the ground" and it was expected the contractors would make good progress. “With the exception of one small area in the Lambton Quay buiding. both these buildings are fully let on long-term leases. This protected the company against the risk of vacant space for a considerable time to come in spite of the fact that there were a number of buildings being erected in Wellington.

"The fact that these two new buildings have been fully let indicates that location is of prime importance in property." The contracts to erect both buildings, were with minor exceptions fixed price. "While this means that the contract price is higher than for a contract with escalation. it enables the company to plan and budget with a greater degree of accuracy and confidence."

Mr Gillingham said that in addition the company had purchased the land immediately to the north of Aurora House at 44-46 The Terrace by way of a share purchase.

The area was 28.000 sq ft, but because the company already owned land on either side the purchase enabled it to use the land involved more efficiently.

The result of the’purchase gave the equivalent of 32,000 sq ft. Mr Gillingham said that the budget increase in land tax for commercial and industrial land owners would be substantial for the group.’ "Bearing in mind that this would always be a possibility, we arranged some four or five years ago for our leases to be amended to recover future increases in land tax."

He said that the buildings which were completed in July. 1979. are shown in the accounts at that year's Government valuation. “In view of the price changes in land over the past year’or so. it seems likely that these valuations are conservative." Land purchases and buildings being erected were shown at cost.

The results of the motor division showed a marked increase over the previous year. Since the extension of the Nissan Datsun assembly plant at Auckland, the problems of supply had been overcome.