Dorchester Pacific Sells Frankton Arm Apartments

Dorchester Pacific Sells Frankton Arm Apartments

Thursday, 10 March 2011, 3:53 pm
Press Release: Dorchester Pacific

DORCHESTER ANNOUNCES SALE OF FRANKTON ARM APARTMENTS
SIGNALING POSITIVE NEWS FOR THE PROPERTY TRUST UNITHOLDERS

Dorchester Pacific, as Manager of the Dorchester Property Trust, today announced that it has signed an agreement for the sale of the Frankton Arm Apartments in Queenstown, at the carrying value of $2.3 million.

Dorchester Executive Director and CEO Paul Byrnes said: “We are pleased to be able to advise Unitholders of the sale of the Trust’s Frankton Arm Apartments property at book value. This is a good result and it is especially pleasing to be able to provide these returns to Unitholders in the current market environment.

“While the Frankton Arm Apartments is the smallest of the four properties in the $33 million Property Trust it still represents approximately 7 cents per unit. Its suitability as a development opportunity for the purchaser has enabled us to secure this sale price. The sale and purchase is in two transactions and distribution from the first transaction settlement (approximately $1.4 million ) will be paid out to Unitholders in the next 60 days. Over the coming days we will be writing to our Unitholders to provide them with a number of other positive updates.”

In addition to the Frankton Arm Apartments, the Dorchester Property Trust owns three other more established and larger hotel properties, the Goldridge Hotel (Queenstown), Emerald Hotel (Gisborne) and Parkview Hotel (Christchurch). All three hotels have been trading comfortably ahead of the forecast included in the June 2010 Prospectus.

With regard to the performance of these hotels Mr Byrnes commented: “While the market remains competitive, occupancy rates across the portfolio have remained high. We are continuing to make strategic investments in the properties, such as the recently completed spa and sauna facilities at Goldridge Resort, and this is helping to ensure that we continue to attract both new and repeat business. The strong management and quality facilities at our properties have also been recognised at this year’s Travelbug Awards, which just awarded the Emerald Hotel a Platinum Property 2011 Award.”

In its letter to Unitholders updating them on the performance of the Property Trust, Dorchester will include early notice of the first annual meeting of the Property Trust and a call for nominations for a person to be appointed to the Manager’s Board of Directors as a representative of the Unitholders.

The letter will also update Unitholders that following the Canterbury earthquake in February, the Trust’s Parkview Hotel complex in Christchurch has suffered only minor cosmetic damage, and that the property is continuing to operate at full occupancy.

Dorchester advises that it has received a number of Notifications of Inspection of the Dorchester Property Trust Register and is aware of a current offer from an entity trading as Zero Commission NZ Ltd to purchase Dorchester Property Trust $1 Units at $0.32 each.

Mr Byrnes added: “We would certainly suggest Unitholders wait until they consider the positive information covered in the update we will be sending imminently regarding the Dorchester Property Trust. The properties in the Trust are all performing positively and with the first distribution from the Frankton Arm Apartments sale to be made within the next 60 days, Unitholders should carefully consider their options and seek professional advice prior to making a decision on the current offer or any other similar offers that may arise.”

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