The former Defence House building at 5 Stout Street, Wellington, owned by Argosy Property.
The former Defence House building at 5 Stout Street, Wellington, owned by Argosy Property.
The $2 billion-dollar NZX-listed diversified landlord Argosy Property pushed up gross property rental income from $124 million to $131m and last year’s after-tax loss of $80.3m fell to a $55.2m loss in the year to March 31, 2024.
Chairman Jeff Morrison said the board was satisfied with the way the business, management team and staff had performed despite weak operating conditions and high interest rates.
“These high rates have clearly had a negative influence on property values. As a board, we are pleased by the progress Argosy continues to make towards our sustainability goals evidenced by the green buildings completed, certifications achieved and future new developments,” he said.
Interest expenses rose from $36m to $43m and unrealised revaluation losses were $111.7m or 5.4 per cent but last year amounted to a much higher unrealised devaluation of $146m.
Argosy declared investment properties of $2b, down from $2.1b last year and the company is paying a full-year dividend of 6.65cps, with a final-quarter dividend of 1.66cps to be paid on June 26.
The $55.2m full-year net loss after tax was driven by $111.7m revaluation declines, it said, and gearing was comfortable in the middle of the 30 to 40 per cent target.
Properties range from the Auckland commercial office block Citibank House to some of The Warehouse stores.
Chief executive Peter Mence said a tougher economic environment influenced the year. A softer leasing environment identified in the company’s interim results persisted over the second half of the financial year, he noted.
“However, the team has delivered solid results across our core operating metrics,” Mence said.
Peter Mence heads Argosy Property.
The portfolio’s weighted average lease term was 5.2 years and occupancy was 96.7 per cent.
Argosy completed 115 rent reviews in the year, achieving annualised rental growth of 3.5 per cent. Those reviews were on rents totalling $93m.
Key leasing deals included:
The Mind Lab, 99-107 Khyber Pass Rd, Newmarket: 875sq m renewed for four years;
Electrix, 15 Unity Dr and Rothwell Ave, Albany: 14,000sq m renewed for four years;
Instant Offices NZ, 105 Carlton Gore Rd: 1102sq m, new eight-year lease signed;
The Warehouse, Albany Mega Centre: 908sq m renewed for three years;
The Warehouse, Taupō: 4212sq m renewed for five years;
NIWA, 82 Wyndham St, Auckland CBD: 2650sq m, new 12-year lease;
Colgate Palmolive, 105 Carlton Gore Rd: 561sq m, new six-year lease;
Stantec New Zealand, 105 Carlton Gore Rd: 1647sq m, new eight-year lease;
Harbour Cancer Centre, 105 Carlton Gore Rd: 772sq m, new 12-year lease;
Mainfreight, 32 Bell Avenue, Mt Wellington: 8138sq m, 13-month extension.
Mence said the portfolio was 51 per cent weighted to industrial properties.
The company had a pipeline of green value-added development industrial sites, such as 224 Neilson St, Onehunga which was being developed.
Jarden has a neutral rating on the company, saying leasing had been a key focus of today’s result. As expected, Argosy was holding the dividend flat into its 2025 financial year despite tax changes with operating cash flow cover looking tight.
Shares in Argosy have been trading around $1.12, up 2 per cent annually.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
