The Warehouse at Argosy's Albany Mega Centre. Photo / Dean Purcell
Rising real estate valuations pushed listed landlord Argosy Property's interim net after-tax profit up by 11 per cent and tenants got $800,000 in rent abatements from pandemic lockdowns.
Net profit after tax rose from $114.6 million in the half-year to September 30, 2020 to $127m in the half-year to September 30, 2021.
Argosy said that was a record.
Revaluation gains rose from $79.8m to $91.7m in the same period.
Net property income was up from $50.5m to $53.1m.
Shareholders will get a quarterly 1.63csp and 6.55cps for the full year.
Argosy owns the Albany Mega Centre, office blocks in Newmarket, Greenlane, around the Viaduct and in Wellington and logistics and warehouse properties at Albany, Tamaki and Silverdale.
Chief executive Peter Mence said: "Despite the extended lockdown in Auckland and ensuing economic challenges which continue today, we are pleased to have delivered a solid result for the first six months of the 2022 financial year."
All up, 47 rent reviews were completed resulting in a 2.4 per cent increase in rental income for the latest six months.
"These reviews were achieved on rents totalling $26.8m. On rents subject to review by sector, Argosy achieved annualised rental growth of 2.4 per cent for industrial rent reviews, 2.4 per cent for office rent reviews and 3.2 per cent for large format retail rent reviews," it said.
The company is developing Wellington offices for Statistics NZ. Mence said although Argosy was undertaking that development and there was solid market interest, the job was interrupted by Covid lockdowns.
"There was a significant project milestone achieved when the tower crane was removed on August 8, just a week before the current lockdown started," Mence said of 8-14 Willis St and 360 Lambton Quay.
The company had expected to finish that project in February but its investor presentation today said it had been extended by a month to March.
At 360 Lambton Quay, the company is repurposing the building into a combination of retail and office space. This, along with increased costs caused by delays to the project
have increased the expected total spend, including land, to $140.1m, the company has said previously.
Retail leases negotiated in that Wellington project are to Mountain Warehouse, Flo & Frankie and James Pascoe which would return after a five-year absence.
The company already deferred plans for developments at 101 and 105 Carlton Gore Rd, Newmarket.
Mence expressed caution about the next six months.
"While we delivered positive leasing outcomes over the first half of the year, given the extended nature of the current Covid-19 lockdown and impact on the Auckland economy, we remain somewhat cautious on the outlook for the second half of the 2022 financial year," Mence said.
The industrial sector was the most resilient, he noted.
A company outlook said: "Argosy's quality portfolio is in good shape and its balance sheet is conservatively geared. It has the capacity and flexibility to fund its near-term green value add opportunities."
Argosy has 34 industrial buildings valued at $1b, 16 office buildings valued at $846.8m and four large format retail buildings valued at $214.9m.
Shares have been trading around $1.47, giving a market cap of $1.2b. The company's portfolio was valued at $2b in July.
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