Property For Industry records $97.8m loss after $140.8m revaluation writedowns

44 Noel Burnside Rd, Wiri: one of 2021's largest sales. Photo / Property For Industry

NZX-listed warehouse and logistics specialist Property For Industry (PFI) made a $97.8 million net loss after tax in its latest year, following portfolio devaluations despite the sector’s popularity and extremely low vacancy levels.

The property giant, which owns 92 properties leased to 126 tenants for a weighted average of five years, has a portfolio valued at $2.028 billion, compared to last year’s $2.117b.

Today, the business which specialises in the sector popular with tenants, declared its result for the year to December 31, 2023, but is changing its balance date to a full year ending June 30.

Around 83 per cent of its properties are in Auckland and tenants paid $96.6m contract rent in the year. Rents settled were up 26 per cent from 2022 to 2023.

The company recorded a $13.9m net loss after tax in 2022.

PFI’s portfolio is 100 per cent occupied and 1.3 per cent of contract rent is due to expire in 2024.

Vacancies remain near historical lows. CBRE found Auckland prime industrial vacancies at 0.6 per cent and secondary industrial vacancies at 0.5 per cent, noting a slightly softer demand outlook through 2024 and 2025, with vacancies forecast to increase to around 2 per cent in 2024, PFI noted.

Around 148,000sq m or $17.7m of the portfolio by rent was leased during 2023 to five new and 24 existing tenants. Rents were agreed on $14.3m of contract rent, achieving a positive re-leasing spread of around 26 per cent on annual passing rents.

Simon Woodhams, chief executive, said: “Strong leasing outcomes have delivered cash flow and stability. Despite significant increases in interest rates during the year, low gearing, low vacancies and growing rents have all worked in our favour.”

A fourth-quarter dividend will take cash payouts to shareholders in 2023 to 8.30cps, up 2.5 per cent on 2022.

The company’s gearing of 32 per cent debt to assets will rise to 33.7 per cent in the first quarter of 2025 after acquisitions, divestments and new projects.

Around $267m or 13 per cent of the company’s portfolio is held in brownfield opportunities, providing a growing pipeline of near-term development opportunities.

Anthony Beverley will step down as chairman after the company’s annual meeting on April 3. Director Dean Bracewell will take over that role. Developer and investor Greg Reidy plans to retire from the board but Jeremy Simpson, who has extensive financial analysis experience, has been appointed a director. He starts tomorrow.

Shares in the company are trading around $2.22, down 2 per cent annually, giving a market cap of $1.1b.

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.