Property for Industry posts profit increase

Property investor Property For Industry (PFI) today reported its June half year net profit rose 3.8 per cent to $6.8 million, in line with expectations.

Rentals for the six months rose 10.5 per cent on the year ago period to $14.0 million as a result of acquisitions, development projects and higher rents.

The company bought three new properties last year, and completed four development projects during 2005 and in the early part of 2006.

Earnings per share rose 2.5 per cent to 3.30 cents.

A second quarter dividend of 1.50 cents per share with imputation credits of 0.40 cps will be paid on August 10. The dividend is 8.9 per cent above 2005 on a gross basis.

Managing director Ross Blackmore said the industrial market was strong, but settling back into a "more normal phase" after 24 months of impressive growth.

He said industrial property was still forecast to be one of the top performers among property investment classes.

"Tenant inquiry is continuing at a steady rate and there is an ongoing shortage of good-quality investment property available for purchase.

"Regardless of that, PFI will continue to seek out opportunistic acquisitions over the coming months."

The company said it had four projects under construction and due for completion later this year, and -- having retained six of the nine tenants whose leases were scheduled to expire in 2006 -- was working with potential replacement tenants for the balance.

PFI's portfolio was around 7.5 per cent under-rented at the end of 2005, and it said it had completed nine of the 26 rent reviews scheduled for this year, resulting in a total increase of $220,000 per annum, or 3.17 per cent per annum on a compounded basis.

PFI's portfolio of 55 properties is 99 per cent occupied and is valued at $342.7m.

PFI shares closed yesterday on $1.43, having traded between $1.07 and $1.45 in the last year.

- NZPA