Argosy posts profit despite uncertain market conditions
· RNZProperty investor Argosy has reported a steady full-year profit on rental growth and revaluation gains, despite a more uncertain market environment.
Key numbers for the year ended March compared with a year ago:
- Net profit $127.7m vs $125.9m
- Net property income $120.8m vs $116.9m
- Net distributable income $60.9m vs $55.8m
- Revaluation gain $58.5m vs $72.7m
- Occupancy 94.6 pct
- Net tangible assets $1.60 per share vs $1.53
- Full year dividend 6.65 cents per share unchanged
The commercial property owner increased income on higher rents and contributions from developments, while lower interest costs also supported earnings.
Argosy said annual rent reviews delivered 3.5 percent growth across leases, with stronger gains in its industrial portfolio helping to offset weaker office and retail conditions.
Chief executive Peter Mence said the business had remained resilient despite a cautious property market and rising global uncertainty.
"Leasing activity reflected longer decision-making timeframes, however enquiry levels increased in the second half of the year."
Revaluation gains were lower than last year but still added $58.5 million to earnings, reflecting modest cap rate firming and rising market rents.
Industrial assets were a key driver, with the sector continuing to show stronger demand, supported by low vacancy levels and stable rental growth.
Argosy maintained occupancy at just under 95 percent and a weighted average lease term of five years, after completing a number of lease renewals and extensions with major tenants.
The company is continuing to shift its portfolio toward newer, more energy-efficient buildings, with about 39 percent now classified as "green", as it works toward a target of 50 percent by 2031.
Chair Jeff Morrison said the company's diversified portfolio and balance sheet left it well positioned, despite geopolitical tensions weighing on sentiment.
"Leasing enquiry levels have improved recently, albeit recognising they may be impacted by broader market uncertainty."
Argosy has maintained its dividend at 6.65 cents per share and expects to hold that level in the current financial year.
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