Some of Argosy's key tenants are The Warehouse, New Zealand Post Group, PBT, Kāinga Ora and Te Puni Kōkiri. Photo: 123rf
Property development company Argosy has posted a full year bottom line loss on the back of falling property values, but income was up delivering a flat underlying result.
- Net loss $80.8m vs profit $236.2m
- Revaluation loss $146.6m vs gain $163.7m
- Underlying profit $64.2m vs $64.7m
- Net property income $112.8m vs $105.1m
- Adjusted funds from operations $58.1m vs $48.3m
- Full year dividend 6.65 cents a share
Chair Jeff Morrison said the company had fared well as it shifted its focus to industrial property and reduced exposure to office space.
"Inflation and interest rates have, and continue to be, an obvious concern and this is reflected in market volatility across the sector."
He said the company was constantly looking at its portfolio, tenants and rental income, but was comfortable given a third of its rental income came from government departments.
Chief executive Peter Mence said Argosy was starting the year in a strong position with particular interest in green and sustainable buildings and office space.
Clients were wanting more flexible working space, but the impact of working from home was "overstated", he said.
The company has 54 properties, predominantly industrial and centred in Auckland, but also with office space and large format retail. Overall occupancy rates were 99.3 percent with an average lease period of 5.4 years.
Leaving aside the property valuations, more than half of which occurred in the company's office properties, followed by industrial and the retail assets, the rental income was up 3.6 percent.
The company has three properties worth about $66m slated for divestment this year, and while overall there is a reasonable level of of inquiry it was taking longer to get deals over the line.
Mence said the company was not overly concerned by a possible change in government in October and talk by the National Party of reducing the size of the public service.
"What we tend to see when we have a change of colour of government, certainly a 'red' government increases absorption particularly in Wellington but a 'blue' government doesn't actually decrease it significantly, it tends to remain largely static."