Precinct Properties NZ Ltd & Precinct Properties Investments (PCT) H1 2025 earnings summary

Executive summary

• Premium-grade office demand and occupancy remain strong at 96%, with a weighted average lease term of 6.3 years, despite economic headwinds and a slight decline from the prior year.

• Achieved robust rental growth, with new office leases secured at 22.8% above previous contract rents and a 3.1% uplift from rent reviews.

• Expansion in the living sector continues, with three residential projects under construction, six pipeline sites secured, and two Auckland PBSA sites for 1,600 beds.

• Major events included the completion of Beca House at Wynyard Quarter, acquisition of the remaining 50% of Precinct Properties Residential Limited, and a $75m green bond issue.

• Dividend guidance reaffirmed at 6.75 cents per share for FY25.

Financial highlights

• Gross operating revenue rose to $134.4m, up 11% year-over-year; net property income increased to $71.4m from $68.4m.

• Funds from operations increased to $72.7m from $67.7m year-over-year; AFFO per share was 3.23 cps, with a payout ratio of 104%.

• Net profit after tax attributable to equity holders was $9.2m, down from $15.3m in the prior period.

• Total comprehensive income after tax declined to $3.2m from $12.9m year-over-year, mainly due to higher net interest expense.

• Net tangible assets per share decreased to $1.25 from $1.35 year-over-year.

Outlook and guidance

• Dividend guidance for FY25 reaffirmed at 6.75 cents per share, with payout ratio expected to modestly exceed 100%.

• Office market benefits from limited supply and return-to-office trends, supporting rental growth.

• Focus remains on capital partnering, deleveraging, and asset sales targeted for 2025.

• Medium-term outlook for residential and student accommodation remains positive, supported by demographic trends and lower interest rates.