Precinct Properties NZ Ltd & Precinct Properties Investments (PCT) H2 2024 earnings summary

Executive summary

• Achieved 98% occupancy and a 6.6-year weighted average lease term, with strong leasing spreads and resilient demand for premium office assets.

• Advanced strategic growth in the living sector, including 100% ownership of the residential platform and entry into student accommodation.

• Completed major developments such as One Queen Street, Deloitte Centre, and InterContinental Auckland hotel, and launched a refreshed brand.

• Maintained stable dividend guidance for FY25 at 6.75 cps, reflecting confidence in the medium-term outlook.

• GRESB sustainability score improved to 86, well above the global average, with $1.9bn of green assets and a net zero by 2030 commitment.

Financial highlights

• Net loss after tax was ($22.1)m to ($30.1)m, a significant improvement from prior year losses, mainly due to lower property devaluations.

• Operating profit before income tax was $103.6m, up 1.5% year-over-year.

• Funds from operations (FFO) at $114.5m–$126.9m (7.22 cps); AFFO at $106.2m (6.69 cps); FFO from directly owned assets up 5.2%.

• Net property income increased 5.8%–7.0% to $139.3m.

• Net tangible assets per share declined to $1.29 from $1.38.

Outlook and guidance

• FY25 dividend guidance confirmed at 6.75 cps per share, with rent reviews forecast to generate a 3.7% uplift.

• Medium-term outlook supported by moderating inflation, lower interest rates, and a robust development and living sector pipeline.

• Confidence in earnings underpinned by 11% under-renting and strong demand for premium office space.

• Weak economic conditions and legislative changes (removal of tax depreciation) expected to impact near-term earnings.