Precinct Properties NZ Ltd & Precinct Properties Investments (PCT) H2 2025 earnings summary

Executive summary

• Portfolio occupancy reached 97% with a weighted average lease term of 6.0 years, supported by strong leasing spreads and premium office outperformance.

• Strategic execution included major capital partnerships, new developments in living and office sectors, and active capital recycling.

• Economic recovery is underway, with lower interest rates expected to support investment and business confidence.

• Confirmed FY26 dividend guidance of 6.75cps, reflecting a stable payout policy and confidence in strategy.

• Advanced capital management by refinancing over $500 million of debt and recycling $200 million from asset sales, including a premium sale of the InterContinental Hotel.

Financial highlights

• Funds from operations (FFO) from directly held investment portfolio rose 3.7% to $150.3 million year-over-year.

• Operating profit before indirect expenses and income tax increased 1.2% to $152.3 million.

• Comprehensive income after tax was $3.1 million, a turnaround from a $30 million loss last year, mainly due to lower fair value losses.

• Commercial Bay retail FFO up 8.3%, occupancy at 97%, and moving annual turnover up 3.7%.

• Adjusted funds from operations (AFFO) were $103.8 million or 6.54 cps, with a payout ratio of 103%.

Outlook and guidance

• Dividend for FY26 expected to be held stable at 6.75 cps per stapled security, with a payout ratio of 90%.

• Updated dividend policy targets a payout range of 80% to 95% of FFO for greater flexibility and sustainability.

• Positive near-term outlook underpinned by economic recovery, lower interest rates, and completed developments.

• Premium office market expected to remain strong, with constrained supply and continued outperformance.

• Targeting $4-5 billion in capital partnerships over the medium term.