Precinct delivers annual profit of $138.2 million and lifts guidance
Precinct Properties New Zealand Limited (Precinct) (NZX: PCT) reported its financial results for the 12 months ended 30 June 2016 today, with a net profit after tax of $138.2 million. This compared with $122.4 million for the same period last year, with the increase mainly attributable to a strong revaluation gain of $81.2 million. Net operating income increased 6.6% to $72.8 million versus $68.3 million the year before. With gearing at very low levels during the year in preparation for the development spend, net operating income per share was 6.01 cps (2015: 6.19 cps), consistent with market guidance.
Scott Pritchard, Precinct’s CEO, said “It has been very satisfying to record significant progress across several fronts over the year. The operational and financial results for the year as well as the commitments to Commercial Bay and Wynyard Quarter Stage One were significant highlights. However, the post balance date commitment by the Crown to 68,000 sqm of Wellington office space was arguably the key achievement as it will transform the quality of our Wellington government portfolio.”
Post balance date, law firm MinterEllisonRuddWatts committed to the new PwC Tower at Commercial Bay taking pre-leasing at the new tower to 60%. “We welcome MinterEllisonRuddWatts into the portfolio and are delighted with our leasing progress given we are 3 years from the completion date.” Scott Pritchard, Precinct’s CEO, said.
As well as Commercial Bay, Auckland leasing continues to be very strong. HSBC Bank extended their current lease in 1 Queen Street and committed to relocate in 2019 to 188 Quay Street taking naming rights over the building. Real estate agency firm Colliers International have also committed to relocate to 188 Quay Street, which largely removes the vacancy risk from PwC's relocation to Commercial Bay.
“Including the Government leasing, our team have leased an impressive 135,000 sqm of office space in the year which is equivalent to over four PwC Towers. Following this success leasing risk has substantially reduced, enabling us to have greater confidence in our ability to deliver our long term strategy and earnings growth.”
We ended the year in a strong position. Our buildings were 98% occupied (2015: 98%) with an overall WALT of 6.3 years (2015: 5.0 years), extending out to 8.2 years when the three developments are included.
Read the full announcement here