Precinct Properties NZ Ltd’s portfolio has been revalued upward by 8.8% to $2.5 billion.
The draft revaluation gain, to be confirmed in the annual result out on 16 August, was $202 million, compared to a $77.5 million gain last year.
Net tangible assets/share will rise from $1.23 to $1.41.
Chief executive Scott Pritchard said today the development portfolio contributed significantly to the revaluation gain, reflecting development profit recognition & cap rate firming on these projects.
On a like-for-like basis, Auckland asset valuations increased by about 13% and Wellington was largely unchanged. The increase recorded in Auckland was mainly attributable to a firming in cap rates supported by recent asset sales evidence, together with market rental growth.
In Wellington, while rentals & cap rates improved over the last 12 months, this had been offset by additional operating expenses, mainly insurance premiums & rates.
Mr Pritchard commented: “This strong result reflects Precinct’s active management approach, with the investment portfolio value increasing by around $100 million and the current development projects benefiting from a $100 million gain.
“Forecast net profit, which considers a project’s status & estimated cost to complete, from both Commercial Bay & Bowen Campus developments, has increased to $313 million. This follows Commercial Bay’s value on completion increasing to just over $1 billion. Pleasingly, based on current project metrics, there remains a further $125 million of unrecognised profit which is expected to materialise on completion of these projects, which would add a further 10c/share to pro forma NTA.”
Attribution: Company release.