A revaluation just before the September half-year balance date lifted Argosy Property Ltd’s portfolio value by $34.6 million, resulting in a 5c/share gain in asset backing.
Chief executive Peter Mence said in the interim report yesterday the revaluation was undertaken following evidence of improved market conditions since the last valuation date of 31 March 2018, and desktop valuations performed by Colliers International during the period.
The $34.6 million gain lifted the portfolio 2.2% above previous book value.
Mr Mence said the post-revaluation contract yield on values was 6.63%, and 6.7% on fully let market rentals.
The company has been progressively selling non-core assets, and Mr Mence said 10% of the portfolio, worth $153 million, remained categorised as non-core. This includes 2 properties sold for a total $45.7 million, both with December settlements, and the Albany Lifestyle Centre, which is on the market.
“Argosy will continue its divestment programme over the next 12-18 months to take advantage of current market conditions,” Mr Mence said.
The company has a $650 million debt facility, and Mr Mence said Argosy would review its long-term debt funding options with a view to diversifying its debt funding base over the next 12 months.
- Pretax profit $71.2 million ($27.4 million)
- After-tax profit $66.8 million ($23.1 million)
- Total portfolio value $1.62 billion ($1.51 billion)
- Revaluation gain 2.2% on book value to $34.6 million (nil)
- Disposal gains $2.9 million ($165,000)
- Basic & diluted earnings/share 8.07c (2.8c)
- Net tangible assets $1.17 ($1.12 in March)
- Debt:total assets ratio, excluding capitalised borrowing costs, 36.8% (35.9% in March)
- Borrowings $603.8 million ($552.8 million)
- Weighted average lease term 5.6 years (6.6 years)
- Weighted average interest rate 4.86% (4.98% in March)
- Occupancy (by rent) 98.4% (98.8% in March)
- Gross distributable income up 7.1% to $33.4 million
- Gross distributable income/share up 6.6% to 4.04c (3.79c)
- Net distributable income up 9.2% to $28.7 million
- Net distributable income/share up 8.8% to 3.47c (3.19c)
- Weighted average lease term 5.6 years (6.1 years in March), reflecting the adjusted arrangements with NZ Post at 7 Waterloo Quay in Wellington
The company completed 42 rent reviews on $15.5 million of existing rental income during the half-year, achieving 3.4% rental growth (3.1% annualised).
Argosy completed 24 lease transactions (16 new leases, 7 renewals, one extension) on 39,500m² of net lettable area.
- East Tamaki, 320 Ti Rakau Drive, Bunnings Ltd 10 years
- Albany, Albany Lifestyle Centre, E Road Ltd 9 years, Peterken Enterprises Ltd 6 years
- Albany, Albany Mega Centre, Auckland Outdoor Holdings Ltd 6 years.
Mr Mence said the company had filled some of the vacancy at the Citigroup Centre, 23 Customs St East in downtown Auckland levels 2, 14 & part 13 leased, enquiry on the remaining floors 6, 7 & the balance of 13.
Attribution: Company release, interim report.