22 May 2014

Argosy profit up, strong year ahead

6:02 am on 22 May 2014

Argosy Property is forecasting another strong year after reporting a more than doubling in annual net profit.

A late night office block with lights on in Auckland's CBD.

A late night office block with lights on in Auckland's CBD. Photo: PHOTO NZ

The landlord's profit for the 12 months ended March jumped to $85.6 million, with $33.5 million of that being unrealised gains in the value of its properties.

Its distributable income rose 18.4 percent to $50 million, although per-share distributable income fell to 6.69 cents from 7.22 cents the previous year because the company issued more shares in the latest year.

Chief executive Peter Mence said the per-share fall reflected some financial restructuring which should improve the performance in future, as well as purchases which had not yet begun contributing to earnings.

Mr Mence said the year just gone had been a busy one.

"We've had quite a bit of activity, particularly in leasing. There's been a lot of work gone on there but we've got some fairly good results as the market's been improving," he said.

"Obviously the vacancy factor has improved and is actually under 1 percent as at today, so progress since the end of year has also been pretty good."

Most areas of the market were showing positive net absorption, so there was demand for more space, Mr Mence said.

"It's good to see some of the tenants we've had in the portfolio for some time have been expanding their occupancy. So it's good for us and it's good for New Zealand Inc as well."

Mr Mence expected to see growth for at least the next year, he said.