Annual Result FY24
Strong core office performance with growing net property income.
Financial summary
Strong core office performance with net property income (NPI) growing to $139.3 million (2023: $130.2 million), up 5.8%.
Funds from operations (FFO) from directly held investment portfolio of $126.9 million, up 2.9% (2023: $123.3 million), contributing to net operating income before tax of $103.6 million, up 1.5% (2023: $102.1 million).
Total comprehensive income after tax of ($30.1) million (2023: ($147.5) million) with an annual revaluation which recorded a $105.2 million decline in FY24 (2023: $257.1 million), reflecting a stabilising investment property market.
Adjusted funds from operations (AFFO) of 6.69 cps (2023: 6.69 cps).
Net Tangible Asset (NTA) per share of $1.29 (2023: $1.38).
Operating performance
Portfolio occupancy of 98% with 6.6 years (2023: 6.0 years) weighted average lease term (WALT)
Rental growth has been strong with new office lease deals up 15.9% and rent reviews achieving a 3.4% increase
Full year leasing of 13,500 square metres secured in the portfolio across both Auckland and Wellington.
Completed 44 Bowen Street with occupancy now 100%.
Completed redevelopment of Deloitte Centre at One Queen Street including the opening of the new flagship hotel, InterContinental Auckland.
Advancing living strategy and future development opportunities with capital partners
Reflecting strategic progress on Precinct’s living sector activities, a move to 100% ownership of Precinct Properties Residential Limited (PPRL), the joint venture established with Tim and Andrew Lamont in 2022.
Entry into the purpose-built student accommodation (PBSA) sector.
Acquisition of 256 Queen Street in Auckland with resource consent now lodged for a c.600 bed PBSA facility.
Following strong interest from potential capital partners, Precinct is working exclusively with a preferred capital partner to invest alongside Precinct, subject to certain conditions being satisfied. Precinct will hold an interest of 20%.
Further well-located PBSA site secured under option through to mid 2025 and advancing under due diligence.
Growth in Precinct’s residential Build-to-Sell pipeline.
Commenced construction of three new build-to-sell apartment developments on behalf of capital partners, with a total sales value of $431 million.
Agreement to conditionally acquire a site at the junction of Dominion and Valley Road in Mount Eden for a residential apartment development.
Announcing today, entering into a conditional agreement with Orams Group to jointly develop their significant waterfront site at Wynyard Quarter including a small scale commercial development and large scale residential development site. The agreement is conditional upon agreeing and finalising full-form transaction documentation and approval from Auckland Council (as ground lessor).
Precinct now has an active build-to-sell residential development pipeline of $431 million and a total residential pipeline, excluding downtown carpark, of circa $970 million.
Advancing the downtown carpark development.
Unconditional agreement with Eke Panuku to acquire and redevelop the site, with resource consent now lodged.
Pre-leasing underway with exclusive negotiations with a major occupier for circa 40% of the office space.
Joint venture formed with Ngāti Whātua Ōrākei, to invest in the regeneration of the Te Tōangaroa precinct in Auckland. Precinct’s investment is in partnership with PAG.
Funding initiatives supporting continued execution of our strategy
Capital recycling with the sale of Mason Bros. building located in Auckland for $50.3 million and settlement of the sale of 40 Bowen Street and 44 Bowen Street in Wellington.
$150 million of subordinated convertible notes issued during the period providing capital management and strategic benefits.
Secured Precinct's first green bank loan of $168 million which will be used to fund the 61 Molesworth Street development which is targeting a six star green star rating.
Refinanced existing bank debt with new syndicated facilities totalling $700 million. These facilities provide sufficient liquidity to repay Precinct’s bonds and USPP due to mature in November and January, respectively.
Environmental, Social and Governance (ESG) update
Precinct improved its Global Real Estate Sustainability Benchmark (GRESB) score to 86, well above the current global average of 75 and maintained a public disclosure level of ‘A’.
Precinct’s climate related disclosures will be published in October 2024 under the ESG section of our website.
