Precinct Properties New Zealand reported a 6.8% rise in operating profit before indirect expenses and income tax to $162.7 million for the fiscal year ended June 30, 2026, as record leasing activity offset a decline in net tangible assets (NTA).
The company’s NTA per share fell 8.3% to $1.13 from $1.21 at the end of fiscal 2025, driven by a $107.5 million loss in the fair value of investment and development properties. Funds from operations (FFO) increased 3.0% year-over-year to 7.31 cents per share, totaling $129.5 million, while directly-held property FFO rose 7.6% to $161.7 million. Comprehensive income after tax attributable to equity holders turned to a loss of $12.6 million, compared with a $3.1 million gain in FY25.
Leasing activity surged, with approximately 37,850 square meters of new leases completed—more than double the 18,800 square meters in FY25. Portfolio occupancy remained stable at 97%, while the weighted average lease term (WALT) extended to 7.1 years from 6.0 years in June 2025. Office leasing spreads averaged 9.9%, down from 17.2% a year earlier, with regional variations: Auckland at 10.9%, Wellington at 7.2%, and Commercial Bay retail at 2.8%.
Commercial Bay retail turnover increased 5.6% to $167.6 million, with specialty sales per square meter up 5.4% to $12,900. The occupancy cost ratio for specialty retail improved from 16.5% to 14.7%. Office attendance averaged 4.1 days per week among Precinct’s clients, above the market average of 3.3 days.
Capital partnerships expanded to $2.2 billion in committed on-completion value, including a $600 million fund for the new PwC Tower in a 50:50 joint venture with PAG. Precinct also acquired a 24.9% stake in the $205 million ASB North Wharf transaction with GIC. The company recycled $1.3 billion in capital to date, with income yield from partnerships reaching 6.4% in FY26 and projected to rise to 7–8% in FY27.
Pro forma gearing declined to 29% from 42% at the end of FY25 following over $1 billion in capital management initiatives. The weighted average cost of debt edged down to 5.1% from 5.2%, while interest coverage improved to 2.1 times from 2.0 times. Precinct issued a $65 million five-year wholesale bond post-balance-date, extending the weighted average maturity of debt facilities to 2.6 years.
The development pipeline totaled $4.0 billion, with $0.9 billion in committed projects at 54% weighted ownership. Completed developments in FY26 included the 55 Molesworth Street Wellington office asset, which secured a 21-year WALT with fixed net rental growth and the Ministry of Foreign Affairs and Trade as anchor tenant. New commitments included the Pillars residential development, targeting a 20%+ return on cost.
The Downtown development secured fast-track resource consent, with about 50% of office space under exclusivity. Stage 1, with a target capital commitment of $1.66 billion, includes demolition, enabling works, a full basement, Tower 1, and three office podia with ground-floor retail and civic space. The project targets a return on cost above 15% and a yield on cost in the mid-to-high 6% range.
Precinct maintained its dividend guidance at 6.75 cents per share for FY27, with an expected FFO payout ratio near the top of the 80–95% target range. Shares fell 1.44% to close at $1.03 on the NZX.
