Precinct Properties New Zealand Ltd reported a 3% increase in funds from operations (FFO) to NZD 0.0731 per share for the fiscal year ended 2026, aligning with guidance. Total FFO reached NZD 129.5 million, with a dividend payout ratio of 92%. The company's shares slipped 1.44% to $1.03, reflecting valuation pressure on development assets.
The group's underlying FFO rose 7.6% to NZD 174 million, driven by direct property holdings. Investment property FFO increased 1.3% on a like-for-like basis to NZD 149.9 million. Operating profit before indirect expenses and tax climbed to NZD 162.7 million, while total comprehensive income posted a loss of NZD 12.6 million due to valuation declines in development properties, particularly Downtown.
Net tangible assets per share fell to NZD 1.13 from NZD 1.18 at December and NZD 1.21 previously, following a NZD 77 million valuation reduction in development assets during the second half. Pro forma gearing improved to 29% by year-end, supported by capital management actions including a NZD 65 million wholesale bond repayment of convertible notes.
The investment portfolio maintained occupancy at 97%, with physical occupancy near 96%. Leasing activity hit a record, with 38,000 to 40,000 square meters leased and an average uplift of 9.9% across markets. Commercial Bay's moving annual turnover rose 5.6% to NZD 167.6 million, with 43 lease transactions signed during the year.
Management reaffirmed a NZD 0.0675 per share dividend for FY27, targeting a payout ratio of 80% to 95% of FFO. FFO growth is expected to accelerate from FY28, supported by assets such as 22 Stanley Street, 256 Queen Street, and residential projects like Pillars and York House. The company's weighted average cost of debt stands at around 5%.
Precinct's total assets under management reached NZD 5.2 billion, comprising NZD 4.2 billion in office assets, NZD 500 million in student accommodation, and NZD 200 million in residential build-to-sell assets. Capital partnerships accounted for NZD 2.2 billion, with a target allocation of 25% of invested capital, currently at 10%.
