Strong results for commercial landlord assisted by fair value gains on properties.
Commercial landlord Property for Industry (PFI) delivered a record profit after tax of $452.8 million for the year ended December 31 2021, up nearly 300% on the previous year, helped along by fair value gains on its industrial properties of $392.5m.
It also reached a fully occupied industrial property portfolio, as net rental income and total income rose during 2021.
The NZX-listed firm has reported $94.3 million net rental income for the year to December, increasing more than $10m (12%) from the previous financial year. The company attributes $7.3m of the net rental income increase to acquisition activity over the year.
“We are pleased to announce record annual results following one of our busiest years yet,” chief executive Simon Woodhams said.
The company announced a fully imputed dividend of 2.45 cents a share, with a record date of February 28. The fourth-quarter dividend will take cash dividends for the year to 7.9 c a share, up 2.6% on the previous year.
Strategy progression, a fully occupied portfolio and buoyant market conditions would allow expected dividends of 8.05-8.1c a share this year, it said.
Property for Industry’s net tangible assets per share at balance date were 303.4c, topping $3 for the first time.
Acquisition activity
In January, Property for Industry purchased a property in Avondale Auckland for $39m. In May, it acquired a Wiri property for $91.7m then, in November, a Hawke's Bay property in a sale-and-lease-back for $79.5m. In total, the company acquired six properties over the financial year totalling $226.3m
Property for Industry has nearly 100% industrial and properties mostly based in the Auckland area. The company owns a total of 97 properties with 137 tenants.
The company reached 100% occupation, up from 99.4% year-on-year with only 6.4% of rental contracts due to expire in 2022. The company said this is low and, historically, up to 10% can be due to expire at the start of year.
Property for Industry said with Covid-19 accelerating e-commerce and online sales growth, an additional 230,00sq m of warehouse space will be needed nationally by 2025 to meet demand. The company expects to benefit from this through forecasted rental growth and low levels of vacancy.
The company divides its assets into four focus groups: core generic holdings (79%), brownfield opportunities (10%), assets held for sale (1%), and specialised assets (10%).
Brownfield opportunities and redevelopment will be an increasing focus for the company, with $224m in the category, Woodhams said.
