Precinct Property profit up 67pc

NZX-listed property investor Precinct Properties has reported a 67 per cent jump in after-tax net profit to $39.5 million for the six months to December.

Precinct shareholders will receive a second-quarter dividend of 1.35 cents per share plus an imputation credit.

The latest financial result is up from the $23.6m recorded for the same period the previous year.

Precinct chief executive Scott Pritchard said the good start to the year flowed into an important time for the company to focus on optimising its investment portfolio, designing the Downtown Shopping Centre in Auckland, preparing non-core assets for sale, and providing office space for Government departments based in Wellington.

"These results put us in a good position to continue a strategy of focusing on key assets, driving new leasing and progressing the development opportunities we have built up in the portfolio," Pritchard said.

Improved occupancy rates in Auckland plus recent property purchases contributed to a 22 per cent increase in net operating income for the period of $32m, up from $26.2m in 2012.

Its seven-strong Auckland property portfolio includes the PwC Tower, the ANZ and AMP centres and Zurich House.

Improved occupancy - it sat at 97 per cent across the portfolio - was matched by market rental growth, with leasing transactions and market reviews in Auckland secured on average at a 6 per cent premium to June 30 valuations.

"We have been anticipating Auckland market rental growth for some time and it is pleasing to now see this coming through," Pritchard said.

"With no significant vacancy within the Auckland portfolio we expect this trend to continue."

In Wellington, the two big earthquakes last year contributed to a further increase in market awareness of the seismic performance of Wellington's CBD office stock with increasing demand for strong, quality buildings.

The company has 10 properties in Wellington including the State Insurance Tower, No 1 The Terrace and Vodafone on the Quay.

After the earthquakes the company engaged Holmes Consulting Group to undertake comprehensive inspections of all its Wellington buildings. No material damage to their structural integrity was found.

Precinct Property claims to be the country's only specialist listed investor in premium CBD office buildings. It has net property income of about $120m, about 8000 investors and more than 300 clients.

Fairfax Media