Property firm profit declines

HAMISH RUTHERFORD
Last updated 05:00 08/05/2012

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New Zealand's only listed industrial property owner says companies are increasingly willing to sign up to new long-term leases but are still able to demand incentives in return.

Property for Industry said in the three months to March 31 its distributable profits were $3.57 million, an 8 per cent fall on the same period a year ago, while rents fell 4.9 per cent to $7.41m.

PFI said it would maintain its quarterly dividend of 1.55 cents a share, payable to shareholders on the register on May 21.

General manager Nick Cobham blamed the fall on property sales, as well as lower occupancy, which stood at 96.2 per cent on March 31, down from 99.4 per cent a year earlier.

PFI negotiated eight new leases or extensions during the period, with its weighted average lease term increasing by six months to 4.34 years.

PFI has 49 properties, all but five of which are in the Auckland region.

Cobham said while there had been a reluctance to commit to long-term leases in recent years, companies were showing increased confidence to commit, although when signing up to leases of a decade or more, the market was typically demanding a month of free rent a year.

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- © Fairfax NZ News

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