Argosy Property's half-year net profit rose 50 per cent on the back of strong revaluation gains, rising from $76 million last year to $114.5m this year.
Gross rental income increased from $50.2m to $53.3m and the company, which recorded $50.7m revaluation gains last year, was able to book $79.7m this year. Most of those, or 68 per cent, came from Auckland properties. Industrial buildings added $44.1m of the revaluations.
Net distributable income for the six months to September 30, 2020, rose 21.5 per cent.
Chief executive Peter Mence said although the financial year started under challenging economic conditions, the company had worked closely with tenants to help them.
Argosy completed 25 leasing deals on 55,997sq m in the half-year, making seven extensions, 10 renewals and striking eight new leases.
Argosy has $1.9 billion total assets with 34 industrial buildings, 16 office buildings and five large-format stores.
The business has made 16 interim insurance claims for material damage and business interruption for the year and says it is working with insurers on resolving these claims.
"Claims have been submitted for business interruption costs - loss of rents, additional costs and claims preparation - totalling $15.1m. The main component of this is loss of rents $14.3m and no further claims in respect of loss of rents are expected," a statement said.
"The total claimed for material damage to September 30, 2020, is $50.7m. These costs relate primarily to urgent reinstatement works required to make damaged levels of the building available for reoccupation and were not able to be agreed with insurers in advance. Further claims will be made in respect of additional reinstatement works as costs are incurred," it said.
Argosy had recognised payments from insurers of $24m for interim claims.
"Of these, $10.9m has been allocated to reinstatement of earthquake damage, $1.8m to expense recoveries and $11.3m to loss of rents," it said.
The company expects to pay 6.45c a share as a full-year dividend, up 1.6 per cent based on current projections.
Its total bank debt facility was $660m, up from $585m in March.
Argosy said it had a good portfolio of diversified assets.
"The business has proved resilient and is well-positioned to deliver a solid second-half performance. Our third green bond issue in October was well received, reflecting the continued interest in our transition towards greening the portfolio," it said.
The $76m acquisition of the Mt Richmond Properties announced in October would give good long-term capital growth and earnings sustainability.
"We are confident of delivering on the remaining focus areas over FY21, including leasing up the balance of 7 Waterloo Quay in Wellington," it said.
Chairman Jeff Morrison said the company had made a strong start to this year despite the challenging operating conditions and a cloudy economic outlook.
New Zealand, like all other countries affected by Covid-19, continues to manage through uncertain times with the economic impact likely to continue for some time, he noted.
Shares in the company with about 9000 investors are trading around $1.43, up from 76c in late March when many share prices plummeted due to the pandemic's effects and fear in the share market.