Big leasing deals push up Precinct revenue, net profit more than doubles

The $1b PwC tower at Commercial Bay. Photo / supplied

Precinct

Listed landlord Precinct Properties has pushed up revenue and more than doubled net profit after tax following leasing successes in its first half-year.

Chief executive Scott Pritchard chief described how revenue rose from $64.6m to $77.8m and net profit after tax rocketed from $24.6m to $53.3m in the half-year to December 31, 2019, compared to the previous half-year.

Net property income was $49.2m, up on the previous $47.3m.

But Precinct revealed how liquidated damages for Fletcher Construction delays finishing Commercial Bay now stood at $50m of which $26.7m had been released to the profit and loss account and $23.3m was precited against the project costs.

Precinct sold Wellington's Pastoral House for $77m in a deal settling in April, kept all its buildings nearly full at a 99 per cent occupancy and made 21 separate leasing transactions on 9760sq m of space which increased revenue.

Commercial Bay's offices are 92 per cent leased and shops are fully leased, up from 95 per cent last year. Shops start opening from next month and offices from April.

But Precinct raised coronavirus as a possible impediment to completing retail fitouts.

"While the retail centre will open fully leased, the centre may open without a small number of retailers who are unable to complete their fitout due to a delay in the delivery of fitout materials as a result of the COVID-19 outbreak," Precinct said.

On Saturday, it said it had leased the top two floors of its $1b Commercial Bay project to a video gaming start-up out of Dunedin.

RocketWerkz topped hundreds of lawyers, accountants, financiers and global businesses by securing the penthouse floors of New Zealand's tallest new office tower on Auckland's waterfront.

RocketWerkz has leased the top two floors of the PwC Tower. Photo / supplied

"It's only money. You can't take it with you," said RocketWerkz chief executive Dean Hall of his firm's surprise leasing the penthouse levels.

That move has trumped the blue ribbon corporate brigade, all will be beneath the whiz kid game developers: giant well-established businesses PwC New Zealand, Chapman Tripp, MinterEllisonRuddWatts, Jarden, DLA Piper, Marsh, Macquarie Bank and Delegat.

"We wanted to make a statement. We're scaling the company up and we're doing to the gaming industry what [Sir] Peter Jackson did to the film industry," Hall said, adding that leasing such premises was a drawcard for new staff.

Precinct shares closed yesterday at $1.88, well up on the $1.45 they were trading around in January.