Asset Plus half-year profit up 450% on revaluations

Plans for the new Albany Auckland Council northern service centre. Photo / supplied

NZX listed property specialist asset plus enjoyed $8.8 million revaluation gains on its real estate, pushing up half-year profit 450 per cent from $2m to $11.5m.

In the six months to September 20, 2020 revenue fell from last year's $6.9m to $6.6m but revaluation gains, recorded as nil last year, came in at the high number.

That pushed up pre-tax profit from $2m to $12m and when $647,000 income tax was recorded, resulted in net profit after tax rising from $2m to $11.5m.

Bruce Cotterill, chairman, said the last six months has been an active period for the company.

"We were focused on securing the Munroe Lane development which is a key milestone for this company," he said of that $142m Albany scheme where work has started off Oteha Valley Rd and where Auckland Council will establish its new northern service centre.

"This was facilitated by the successful capital raise and new funding structure. In addition, the impact of Covid-19 on the retail portfolio required us to provide increased support for our tenants," Cotterill said.

The cash dividend was reinstated at an annualised rate of 1.8cps.

Covid hit rental income of the business which owns shops and offices.

"During the six month period ending September 30 2020, rental abatements and relief [was given] to the value of $540,000. In addition, some of the abatements and relief are classified as lease modifications," notes to accounts said.

The company owns the Eastgate Shopping Centre in Christchurch, a block of Mt Roskill shops which include The Warehouse, the Albany development project, 35 Graham St in Auckland's CBD and a Whangarei property at Kamo which it bought in July.

The Graham St office block is valued at $57m, Eastgate $47m and the Mt Roskill shops at $38m.

All up, its properties are valued at $153m.

Portfolio occupancy is 98 per cent and the $60.2m capital raise and $130m restructured bank facility were noted in today's statements from Cotterill.

"Asset Plus has clear objectives of increasing the scale of its portfolio and setting a strong platform for sustainable growth moving forward. The equity raise, along with the restructuring of our bank facility provides the necessary funding to complete the Munroe Lane development," Cotterill said.

Icon is now building that multi-level structure.

Asset Plus also owns an inner-city office building occupied by council staff at 35 Graham St.

Cotterill said the potential redevelopment also fitted within the company's strategy to add value.

"The property has considerable potential for a re-positioning and the future development feasibility and scope of works is well underway. It represents a unique opportunity within the Auckland office market," he said.

The lease to the council finishes next June and a leasing campaign has begun to fill it once the council staff leave.

The company is managed by Augusta, taken over recently by Australia's Centuria Capital. Management fees charged were listed as $381,000, down from $396,000 in the previous corresponding period.

Asset Plus is trading at 33c, up from 30c last October, and has a market capitalisation of $121m, making it the smallest listed real estate vehicle in this country.