The $2.5 billion listed landlord Precinct Properties has given $10 million in Covid support to its many tenants since the pandemic's outbreak early last year, making it one of New Zealand's hardest hit businesses.
The property investor - with shut and struggling Commercial Bay retailers and restaurants - told today's annual meeting how deeply costly the pandemic had been.
The commercial landlord owns the billion-dollar Commercial Bay with its new PwC Tower but shops and a major restaurant, the New York-founded Saxon + Parole, shut because of the pandemic.
Scott Pritchard, chief executive, told the meeting: "Precinct have provided support through a range of relief packages including rental abatements. Since the pandemic started, this has totalled financial support of circa $10 million.
"Since our annual results in August, the impacts of Covid-19 have been felt across New
Zealand with the country experiencing prolonged lockdowns and various levels of
restrictions," Pritchard said.
The company was seeing how the extended lockdown and prolonged restrictions were affecting the biggest city.
"Businesses have had it tough. The length and uncertainty of the lockdown and restrictions are resulting in heavy financial impacts and sadly, business closures for some," he noted.
Precinct engaged with its occupiers early on with an approach of providing support
to those suffering significant losses and facing financial hardship, he stressed.
"While support has mainly been provided to our retailers and hospitality food and beverage operators, Precinct will continue to support all occupiers in our portfolio who need it. We understand just how stressful the immediate impacts have been and for many,
are still being felt," Pritchard said.
Precinct's dividend policy was to pay out all adjusted funds from operations (AFFO) as dividends, with the retained earnings being used to fund the capital expenditure required to maintain the quality of Precinct's property portfolio.
"While our AFFO, which adjusts for several non-cash items, has been impacted by the lockdowns resulting from Covid-19, Precinct is committing to maintaining a FY22 dividend to our shareholders of 6.70 cents per share despite this," Pritchard said.
Maintaining long term sustainable returns and a payout ratio of approximately 100 per cent funds paid out to shareholders remained its target in the coming year.
The company says it is New Zealand's only listed city centre specialist investing predominantly in premium and A-grade commercial office property, only in Auckland and Wellington.
It owns Auckland's HSBC Tower on Quay St (previously called the PwC Tower), AON Centre, Jarden House, Deloitte Centre, 204 Quay St, Mason Bros. Building in the Wynyard Quarter, nearby 12 Madden St, 10 Madden St.
In Wellington, it has the AON Centre, NTT Tower, Central on Midland Park, No. 1 and No. 3 The Terrace, Mayfair House, Charles Fergusson Building, Defence House, Bowen House and the Freyberg Building.
The company also owns Generator NZ which is an office landlord which offers shorter-term leases than in other parts of its portfolio.
Generator has 13,600sq m of space across in eight locations in Auckland, most prominently around the Britomart and Wynyard Quarter.
The company reported its full-year profit in August, saying then its portfolio was valued up by $282.9m, helping push up net profit by 411 per cent.
Operating income before expenses also rose from $105m to $127.7m in the year to June 30, 2021, although the business did acknowledge the pandemic's effects on a leasing business which runs events and shops in its new $1 billion Commercial Bay site.
Precinct owns properties valued at $3.3b, up from $3b last year.
Last year's $35.1m net profit rose to $179.9m, with the unrealised valuation gains significantly boosting the bottom line.
Shares are trading today around $1.60. down 8.5 per cent annually at the company with a market cap of $2.5b.