Argosy profits pushed up by $7.5m

The former Defence House building at 5 Stout Street, Wellington, owned by Argosy Property.

Giant NZX listed landlord Argosy Property, with real estate valued at $1.2 billion, pushed up half-year profit by $7.5 million.

In Argosy's previous half-year to September 30, it made $30.1 million net profit after tax but has just announced that it pushed that up to $37.6 million in the current half-year.

The portfolio's value also increased 2 per cent or $24.9 million.

Argosy did not pay full tax last year because it had losses to offset after its internalisation, converting from a trust to a company, but this half-year it paid $5.2 million tax.

Net property income was $43.8 million for the half-year (previously $40.3 million), up 8.7 per cent on the previous interim period.

Interest expense was $12.6 million for the half-year, down $300,000 due to lower debt.
Read Argosy's latest financial presentation here:

Argosy redeveloped its big Wellington office block at 15-21 Stout St, which the Ministry of Business, Innovation and Employment leases.

It is spending $40 million upgrading its NZ Post House, work due to be finished in late 2016. It bought that block for $60 million and expects an end cost of $100 million.

"During the interim period, the redevelopment of Argosy's building at 15 Stout Street in Wellington was completed and officially opened, with the Ministry of Business, Innovation and Employment moving in from July 2014. The leasing to MBIE was part of the new accommodation strategy for the Crown, managed by the Property Management Centre of Excellence.

"The upgrade of the New Zealand Post building, also in Wellington, is continuing with the expectation that this upgrade will be completed by late 2016."

The business outlined its strategy in a results presentation in the interim result.

"The first six months of the year have been a busy and exciting time for Argosy. Our focus remains on adhering to the strategy, maintaining the portfolio's high level of occupancy, reducing near term lease expires and improving tenant retention rates. We will also continue to look for opportunities to develop the portfolio in line with our strategy," it said.

Total shareholder return - share price appreciation and dividends - was 14.6 per cent, outperforming the NZX 50 Gross Index and the NZX Gross Property Index for the 12 months to September 30.