Property For Industry pushes profit up 36%

Property For Industry owns big warehouses like this one in Manukau. Photo / PFI

The largest listed landlord specialising in industrial property has reported a strong result, pushing up profit 36% in a market with strong demand.

In the half-year to December 31, 2024, Property For Industry increased revenue 7% and revaluations, which had been -$4.1m, turned into a $16.6m gain.

Net profit after tax rose 36% from $21.1m to $28.7m.

The result highlighted stability of the company’s industrial property portfolio and disciplined execution of its strategy, it said.

Positive leasing outcomes within the core portfolio, supported by the completion of redevelopment and lower interest rates supported steady earnings, operating cash flows and dividends.

With PFI’s property valuations showing signs of recovery, and enough balance sheet capacity to support the company’s development pipeline, the outlook for earnings and cash flows would be supported by realising rental growth from the core portfolio, it said.

Property For Industry, with $2.1b of real estate, owns more than 90 properties leased to about 150 tenants.

It was formed in 1993 and has been listed since late 1994.

A cash dividend of 8.5cps is projected for the full 2025 year, up 2.4% on the 2024 full-year dividend.

About 86,900sq m or 13% of the company’s portfolio by rent was leased during the interim period through five new deals and eight renewals.

Negligible incentives were required to secure leases.

More than 49% of contract rent was reviewed, varied or leased during the interim period.

Remaining FY25 fixed reviews amounting to 25.9% of contract rent are due to deliver an average increase of 5%, the company said.

Fifteen properties, representing about 25% of the portfolio by value, were revalued at the end of the interim period, resulting in a fair value gain on those properties of $16.6m.

The valuation rise was attributable to realised rental growth and the completion of development projects at 30-32 Bowden Rd in Mt Wellington and Stage 1 of 78 Springs Rd in East Tāmaki.

The portfolio is 98.7% occupied and after the interim result date, the company signed a deal with Portacom on empty space in Manukau’s 212c Cavendish Drive. That would lift occupancy to 99.09%.

The company is buying a 5600sq m site at 316 Neilson St, Penrose, for $8.5m.

This is next to existing properties on the same street.

When it settles the new property, the company will have around 5.7ha of heavy industrial zoned real estate in one of Auckland’s key industrial precincts, it said today.

The company released an optimistic outlook.

“With signs of recovery emerging in the valuation of PFI’s $2.1bn industrial property portfolio, and careful application of strategy, PFI is well placed to navigate the remainder of FY25,” it said.

Anne Gibson has been the Herald’s property editor for 25 years, written books and covered property extensively here and overseas.