Less spectacular property revaluations pushed NZX-listed real estate specialist Property For Industry's full-year net profit down 36 per cent, from $176 million to $113.5m.
Property valuations did not rise as fast last year as they had in 2019, which affected the bottom line and revenue also fell.
"A $72.5m fair value gain on investment properties, as compared to a $125.2m fair value gain in the prior year, was the main contributor to this reduction in profit," the business said in its result for the year to December 31, 2020.
Yet the company also said it produced a "robust" result in testing times, the business had borrowed an extra $50m from the Commonwealth Bank of Australia and got that extended until March next year.
Craig Peirce, chief financial and operating officer said: "Our portfolio revaluation uplift has made the company more valuable. At the same time, we have shored up our ability to access cashflow to continue to secure quality industrial properties in line with our strategy."
PFI had properties valued at $1.47 billion in 2019 but that rose to $1.63b last year. Contract rent rose from $84.9m to $89.8m.
"Around one-third of this valuation outcome was due to rental growth, which in part reflects the successful leasing outcomes," PFI said.
Low interest rates are contributing to rising demand for industrial property investment that continues to outstrip supply, resulting in movements in yields or cap rates that contributed the remaining two-thirds of the increase in value, it said.
The company sold $157.8m of property in the last year and invested $182.9m in core industrial property. It was also increasing its Auckland weighting.
PFI owns 95 properties leased to 149 tenants.
Shareholders will get more: "Robust results, a strong balance sheet and forecast rental growth result in a lift in 2021 dividend guidance to 7.85 to 7.90 cents per share."
Shareholders got 7.6cps in 2019 but 7.7cps last year.
The company has a market capitalisation of $1.4b, is trading around $2.88, up 34c in the last year.
Earlier this month, it said it had sold a mixed-use Parnell property for $110m. The Carlaw Park property was last valued in December at $102.4m.
Last month, it also confirmed the settlement of 670-680 Rosebank Rd, Avondale.