Argosy Property Limited Analysis

Overview

Argosy Property Limited initially joined the NZX in December 2002 as the Paramount Property Trust, following a public offering of 25.3m units at $1 each. Since then Argosy has grown to be one of the largest diversified property investment vehicles listed on the NZX, and undergone a number of changes in its management structure.

Prior to management internalisation in August 2011, Argosy was managed by entities controlled by the Symphony Group, ING and most recently ANZ. In August 2011 Argosy's shareholders voted to buy the management rights, and adopted a company structure in February 2012. These transactions have moved Argosy from an externally managed unit trust structure to its present, simpler, company structure.

After property sales to manage debt levels during the global financial crisis, in December 2012 Argosy announced an institutional placement and share purchase plan which raised $100m of capital to fund the acquisition of two Wellington investment properties. In July 2013 Argosy announced an underwritten renounceable rights issue which raised a further $80m of capital to maintain debt levels within its target range and fund future acquisitions in accordance with its portfolio investment strategy.

Argosy published its portfolio investment strategy in its 31 March 2013 annual report. The strategy identifies key features of properties that Argosy will seek to acquire, and sets target bands for the mix of its diversified retail, industrial and commercial property portfolio.

Performance

The following information was extracted from Argosy Property Limited's half year results, released 20 November 2024:

Key results for the period include:

• Net property income for the period of $58.4 million, which is flat on the prior comparable period.
• $8.7 million interim revaluation gain for the six months to 30 September, up 0.4% on book value, compared to a loss of $50.8 million in the prior comparable period.
• Net profit after tax of $33.0m (including the $8.7 million revaluation gain), compared to a net loss after tax of $(19.3) million (including the $50.8 million revaluation loss) in the prior comparable period.
• Net distributable income of $27.5 million, down 6.9% on the prior comparable period (note this period has incurred incremental tax expense of $1.4 million, following the Government’s removal of tax deductions for depreciation on buildings).
• Solid portfolio metrics, with occupancy at 95.8% and WALT of 5.0 years.
• NTA per share of $1.46, up from $1.45 at 31 March 2024. • Portfolio gearing steady at 37.2%, comfortably within the target band of 30-40%.
• Successful portfolio leasing and rent review outcomes, including 2.6% annualised rental growth on rents reviewed.
• Progress on green developments, continuing our portfolio transformation and progress to a 50% green portfolio by 2031 (36.7% at 30 September).