Precinct Properties NZ & Precinct Properties Investments Ltd Analysis

Overview

Precinct is the largest owner, manager and developer of premium inner-city real estate in Auckland and Wellington. Precinct is predominantly invested in office buildings and also includes investment in Generator, Commercial Bay retail, third party capital partnerships, and a multi-unit residential development business. For information visit: www.precinct.co.nz

Precinct was originated as AMP NZ Office Trust, which was floated and listed on NZX under the symbol of APT since December 1997. In November 2010 it changed its legal structure from a unit trust into a corporate. The company name was changed to AMP NZ Office Limited (ANO) at the same time. In September 2012 the company's name was changed to Precinct Properties New Zealand Limited, with the ticker code PCT.

On 1 July 2023, Precinct effected a restructuring to create a stapled group structure. A stapled group comprises two listed parent companies whose shares are held by the same shareholders in equal proportions. The shares in each parent company can only be transferred or dealt with together. Shareholders in Precinct Properties Group (“Precinct”) hold an equal number of shares in Precinct Properties New Zealand Limited (“PPNZ”) and Precinct Properties Investments Limited (“PPIL”) and these shares can only be dealt with together. The stapled issuers are described as “Precinct Properties NZ Ltd & Precinct Properties Investments Ltd (NS)” on NZX systems and the ticker code for the stapled shares remains PCT.

Precinct’s investments and income that qualify for the purposes of Portfolio Investment Entity (PIE) status (such as long-term holding of commercial real estate assets) will mainly be undertaken by PPNZ and its subsidiaries, while investments and income that do not qualify for PIE status (such as management income and operational businesses) will mainly be undertaken by PPIL and its subsidiaries.

Performance

The following information was extracted from Precinct Properties New Zealand Limited's Half Year Results, released 26 February 2026:

Performance summary for the six months ended 31 December 2025

Financial summary

• Investment property funds from operations of $69.2 million (1H25: $72.7 million), up $1.2 million after adjusting for one-off income (note 1).

• Total comprehensive income after tax of nil (1H25: $3.2 million).

• Funds from operations (FFO) of 3.18 cps (1H25: 3.47 cps).

• Net tangible assets (NTA) of $1.18 per stapled security (FY25: $1.21).

• FY26 dividend guidance remains at 6.75 cents per stapled security.

• FY26 FFO guidance remains at 7.30 to 7.50 cents per stapled security.

Operating performance

• Portfolio occupancy of 97% (Jun-25: 97%) and 6.1 years weighted average lease term (WALT) (Jun-25: 6.0 years).

• Momentum continuing in the Auckland office leasing market, underpinning 10.3% growth in contract rents in the office portfolio.

• Over 25,000 square metres of new lease deals concluded in the half, materially above recent years.

• Molesworth Street office development achieved practical completion.

• Committed to second student accommodation project at 256 Queen Street, taking the total number of beds under development to 1,602 over two sites.

Funding initiatives position Precinct to execute growth strategy

• Successfully raised $325 million of new equity, providing growth capital and ensuring Precinct maintains a balanced approach to gearing and liquidity.

• Settled Amora hotel and, post balance date, settled InterContinental Hotel and 22 Stanley Street with the proceeds used to repay bank debt, taking gearing as at 31 December 2025 to 33.7% on a pro forma basis.

Capital partnering update

• Post balance date, committed to acquire ASB North Wharf for $205 million through Precinct’s investment partnership with global institutional investor, GIC.

• Precinct is in exclusive negotiations with a global institutional investor to form a 50:50 joint venture to acquire PwC Tower, Auckland’s premier premium office tower.

• Process underway to secure a capital partner for 256 Queen Street; market conditions remain favourable.

Downtown Car Park development update

• Significant progress has been made in the period with preliminary design now complete and developed design underway.

• Procurement process has advanced with entry into an early contractor involvement (ECI) arrangement anticipated in Q1 CY2026.

• Negotiations ongoing for around 50% of the office NLA.

• A substantive resource consent application has now been lodged with the Environmental Protection Agency under the ‘Fast Track’ consenting pathway.

• Settled the acquisition of Downtown Car Park.