Precinct Properties profit drops on property devaluations as Auckland tower advances

The $3.2 billion-plus landlord Precinct Properties suffered a bottom-line profit drop after devaluations, but the company is advancing its 56-level Downtown Carpark redevelopment near Auckland’s waterfront.

Net profit after tax fell from $9.2 million in the December 2024 half-year to $2.9m in the December 2025 half-year.

Operating profit before expenses and tax fell from $76.6m to $73.7m, while corporate overheads rose from $2.4m to $3.1m.

Precinct Properties is one of the largest NZX-listed landlords, with a $2.2b market cap.

Devaluations, or the net change in the fair value of investment and development properties, rose from $800,000 previously to $29.3m in the latest period.

But CEO Scott Pritchard told the Herald that the degree of devaluation was a technicality because the Downtown Carpark had been valued as a parking building rather than a more valuable development site.

Funds from operation were a more relevant measure, he said. That fell from $55m to $53.8m.

FY26 dividend guidance was reiterated at 6.75cps, representing a payout ratio of 90-92%.

A target of $4b to $5b of capital partnerships during the next three to five years remains on track.

Significant progress has been made on the Downtown Carpark project in the period with the preliminary design now complete and the developed design underway, Precinct said today.

A substantive resource consent application was lodged under the fast-track consenting pathway in the period and resource consent uplift is anticipated in the next six months.

Negotiations with office pre-commitment occupiers are ongoing for around half the office net lettable area.

Precinct continues to target commitments to stage one in Q4 of the 2026 calendar year.

Its office development on Wellington’s Molesworth St achieved practical completion post-balance date in January.

Main occupier, the Ministry of Foreign Affairs and Trade, has become Precinct’s biggest tenant.

Pritchard said: “The investment portfolio has continued to perform well, delivering underlying income growth.

“While the Wellington market is more challenging, Precinct’s office portfolio has delivered like-for-like funds from operational growth of 3% compared to the same period last year after adjusting for occupancy movements and one-off income,” he said today.

The Commercial Bay retail centre continued to show encouraging progress. Funds from operations were up 2.5% and moving annual turnover was up 6.2%, Pritchard said.

Exceptional leasing progress had been made with 25,000sq m of new office and retail lease deals agreed, including more than 18,000sq m in the Auckland office portfolio.

Occupancy remained at 97%.

The company has transformed itself lately from a solely commercial developer to a solely residential developer.

“But we are planning downtown,” Pritchard said last month of the only new Auckland office project the company has in the wings.

Last year, Precinct finished Beca’s new waterfront headquarters, the $300m Te Paeroa o te Kawau (the shoreline of the kawau).

It also raised $325m in new equity to fund growth.

Precinct’s nine current residential projects and plans are:

Anne Gibson has been the Herald’s property editor for 26 years, written books and covered property extensively here and overseas.