Retail landlord posts big first-half profit
Stride Property Group, which spun out its retail portfolio into a separately listed vehicle last year, has posted a 44 per cent gain in first-half profit as growth in management fees and lower costs made up for a decline in rental income.
Net profit rose to $33.3 million in the six months ended September 30, from $23.2m a year earlier, it said on Thursday.
Net rental income fell to $28.7m from $29m while management fee income rose to about $6.5m from $2.3m.
Stride trades as a stapled security on the NZX, comprising one share of Stride Property, which owns a portfolio of property, and one share of Stride Investment Management Ltd (SIML), which manages three portfolios including Stride’s and those owned by Investore Property, the retail property investor spun out into a separately listed vehicle in July 2016.
Stride retained 19.9 per cent of Investore and the close relationship was illustrated this week by the announcement that Stride has sold three Bunnings stores to Investore for $78.5m after renegotiating the terms of the leases. That deal is subject to approval by Investore shareholders.
On Wednesday, Investore said its first-half profit more than tripled to $11.6m, while Stride separately announced a $43m redevelopment to secure a 25-year lease with Waste Management NZ.
The group oversaw some $2.1 billion of owned and managed properties, including Stride’s own portfolio of 29 properties valued at $919m, Investore’s 39 properties valued at $663m and four properties valued at $523m from its Diversified NZ Property Trust.
The property portfolio rose a net 1.7 percent, it said.
“While the previous financial year was one of transformation, the first half of 2018 was most notable for growth in the group’s real estate investment management business,” chairman Tim Storey and chief executive Philip Littlewood said in the interim report.
Stride was previously known as DNZ Property Fund and changed its name in September 2015.