Occupancy rate troubling
Listed real estate investor Argosy Property Trust delivered a half-year result below analysts’ expectations, after its vacancy rates rose to the highest levels the company had seen since 2004.
Argosy has been going through significant changes, having recently internalised its management contract and with a process under way to change its trust structure to an incorporated company.
For the six months to September, it delivered an after- tax loss of $ 19.97 million, down from an after-tax profit of $6m a year earlier.
Argosy appears to be having trouble keeping its 77 buildings tenanted near capacity with occupancy across its diversified portfolio sinking to 93.9 per cent in the six months to September, from 96.8 per cent in March. Goldman Sachs analyst Buffy Gill said this was below the average occupancy levels seen in the property sector.
Argosy is one of only three property companies on the New Zealand Stock Exchange paying out 100 per cent of its distributable earnings to shareholders, along with rivals Kiwi Income Property Trust and Property For Industry.