NZ's Precinct Properties sees drop in portfolio valuation (updated)

Precinct Properties New Zealand

07/07/2023 24:01

(Adds share movement in paragraph 3, analyst comment in
paragraphs 5 & 6)
    By Jaskiran Singh
       July 7 (Reuters) - Precinct Properties New Zealand
Limited  PCT.NZ  on Friday revealed a draft revaluation loss on
its property portfolio of about NZ$250 million ($153.88 million)
compared to a gain of NZ$19 million a year earlier. 
    The forecast valuation move will decrease the value of
Precinct's portfolio to around NZ$3.2 billion at June end, the
company said in a press release.
    The news sent Precinct Properties' shares down about 1.5% to
NZ$1.28 in early trade, underperforming the broader index
 .NZ50  which remained unmoved.  
    "We have continued to see the rising interest rate
environment place increasing pressure on investment returns and
impact property valuations across all real estate sectors," said
Precinct's Chief Executive Scott Pritchard.
    Rohan Koreman-Smit, a senior analyst at Forsyth Barr, said
that we had a period where book values held up pretty well, 
despite share prices falling, because there weren't any
transactions to base the evaluations on. 
    "So what we are seeing now is that book value (of
properties) is catching up with the market implied by share
prices," he added.  
    The owner and developer of inner-city business spaces said
on a like-for-like basis, asset valuations decreased by around
8.6% and 5.3% in Auckland and Wellington, compared with the
latest book values. 
    Similar is the scenario in Australia where real estate
investment trusts (REITs) like Waypoint  WPR.AX , Centuria
Industrial  CIP.AX , Centuria Office  COF.AX , and real estate
firm Dexus  DXS.AX  have all faced declining valuations for
their properties. 
    
    

($1 = 1.6247 New Zealand dollars)

 (Reporting by Jaskiran Singh in Bengaluru; Editing by Shailesh
Kuber)
 ((Jaskiran.Singh@thomsonreuters.com;))