Stride Property Group has lifted its full year net profit by almost half, even as falling rents across its buildings underline how tough the past year has been for New Zealand’s listed landlords. The result, reported for the 12 months to the end of March, shows a company leaning harder on the fees it earns managing other people’s property as the income from its own buildings shrinks.
The group booked a net profit of 31.3 million dollars, up from 21.7 million a year earlier. That headline jump flatters the underlying picture, because reported profit for property companies swings sharply with the paper value of their buildings from one year to the next. The figure investors watch more closely, distributable profit, rose a more modest 2 percent to 49.1 million dollars, according to RNZ. Stride held its full year dividend at 8 cents a share and signalled the same payout for the coming year.
The softer story sits underneath. Net rental income, the rent Stride collects from tenants after the costs of running its buildings, dropped to 58.9 million dollars from 69.1 million the year before. The company put the fall down to the sale of the Silverdale Centre north of Auckland and a restructuring of its industrial property fund, along with higher vacancy and the cost of re-leasing buildings it has been repositioning. In plain terms, Stride has sold assets and reshuffled others, and the rent has not yet caught up.
What is filling the gap is the group’s investment management arm. Stride is unusual among New Zealand’s listed property names because it runs an internal funds management business alongside owning buildings directly. It manages a stable of unlisted property funds spanning large format retail, industrial, office and diversified holdings, and clips a fee for doing so. That fee income climbed 12 percent to 22.9 million dollars over the year as the pool of assets under management grew. The pivot matters because fee income is steadier than rent and does not tie up the same amount of the company’s own capital.
On the ground the portfolio held up better than the rental line suggests. Occupancy across Stride’s buildings stayed at 94 percent, and the company recorded rental growth of 2.3 percent on new leases and rent reviews over the year. Those are not boom numbers, but in a market where plenty of office and retail space has sat empty, they point to a portfolio that is still leasing rather than emptying out.
Stride also used the year to repair its balance sheet. Its loan to value ratio, the slice of the portfolio funded by debt, fell to around 34 percent, helped by the asset sales. Lower gearing gives the company more room to fund new projects without leaning on shareholders for fresh capital, and matters a great deal for a property business when borrowing costs are high. The company completed close to 94 million dollars of developments in its industrial fund over the year and has committed to a further 70 million dollars of projects, while pushing ahead with a long term redevelopment at North Wharf on Auckland’s waterfront.
Stride struck a cautious note on the year ahead. It told the market that near term conditions remained uncertain, with inflation and a softer leasing market weighing on confidence, and said its focus would be on lifting income through repositioning its portfolio and developing new space rather than counting on the wider market to lift it. The 8 cent dividend guidance for the new financial year signals the board expects steady rather than rising returns.
The result lands in a property sector still working through a painful adjustment. New Zealand’s listed landlords spent 2025 nursing falling building values as interest rates stayed high and tenants drove harder bargains on rent. The mood has lifted a little. ANZ’s monthly business outlook survey jumped 21 points in May, and optimism about the economy has climbed to levels not seen in more than a decade. But the relief is uneven. The Treasury expects headline inflation to peak near 4 percent in the June quarter, lifted by higher fuel prices flowing through from the conflict in the Middle East, and some economists have brought forward their picks for when the Reserve Bank might start lifting the official cash rate again. For property companies that borrow heavily and live or die on the gap between rents and interest costs, the timing of any move on rates is the number that counts.
For Stride, the year shows a company managing the squeeze rather than escaping it. Selling buildings and growing the fee business has steadied the result and trimmed the debt, but the shrinking rent roll is a reminder that the easy money in commercial property has not returned. The detailed numbers were filed with the market through the NZX and broken down by BusinessDesk.
What do you make of Stride’s strategy of trading buildings for fees, and where do you think commercial property is heading as the economy turns? Share your thoughts in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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