ARG - Argosy Property.

[Waltzing]

Its a capital gains tax in any other form and one wonders how Act will square it and how National will explain it to the accounting profession. After all if you HIT comp props what next... where does it start and end.

Dont think ARG will shut shop on this and there could be some strong lobbying that hasnt started yet...

All commercial prop owners may simply up the rents..

[ronaldson]

Last minute buyers at the close today at $1.12 to capture the quarterly dividend. Trades ex-dividend tomorrow so if we are lucky will open at $1.105 but that could be optimistic!

[winner69]

I shouldn’t have joked about ARG at around a buck again ….heading there …but as long as the ATM isn’t broken no worries

[Aaron]

I shouldn’t have joked about ARG at around a buck again ….heading there …but as long as the ATM isn’t broken no worries

If there is a valid argument that ARG has not grown its dividend then why would you accept a 6.427% dividend yield (Gross per NZX today) when you can get over 7% for the bonds on the secondary market?

I had thought that traditionally you demand a higher yield for equity than debt as it carries a lot more risk?

[ronaldson]

Over 1.5m shares traded at $1.16 at market close. I believe it's the extended "Adjust" session today, but a big number and a good price by comparison with recent trading activity!

[ronaldson]

Another "Leasing and general update" announcement. A bit underwhelming, I thought, although under current conditions probably all leasing outcomes are a positive. Apologies for my inadequacies in not being able to post a link as others can.

The NIWA arrangement for an extended lease of space at 82 Wyndham Street seems to be still conditional, and they are vacating a similar amount of space at another Argosy building at Viaduct Harbour which will need to be filled so hard to calculate if it represents rental gain even if there are other positives. While the 105 Carlton Gore Road development has now been completed it doesn't say when the two new tenancies advised actually commence.

We are closing on the half year balance date, 30 September. It will be interesting to understand how the interim valuations stack up, and if NTA has fallen further. The market price per share has reverted to around $1.10. Given the constrained economic/financial situation this country confronts I don't see any election outcome combination being immediately positive for this sector and holders will need to wait on a fall in interest rates, which is hardly imminent, for relief.

[ronaldson]

Well, we now have the interim valuations at half year, 30 September, and a 2.3% decrease on book value with NTA now about $1.52 per share.

By comparison with KPG for the comparable period which has reported a similar decline, 2.4%. Interestingly ARG's office portfolio component recorded a 3.6% decline which contrasts with the 5.8% attributed by KPG. Although these are both "desktop" assessments it may imply credibility to ARG's focus on green property assets in this market and the assertion that in turn such buildings may rent more readily and at higher m2 rates.

Gearing remains at 36%. With the loss of depreciation deductibility and the increase in interest rates, and with hedges running off, the sector is going nowhere fast along with the share price for the foreseeable future.

[ronaldson]

Buyers at $1.09 and Sellers $1.10 is indicative of further share price slippage just now. For the reasons outlined in #707 above not much improvement can be anticipated.

I think the restoration of depreciation deductibility on commercial buildings cannot be realistically expected as a priority in the current economic circumstances, and not much else on the horizon is at all hopeful to turn this around.

I am not even sure the dividend can be maintained in FY25, and likely NTA will continue to fall. We are fortunate dividends are paid as PIE income which helps the yield calculation v non-pie income.

[winner69]

Jeez, 1.055 is pretty low ……esp relative to recent highs

But some might say current price about right?

[kiwikeith]

Jeez, 1.055 is pretty low ……esp relative to recent highs

But some might say current price about right?

The last trade today was 105.5c but the ask was 108c at the close. It will be interesting to see where it opens tomorrow.