Listed industrial landlord Property For Industry it will hit up investors for $49.5 million for acquisitions and developments after more than doubling its first-half profit.

Profit rose to $36.4m in the six months ended June 30, from $14.4m a year earlier, the Auckland-based company said.

Operating revenue was little changed at $32.1m, with the bulk of the bottom line gain coming from a $25.6m fair value gain on investment properties.

Property For Industry, which merged with Direct Property Fund to create an $800m industrial property empire in 2013, said it had secured $86 million in acquisition and development activity.

To fund that, the company will tap shareholders for $49.5m via a one-for-12 rights offer, at $1.44 per share and fully underwritten by Forsyth Barr. The shares fell in opening trading, down 0.7 per cent to $1.54.

“In the current market, securing prime industrial property accretive to shareholder returns continues to be a challenge given the dearth of high quality assets available and the intensity of competition to acquire,” the company said.

“Despite this, PFI has successfully completed a number of acquisitions since the start of 2015 which have enhanced earnings and provided PFI with “core” industrial property in key locations.”

Distributable profit, which adjusts for fair value gains, slipped in the six month period to $15m, from $15.6m a year earlier, as operating expenses rose 18 per cent to $15.3m.


By Suze Metherell