Argosy Property

[Waltzing]

what if the OCR goes to 2 by end of next year in share panic.... share? get that...

[Basil]

I can foresee the OCR at 2% in early 2026 and it staying low for a VERY long time.  Apart from the dairy industry and a few select other primary industries the rest of the economy has been in deep recession for more than 5 years since Covid hit.  That's a dreadful situation that the RBNZ must stimulate the economy to extricate itself from.   If that involves a little more inflation than what's ideal, I reckon so be it.

REIT's just in the very early stage of a multi year upcycle in my opinion and a far safer and higher yielding investment than many other parts of the market.  Love the tax free PIE quarterly returns with tax capped at 28% that I would otherwise be paying 39% tax on.  That's an 11% tax saving !

[SuperMario]

what if the OCR goes to 2 by end of next year in share panic.... share? get that...

2 OCR announcements left this year, could even be 2 by end of this year? Get the holiday and summer period pumping.

[Basil]

2 OCR announcements left this year, could even be 2 by end of this year? Get the holiday and summer period pumping.

I agree 100%, that's what is really needed to lift the economy out of its multi year malaise.

[Waltzing]

gosh 2 percent by early 2026... now that would be very very interesting.. on the Ai modelling side we just moved to the latest anthropic models and to use a non technical term they are smooth compared to the older rather go off into the wilds models.... another technical term..Putting arg back through it now... and will be sending the result to the usual suspects... remember that movie...

off topic: but we will run all the arg financial reports in the project documents back through AI this weekend.

here what the market is saying ...from the horses mouth.. remember it depend what patterns you give it follow and we found the error handling and edge cases to be catered for not as this reports.

"Based on the web search, here's what developers and users are saying about Claude Sonnet 4.5:
Strong Consensus - "Best Coding Model"
Multiple sources confirm it's considered the best coding model currently available, with particularly strong performance on complex, long-horizon autonomous coding tasks Claude Sonnet 4.5 is probably the "best coding model in the world" (at least for now). It scored 77.2% on SWE-bench Verified (82% with extended thinking), and leads the OSWorld benchmark at 61.4% compared to 42.2% just four months ago Claude Sonnet 4.5 is probably the "best coding model in the world" (at least for now).
Speed Advantage
In head-to-head testing, it completed comprehensive code reviews in about 2 minutes versus 10 minutes for GPT-5 Codex Vibe Check: Claude Sonnet 4.5. Developers note it's faster, more steerable, and less overeager than previous Claude versions Vibe Check: Claude Sonnet 4.5.
Critical Nuance - Not Perfect
However, GPT-5 Codex still beats it for some difficult production coding tasks, catching hard-to-find edge cases that Sonnet missed Vibe Check: Claude Sonnet 4.5. One developer found Sonnet finished faster but was brittle, while GPT-5 Codex took longer but added proper error handling, edge cases, and tests Claude Sonnet 4.5 vs GPT-5-Codex: what real developers say | by Open Data Analytics | Sep, 2025 | Medium.
Autonomous Work Capacity
The model can work autonomously for up to 30 hours during trials, building applications, standing up database services, purchasing domain names, and performing SOC 2 audits Anthropic launches Claude Sonnet 4.5, its best AI model for coding | TechCrunch.
Pricing & Availability
Pricing remains the same as Sonnet 4 at $3/$15 per million tokens, and it's available immediately as a drop-in replacement Introducing Claude Sonnet 4.5 \ Anthropic."

[Basil]

Kiwibank, ASB and Westpac economists imploring RBNZ to be bold and cut by 50 bps next week.
https://www.goodreturns.co.nz/article/976524924/how-bold-will-the-rbnz-be.html?utm_source=GR&utm_medium=email&utm_campaign=%5BBREAKING+News%5D+Westpac+in+negotiations+to+change+adviser+remuneration

[Waltzing]

must by why gmt move up the last 2 days... the RBNZ probably does not understand what the word recession means after all it went on a green shots hiring spree for the last few years and had new painting of trees commissioned and the Chief numbers man went of a travel spree to the US ...  then disappeared....

He was here for the good times and when they appeared to disappear after the fact ... numbers changed... he disappeared....

ARG sitting ready to move... up? up and ...

[Basil]

https://www.goodreturns.co.nz/article/976524932/leaders-property-sector-helps-drive-nz-stocks-higher.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+3+Oct+2025

Excerpt: "Price expected the property stocks to show dividend growth because their financing costs were expected to fall, as swap rates had fallen sharply".

[winner (n)]

No pay rise again this year ,,,,divie remains the same as pcps.

It least it didn't go down

Don't these guys get it ...cost if living going up

Betcha management got a pay rise

[seaweed]

No pay rise again this year ,,,,divie remains the same as pcps.

It least it didn't go down

Don't these guys get it ...cost if living going up

Betcha management got a pay rise

You could go to the AGM and ask for a divi rise. NTA up 3c to $1.56. They seem to be steady as she goes coming out of a recession. 

[Basil]

Argosy Property Limited ('Argosy' or the 'Company') has reported its results for the six months to 30 September 2025.

KEY RESULTS FOR THE PERIOD:

• Net property income for the period of $61.2 million, which is up by 4.9% on the prior comparable period.
• $31.3 million interim revaluation gain for the six months to 30 September, up 1.5% on book value, compared to a gain of $8.7 million in the prior comparable period.
• Net profit after tax of $61.1 million, compared to a net profit after tax of $33.0 million in the prior comparable period.
• Net distributable income of $30.7 million, up 11.7% on the prior comparable period.
• Occupancy steady at 96% and a Weighted Average Lease Term (WALT) of 5.4 years, up from 5.1 years at 31 March.
• NTA per share of $1.56, up from $1.53 at 31 March.
• Portfolio gearing at 35.9%, comfortably within the target band of 30-40%.
• Very strong rent review outcomes (4.1% annualised rental growth on rents reviewed).
• Progress on green developments, continuing our portfolio transformation and progress to a 50% green portfolio by 2031 (37.6% at 30 September, including 224 Neilson Street).
• Election of Alex Cutler as a Director at the recent Annual Meeting.
• FY26 full year dividend guidance of 6.65 cents per share reaffirmed.

My thoughts.  This is a very solid result given the very deep recessionary environment.
Rent reviews in particular stood out as being well above the inflation rate.
Great to see the dividend is back under 100% of AFFO, now 97%, was 105%.
Prospects for modest increases in dividends in the years ahead more or less in line with inflation, look sound.
Net tax free yield of 5.4% at the current price plus 1.6625 cps back as a tax free dividend next month.
I think they have weathered the worst recession in decades very well indeed.
Happy holder.

[Cod]

To my mind this is one of the most important "take aways" from the results and obviously applies to all companies in this space.

The Government has recently announced positive reforms to the earthquake-prone building system, which introduce a more risk-based, proportionate approach. Key changes include excluding low-risk areas such as Auckland from the requirements, and allowing Councils to extend remediation deadlines by up to 15 years. Many buildings in low-risk areas will be removed from the register, and remediation deadlines are now more flexible, reducing unnecessary compliance costs.

Removing unnecessary costs combined with the boost tax program should lead to short term profit upgrades.

The impact of this new (boost Tax policy) has been minor for Argosy in the interim period. However, practical completion of Warehouse A at 224 Neilson Street was achieved in October 2025. As such, an estimated Investment Boost deduction of $5.7 million will be available for this development in the second half of this financial year, with a tax effect of $1.6 million.

[Basil]

Betcha management got a pay rise

Administration expenses were $5.6m for the half year, the same as the previous year.
Be happy mate, we've been paid well throughout all the years of the worst recession in decades.  That's not the case for many landlords I know who have faced increased vacancy level's and much reduced income while carrying the can for rates and insurance on vacant properties leading to significantly reduced net income..  Bottom line, Income being the same for ARG shareholders in a deep protracted recession is a WIN !

From the presentation:-
Outlook
 OUTLOOK IS MORE POSITIVE
 • The domestic economy is expected to gradually improve and there is a significant recent improvement in leasing enquiry.
 • Restrictive interest rates have eased.
 • Insurance premiums are falling as the global insurance market softens.
 • Investment Boost is a positive initiative to encourage development.
 • The strong bottom up fundamentals of the Industrial sector will continue to underpin top line growth.
 • Tenant focus on sustainable initiatives and prime locations is positive for Argosy.
 • Argosy is well placed, with a sound capital position, to continue operating as a green & environmentally sustainable business.

[winner (n)]

Interest rates on the rise

NZ 10 year now 4.6% and back to where it was a year ago

Won't help the ARG (and others) share price even though zillions of term deposit money supposedly looking for a home

[Basil]

10 year govt stock up 20 bps in recent months but a fall from $1.30 to $1.23 has  boosted the gross yield for 33% taxpayers 50 bps from 7.6% to 8.1%.
Fall looks overdone to me.