Vacancies, higher interest rates and debt saw half-year net profit for property investor Asset Plus plummet by 88%.

Net profit after tax for the company dropped to $294,000 for the six months ended Sept 30, a steep drop-off from the $2.52 million in the previous corresponding period.

Chair Bruce Cotterill said the past six months were “challenging” for the company, but it managed to secure the “committed but deferred exits” of both 35 Graham Street and the company’s land at Kamo in Whangārei.

“Leasing efforts continue at Munroe Lane and, while we haven’t secured any additional tenant commitments, construction is nearing completion,” he said.

“Prospective tenants have been able to view the campus-style floor plates and see the fundamental aspects of the property, its location and sustainability credentials.”

Cotterill said the company was now also looking to market its property on Stoddard Road for sale in the near term, although the building continued to be 100% occupied.

The board expected to market the property for sale through an open market campaign in the first quarter of 2023.

The sale of Aset Plus’ Christchurch Eastgate shopping centre was successfully settled earlier in the year with $40m of debt being repaid at the end of August.

Asset Plus shareholders also approved the sale of 35 Graham Street for $65m at a special meeting in June 2022  – with a deferred settlement of December 2023.

The half-year’s adjusted funds from operations (AFFO) performance fell to $100,000, down from $2.57m in the corresponding period in 2021.

Higher funding costs and the company’s vacancy of its office block at 35 Graham Street were said to be the reasons behind the profit drop.

Net tangible asset backing was sitting at 44 cents a share as of Sept 30 and bank debt was $48.6m – down from $55.7m in March.

“Independent revaluations were not completed during the period as the Board determined there was no material movement since March 2022,” the company wrote.

Asset Plus said in its earnings announcement that its dividend would remain suspended until “sufficient operating earnings are restored” but would also be subject to a quarterly review by the board.

The company was up 2.4% to 21.5 cents on very light trading when the New Zealand stock exchange opened this morning.