CDL Investments reported a 28% drop in 2025 profit amid subdued New Zealand residential property conditions but advanced major projects and secured fast-track consents. The company expects a tougher 2026 with lower earnings due to ongoing economic and geopolitical uncertainties.
- 2025 profit after tax falls to $11.1 million from $15.4 million in 2024
- Completed Prestons Park development delivering over 1,000 residential lots
- Fast-track consent granted for Arataki Road project, with more applications planned
- Rental income stable with high occupancy in commercial and retail assets
- New Company Secretary appointed; cautious earnings outlook for 2026
Profit Decline Highlights Market Softness
CDL Investments New Zealand Limited (NZX:CDI) posted a 28% fall in profit after tax for the year ended 31 December 2025, reporting $11.1 million compared to $15.4 million in 2024. The drop reflects a subdued residential property market, with sales revenue down to $38.1 million amid cautious purchaser sentiment influenced by cost-of-living pressures and economic uncertainty.
While mortgage rates eased during 2025, they were insufficient to reignite buyer confidence in a market still grappling with high building costs, employment worries, and geopolitical unease. This environment saw many potential buyers adopt a wait-and-see approach, dampening transaction volumes across the sector.
Advancing Major Developments Despite Challenges
Despite the softness, CDL kept its development pipeline moving. The company marked the completion of the Prestons Park project in Christchurch, a long-term initiative delivering over 1,000 residential sections since its inception post-Canterbury earthquakes. Prestons Park’s final sales are recorded in 2026, with an average of 102 sections sold per year over its lifespan.
Further progress was made at Iona in Havelock North, Hawke’s Bay, where staged subdivision consents and infrastructure upgrades continue, and at the Wairakei Road industrial development in Christchurch. Notably, the Arataki Road project in Havelock North secured fast-track consent earlier in 2026, accelerating the usual Resource Management Act process by approximately two years. CDL also plans to lodge fast-track applications for projects in Hamilton and Havelock North before year-end, underscoring its focus on positioning for future demand.
Steady Rental Income and Portfolio Diversification
CDL’s diversified portfolio provided some earnings resilience. Commercial warehouse assets delivered $2.3 million in lease revenue with 100% occupancy and a weighted average lease expiry (WALE) of 4.0 years. Suburban retail centres contributed $0.9 million in lease revenue, leased at 83% with a WALE of 3.8 years. This steady rental income complements the cyclical residential development business and supports cash flow stability amid market headwinds.
Governance and Sustainability Initiatives
The company appointed Abbi Wong as Company Secretary and General Counsel, enhancing governance and legal oversight. On sustainability, CDL voluntarily maintained its Toitū certification for 2025 despite no longer being a mandatory Climate Reporting Entity. The board signalled a measured approach to environmental responsibility, balancing practical business considerations with long-term stewardship.
Cautious Outlook for 2026 Earnings
Looking ahead, CDL expects 2026 earnings to be considerably lower than 2025 due to persistent economic and geopolitical uncertainties that have slowed the early signs of a residential recovery. The company emphasised its strong balance sheet, disciplined capital management, and experienced leadership as key strengths to navigate the downturn.
CDL’s board highlighted the cyclical nature of the property sector and its three-decade track record managing through downturns. The focus remains on securing sales, preserving cash flow, and executing long-term value creation strategies. The fast-track approvals and development pipeline are critical to positioning CDL for an eventual market upturn.
Bottom Line?
CDL’s solid project pipeline and financial discipline provide resilience, but 2026 earnings face headwinds amid ongoing market uncertainty.
Questions in the middle?
- How will geopolitical tensions influence New Zealand’s property demand through 2026?
- What impact will fast-track consents have on CDL’s ability to accelerate sales when the market recovers?
- Can CDL’s diversified rental portfolio offset further softness in residential sales?