Kiwi Property is positioned for growth and development

Monday, 19 November 2018

Kiwi Property is focused on the $223 million expansion at Sylvia Park, called Galleria.

Big real estate owner Kiwi Property has almost completed rebalancing its property portfolio to Auckland and says it is ready for more developments and 'considered' acquisitions.

New Zealand's largest property company on the New Zealand Stock Exchange reported a half-year after tax profit of $48.3 million for the six months to September 30, 2018, up almost one per cent on the previous half-year's $47.9m.

Company chairman Mark Ford said the difference was mainly due to the loss of income after the sale of The Majestic Centre in Wellington and North City Shopping Centre in Porirua.

'Over the past several years, we have been actively rebalancing the composition of our property portfolio in favour of greater exposure to Auckland, the nation's economic powerhouse.

**READ MORE:

Kiwi Property has rebalanced its property portfolio to have almost 70 per cent in Auckland. Sylvia Park shopping centre is one of the largest.

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* Sylvia Park expansion leads to hints of new international retailers**

'The sale of non-core assets to achieve this strategy has predictably resulted in lower rental revenue in the short term, but has placed us in an even stronger position to pursue growth opportunities for long-term benefit,' Ford said.

A key project for Kiwi Property is the expansion of Northlands Mall in Christchurch.

'The portfolio is strongly positioned, with our rebalancing programme almost complete,' chief executive Clive MacKenzie said.

The value of its portfolio was $3 billion with 69 per cent in Auckland.

The company was in the position to focus on growth through developments and considered acquisitions, while keeping debt levels conservative, he said.

For the rest of the 2019 financial year, Kiwi would concentrate on completing and advancing developments at Sylvia Park in Auckland and Northlands in Christchurch, and on zoning issues at Drury where it plans to develop a town centre to expand the existing one.

The company continued to have an occupancy ratio of 99.3 per cent, supported by a high quality tenant mix.

New leasing and rent reviews in the six months had lifted rents 3.8 per cent.

MacKenzie said the company had its hands full with $385m of developments - $140m of projects nearing completion and another $245m underway.

The company increasingly saw the importance of developing and owning complementary mixed use commercial properties like those at Sylvia Park and Drury.

MacKenzie said Sylvia Park, Drury, Lynn Mall and The Base in Hamilton all had substantial land offering development potential for hospitality, office buildings and residential accommodation.

These developments would drive more productivity and value from the properties.

He said internationally a lot of traditional retail was moving to this mixed-use model.

Kiwi had not developed residential property but could do that through a joint venture or with a third party specialist, he said.

The dividend for the half-year is 3.475 cents a share, 1.5 per cent higher than the previous half-year and it will be paid on December 19. The cash dividend for the full year ending March 2019 was expected to be 6.95c a share.