Kiwi Property's shopping centres fall in value for a second year but offices rise

Tuesday, 2 April 2019

Kiwi Property is spending $223 million on expanding Sylvia Park, New Zealand's biggest shopping centre.

The value of shopping centres has dropped but office buildings have climbed at New Zealand's largest property company on the sharemarket, Kiwi Property.

It was a similar story to last year for the big property company when several shopping centres fell in value and office buildings rose.

Kiwi's total portfolio of properties rose 1.5 per cent, by $47 million, to $3.2 billion for the year to March 31 2019, after an independent revaluation.

Its retail assets- large shopping centres- fell in value by $28m or 4.5 per cent to $598m.

Kiwi says its ASB North Wharf building on the Auckland waterfront has risen 9.6 per cent in value to $230m.

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Those worth less included The Plaza in Palmerston North which fell by $6m to $207m, Northlands Mall in Christchurch which lost $15m in value to be worth $247m and the Centre Place North shopping centre in Te Rapa, north Hamilton which fell by $7m to $54m, the biggest drop of 11.5 per cent.

The value of The Plaza shopping centre in Palmerston North has fallen by $6 million to $207m in a revaluation by its owner Kiwi Property.

Last year Kiwi sold North City mall, a large shopping centre in Porirua, for $100m.

Office buildings, however, rose 6.3 per cent, by $53m, to $893m in the March 31 2019 year.

A strong performer was ASB North Wharf, an award-winning seven-level building developed by Kiwi for ASB Bank. It rose in value by 9.6 per cent, $20m, to $230m. That was the highest percentage rise in the office portfolio.

In Wellington, 44 The Terrace lifted 7.9 per cent to $54m while the Vero Centre in Auckland rose 5 per cent, $22m, to $450m.

Chief executive Clive Mackenzie said the company had benefited in the March 2019 year from a strong investment market and robust international capital flows.

This year Kiwi had changed its asset classification to recognise its strategy of intensifying the development of some properties to create mixed-use communities.

It had a new classification, the mixed-use category, which included assets that were strategically located in high population centres, close to town centres or key transport links and had potential to develop a variety of uses including residential, retail, commercial, entertainment, hotel and civic.

The assets were Sylvia Park and LynnMall in Auckland and The Base in Te Rapa. Last year these would have been classed as retail assets.

They were worth $1.53b, $20m more than last year, a rise of 1.3 per cent.

Late last year Kiwi paid $25m for a 22,000 square metre site on Carbine Road in Mt Wellington, across the road from Sylvia Park, for future mixed-use development..