Friday 13th May 2011
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Kermadec Property Fund reported a 13% increase in its full year distributable earnings to $3.84 million, with management fees, general administration costs, and normalised interest expense all lower.
Asset sales and higher leasing incentives for the year to March 31 led to a drop in net rental income to $6.7 million from $9.2 million in 2010, Kermadec said today.
Total assets were down to $102.4 million at year end from $120.1 million at March 2010, due to the sale of non-core properties. Independent valuers lifted the value of investment properties by $720,000.
Liabilities dropped from $56.4 million to $38.5 million due to the repayment of $14 million of bank debt, and a $2.63 million fall in unrealised losses on interest rate swaps.
Overall property occupancy was 91% at March 31, down from 94% a year earlier, mainly because of the sale of fully leased properties.
The property market continued to show a gradual recovery, with Auckland in particular showing a firming in values and a rise in demand, Kermadec said.
The sale of non-core property and debt repayment had strengthened Kermadec's financial position with debt gearing below long term target levels, the fund said.
The development of an inner-city supermarket at Kermadec's Finance Centre property in Auckland was significant for the fund in securing a long term lease from a nationally recognised talent. It was expected to create strong demand for adjacent tenancies including at a food court.
The distribution level would be left unchanged at 4c per share for the quarter to the end of June.
Net profit was $4.85 million, compared to a loss of $2.62 million the year before, affected by the modest gain on revaluation and the reversal of deferred tax liability relating to building revaluations.
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