Sharechat Logo

Kiwi Income well placed for retail recovery

Thursday 12th August 2010

Text too small?

Property investor Kiwi Income Property Trust told investors today that it is well positioned to capitalise on New Zealand’s recovery - when it happens.

The trust said at its AGM that it sees early signs of this turnaround already, with property values stemming their losses to 0.5% in the last six months versus 14% over the last two years, and expects the consumer space to lead the charge as unemployment falls. 

“This is expected to initially benefit the retail sector as domestic consumption recovers and the trust is well positioned in this regard with 60% of our portfolio sitting in shopping centre assets,” said Kiwi Income chairman Sean Wareing. 

The trust had an annual net loss of $12.4 million, after the value of its property portfolio shrank 3.9% or $74.7 million.

The trust is less gung-ho about its prospects in the office market, which accounts for 37% of its portfolio. Auckland and Wellington are expected to see a significant amount of new office development over the next three years, and the trust anticipates that this will steadily weaken rents until 2013. 

Auckland’s vacancy rates are at 13.3%, and Wellington’s is 6.1%.Vacancy rates within the trust’s portfolio currently sit at 5%. 

Wareing said the year ahead still posed significant challenges, chief amongst these being economic volatility, higher interest rates and tax costs. 

The 2011 distribution outlook for shareholders looks weaker after an increase in the number of units on issue subsequent to the conversion of the 2005 mandatory convertible notes. 

Cash distribution for the year ending March 31, 2011, is projected to be 7 cents a unit, representing an after tax yield of around 7.5% per an annum for domestic investors at current unit 

Shares in Kiwi Income were last trading 1.1% down, at 93 cents.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Kiwi Income Property Trust
Kiwi Income sells Queen St building to Australian firm
Kiwi Income Property may need to sell assets or raise equity to exit management contract
Kiwi Income manager stays mum on internalisation proposal, sees retail, Auckland office improving
Kiwi Income manager mulls Commonwealth Bank proposal to internalise contract
Kiwi Income Property sees smaller payout in 2014 as annual earnings fall 15 percent
Kiwi Income Property first-half pretax earnings fall 16 percent
Wellington's commercial property market to remain subdued: KIP
Kiwi Income Property Trust
Write-downs hurt Kiwi Income Property Trust but 1H distributable profit rose 9.1%