Kiwi Trust deal is likely

Friday 26th January 2001

By Chris Hutching

The unit price of Kiwi Income Property Trust eased slightly this week as the market digested the valuations contained in a Pricewaterhouse-Coopers appraisal report on a scrip bid for Kiwi Development Trust.

The appraisal report says the offer of three KIP units for each KDT unit it does not own is fair.

The report presented no surprises although one analyst expressed surprise at the valuation of the KDT property based on what he considered a relatively high rental yield of 9.7%.

He said the unit price eased slightly to 91c mid-week as investors considered the small dilutionary effect of the takeover and the valuations of the companies.

KIP already has 39.22% of KDT, a company it set up to raise money to develop the Royal & SunAlliance Centre. Setting up a separate investment vehicle was an expedient way of raising capital without affecting KIP's balance sheet and tax status.

With the building about 80% leased and the development phase receding, KIP is buying or investing in the building via the KDT takeover.

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