Kiwi Income Property boosts underlying earnings amid tough commercial market
Kiwi Income Property Trust, the owner of Auckland’s Sylvia Park shopping centre, posted a 3.9% increase in first-half distributable earnings as the global recession continues to loom over the property sector.
Distributable profit rose to $29.9 million in the six months ended Sept. 30, from $28.8 million a year earlier, as it grew revenue 6.9% to $95.5 million and maintained its occupancy rate at a “healthy” 98.5% with a weighted average lease term of 4.2 years.
“The office market has got a little bit adrift,” said Craig Brown, who helps manage the equivalent of $3.3 billion worth of assets at ING NZ. “For their rental revenue to be secure, they need their tenants to be in good shape” which can’t be taken for granted in the current environment, he said.
The trust made a net loss of $18.1 million for the period, an improvement on its $31.3 million loss a year earlier, after the fair value of its property portfolio declined $65.8 million to $1.83 billion.
The company said it had undertaken a raft of measures to strengthen its balance sheet over the past year, including a $50 million institutional placement in April, and its bank debt stood at $557 million at Sept. 30, down from $634 million in March.
Kiwi Income retained its forecast of a full-year distribution of 7.5 cents per unit.
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