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Works begin at Sylvia Park, funding sought

By Chris Hutching

Friday 8th October 2004

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One of the largest new retail developments in the country will soon be under way after Kiwi Income Property Trust received resource consent from Auckland City Council for its $580 million Sylvia Park town centre development.

Chief executive Angus McNaughton said that the 80,000sq m of old army sheds used by car dealers and other tenants for storage had been vacated over the past three months. Kiwi Income and its agents are now seeking expressions of interest from potential retail tenants.

The 24ha development will be completed in stages, the first being $30 million allocated for infrastructure and earthworks. At the same time, Kiwi Income is talking to potential funding partners because of the large amount of capital required, which would significantly affect the company's conservative gearing. A joint venture partner is being sought to share the risk of the project and avoid requir ement for a capital raising from existing shareholders. A likely partner will be one of the Australian fund managers and property trusts recently active in New Zealand such as Multiplex.

The Australian company has a construction subsidiary which is finalising costs of Sylvia Park for Kiwi Income.

It also has a development division and recently set up the Multiplex NZ Property Fund, available to investors on both sides of the Tasman.

It recently made a bid the other half of Australian-based Ronin Property Group it does not own. Ronin has 30% of AMP NZ Property Trust and 50% of its management company.

Forsyth Barr share analyst Jeremy Simpson recently rated the stock "accumulate" and valued the shares at $1.12 (the market price is $1.09) allowing for a discount on the $1.14 per share asset backing.

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