Kiwi Income to buy back 20 million units over next 12 months

Wednesday 23rd June 2010

Kiwi Income Property Trust, which has lagged behind the NZX 50 Index this year, said it will buy back up to 20 million of its units in the next 12 months as tax changes and market volatility weigh on their price.

The on-market buyback will start on June 29 and run through until June 28 next year, the property investor said in a statement today.

“Current volatility in global financial markets and the adverse impact of changes in tax legislation” mean there may be “opportunities for the trust to purchase units at prices which will enhance value for unit holders,” said Darren Steinberg, head of property for Colonial First State Global Asset Management.

Units in the trust gained 1.1% to 92 cents on the NZX today and have fallen about 14% this year, about twice the decline of the benchmark index. Fellow property group AMP NZ Office Trust has declined 9% in the same period.

Earlier this month, Kiwi Income said changes in the Budget will result in an estimated $121 million increase in net deferred tax liabilities and income tax expense. That would reduce profit after income tax and unit holder funds though it wouldn’t affect distributions.Chris Gudgeon, chief executive of the trust’s manager, said the buyback will be funded from existing committed bank debt facilities and the units purchased will be cancelled.

Businesswire.co.nz

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