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Kiwi Income portfolio value drops $51m

Wednesday 24th September 2008

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Kiwi Income Property Trust said the value of its prime office and retail portfolio fell about NZ$51 million in the six months ended September 30.

The trust's manager sought an additional valuation of its assets this year in the face of weakening demand and the fall-out from the credit crunch.

Provided economic conditions don't deteriorate, the trust will pay a cash distribution of nine cents a unit for the year ending March 31. That amounts to an after tax yield of 7.5% for New Zealand investors at current prices, it said.

"We do expect a continuation of the current softening trend in property values," said Sean Wareing, chairman of the trust's manager. Still, the impact on Kiwi Income will be "reasonably contained, given the quality of the trust's portfolio."

Kiwi Income has NZ$2.03 billion of assets including Auckland's Vero Centre and National Bank Centre, and the Majestic Centre in Wellington. The trust's units fell 1.6% to NZ$1.20 today. They are rated 'buy' or 'outperform' by five of seven analysts who follow the trust.

By Jonathan Underhill

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