Kiwi Property delivering on FY26 strategic priorities

Monday 24th November 2025

Text too small?

Net rental income: $102.0m (+7.0%)

Operating profit before tax: $62.9m (+11.5%)

Net profit after tax: $9.8m (-77.3%)

Adjusted funds from operations: $51.9m (+7.2%)

Net tangible assets per share: $1.12 (-2.2% from FY25)

Interim dividend: 2.80 cents per share (+3.7%)

Key highlights:

• Strong leasing momentum: ASB North Wharf lease extended to 2040, Vero Centre occupancy up to 94.3%, and Resido (build-to-rent) now 99% leased.

• Establishment of the Mackersy Large Format Retail Fund (seeded with Sylvia Park Lifestyle) is expected to release at least $53 million in capital.

• Conditional sales of Drury land to Costco, Rebel Sport/Briscoes, and Harvey Norman means around 77% of large-format retail land at Drury is now conditionally sold, with total sales proceeds of $115 million to be received in FY27-FY29.

Kiwi Property has announced its interim results for the six months ended 30 September 2025 (HY26), with Chair Simon Shakesheff noting that this result “highlights a robust business performance and demonstrates the strength of our strategy as broader economic conditions begin to stabilise.”

Clive Mackenzie, Kiwi Property’s CEO, added that the “portfolio continues to deliver solid net rental income growth, up 7.0% for the half-year and supported by the now-complete lease up of Resido.” Operating profit before tax increased by 11.5% to $62.9 million, reflecting income growth and disciplined cost management. Net profit after tax was $9.8 million (down 77.3%), which included an unrealised fair value loss of $30.3 million during the period, compared with an increase in the prior period. AFFO increased by 7.2%, driven by the uplift in operating profit.

As at 30 September 2025, the total Kiwi Property portfolio was valued at $3.3 billion, incorporating a fair value movement of -0.9% since 31 March 2025. Net tangible assets were $1.12 per share, reflecting a decline of -2.2%.

Progress on strategic priorities

At the beginning of the financial year, Kiwi Property announced four strategic priorities intended to create value for shareholders. Strong progress has been made across each area:

1. Manage the balance sheet and free up additional capacity

“Maintaining a strong and flexible balance sheet is fundamental to our strategy”, Mackenzie noted. “We continued the dividend reinvestment plan which funded our business-as-usual capital expenditure requirements, while reducing total capital expenditure by 49% compared to the prior comparable period. This has allowed us to keep gearing relatively stable at 38.5%, up 0.1% from March 2025.”

Following the investment into the property funds management business Mackersy Property in November 2024, Kiwi Property announced on 10 November the establishment of a large format retail fund that will be managed by Mackersy Property. The fund will be seeded with Sylvia Park Lifestyle (the large-format retail property adjacent to Sylvia Park shopping centre) and Kiwi Property expects to maintain an interest of up to 50% over the life of the fund. The initial sale of Sylvia Park Lifestyle into the fund is expected to release at least $53m in funds to Kiwi Property.

The pro forma impact of this transaction reduces gearing to 37.5%.

2. Continue to drive rent growth

Despite a weak economy and a challenging leasing market during HY26, Kiwi Property delivered strong leasing outcomes across the portfolio, with total rental growth, including new leasing and rent reviews, of +3.5% [Note 1].

Office new leasing spreads were +3.4%, supported by the ASB lease extension and Mixed-use new leasing spreads were +3.2% [Note 1].

“These results underscore the enduring appeal of our assets and the effectiveness of our leasing strategy in subdued market conditions. We are focused on ensuring our centres and office assets remain the destinations of choice for tenants, allowing us to maximise rental growth,” said Mackenzie.

3. Maintain strong discipline on costs

Kiwi Property remains strongly committed to controlling costs and delivering operational efficiency. Through disciplined management and a culture of continuous improvement, employment and administrative expenses were down by 5% against the same period last year, when normalised for costs associated with the lease extension at ASB North Wharf and other one-off transaction costs.

To reduce interest costs, Kiwi Property has increased bank debt facilities by $135m and used these proceeds to refinance the KPG040 green bond series which matured recently. Mackenzie noted that “when combined with a lower interest rate environment, our weighted average interest rate has reduced from 5.30% in March this year to 4.89% as at 30 September.

These outcomes reflect the ongoing benefits of our cost initiatives and our focus on delivering value for shareholders.”

4. Progress sell-down of Drury large format retail sites

Unlocking value from our Drury development remains a key strategic priority and major focus for the business.

Shakesheff commented: “We are pleased to confirm that additional land sales have been achieved, with the total large-format retail (LFR) land conditionally sold at Drury now around 77% of the LFR precinct.” Proceeds from the land sales are expected in FY27-FY29.

Strong leasing progress across the portfolio

The extension of ASB’s lease at ASB North Wharf during HY26 was a significant milestone, with the lease extended for a further nine years through to 2040. The lease extension at the award-winning, seven-level office building in Wynyard Quarter provides long-term income security and highlights the strength of Kiwi Property’s partnership with ASB.

Strong progress on leasing space at the Vero Centre has also been made, with occupancy now at 94.3% (up from 92.4% at the end of FY25), with just under two floors remaining to be leased.

The initial leasing campaign for Kiwi Property’s flagship build-to-rent (BTR) development, Resido at Sylvia Park, is now complete. As at 30 September Resido was 99% leased, in line with the original 12 to 18-month lease-up target. Mackenzie said that “this result validates the product offering and the attractiveness of well-located, amenity-rich rental accommodation.”

Mixed-use sales marginally up with prospects for growth ahead

Sales (+0.2%) and foot traffic (+1.1%) across the mixed-use portfolio were marginally up in the twelve months to 30 September 2025, with stronger sales in the second half (+1.0%) signalling positive momentum.

Mackenzie said “sales appear to be recovering with catalysts for further growth expected, including interest rate cuts flowing through to consumer spending and the highly anticipated opening of IKEA adjacent to Sylvia Park in early December. The opening of IKEA is expected to act as a significant drawcard to the precinct. A short walk via a pedestrian walkway between IKEA and Level One of Sylvia Park will provide for the seamless integration of the two sites.

We anticipate that the opening of IKEA will drive additional consumer activity and reinforce the long-term value proposition of Sylvia Park.”

Three conditional LFR land sales in October

The Drury development continues to gain momentum as a key driver of long-term value for Kiwi Property.

Confirming the conditional sale of 6.4ha to Costco Wholesale, a major international retailer, was pleasing and this will serve as a catalyst for further development and growth at the site. This sale, along with conditional sales to Rebel Sport/Briscoes and Harvey Norman, will provide capital for reinvestment and, together with the recent Stage 2 Fast-track approval, validates the strategic vision for Drury as Auckland’s next major metropolitan centre.

Mackersy loan converts to equity; first fund to be established

Last year’s investment into Mackersy Property has created value for Kiwi Property shareholders. The business has made strong progress over the last 12 months and increased earnings to meet the targets in the convertible loan agreement. This will result in the conversion of the original loan to equity in early December, at which point Kiwi Property will own a 50% shareholding in the investment management business, which currently has $2.2 billion in assets under management.

Mackenzie noted that: “We are very pleased with this progress and the strong working relationship we have with the Mackersy Property team. The strategy behind our investment in Mackersy Property was to support the growth of Kiwi Property by providing us with a new source of capital. The recently announced Mackersy Large Format Retail (LFR) fund, with Sylvia Park Lifestyle as the seed asset, offers us a potential future source of capital to develop LFR assets across existing KPG sites, providing us with greater balance sheet flexibility.”

Some of the proceeds from the Mackersy LFR Fund will be used to fund key smaller-scale developments, including the new Pedestrian Plaza and addition of an Asian supermarket at Sylvia Park, and the further development of Level One at The Base.

Regulatory tailwinds supporting sector growth

Recent regulatory developments have provided a welcome boost for Kiwi Property and the property sector as a whole.

The proposed changes to seismic regulations announced in September have the potential to reduce expected remediation costs and provide greater certainty for asset owners. Kiwi Property in particular is likely to benefit, given the concentration of its assets in Auckland, where the Government intends to remove the earthquake-prone building regime entirely. The changes are still to be legislated.

Dividend guidance confirmed

“We remain committed to growing sustainable returns for shareholders. Consistent with the guidance provided in our FY25 annual results, we confirm our FY26 full-year dividend guidance of 5.60 cents per share [Note 2]. This is expected to be within our target payout range of 90% to 100% of year-end AFFO. We will pay a cash dividend of 1.40 cents per share for the second quarter of FY26 on 19 December 2025, taking the interim cash dividend payment to 2.80 cents per share,” said Mackenzie.

Positioned for growth

For the remainder of FY26 and beyond, Kiwi Property is well positioned to benefit from improving economic conditions and the continued execution of its strategy.

“Our high-quality asset base, strong tenant relationships, and disciplined approach to capital management provide a solid foundation for long-term value creation. We are excited about the opportunities ahead, including the opening of IKEA at Sylvia Park in early December, further progress at Drury, and continued improvement in operating conditions for our assets,” Shakesheff concluded.

Additional information

Kiwi Property has today also released an Interim Report and Interim Results Presentation, which are available for download on the company’s website, kp.co.nz, or from nzx.com.

ENDS

Comments from our readers

No comments yet