By Jenny Ruth
Tuesday 18th May 2010 |
Text too small? |
Auckland International Airport appears to have made good progress on its two key growth engines, the unregulated retail, including carparking, and property revenue streams, leaving its core business well-positioned, says Geoff Zame, an analyst at Craigs Investment Partners.
"Property development activities, focused on its about 440 hectare (about $250 million) landbank, are stepping up with the creation of seven specialised precincts within the airport business district that are designed to better showcase development opportunities for realtors and prospective tenants," Zame says.
"The retail strategy has included investment in retail and information management systems while the recently completed airside duty-free area demonstrates the opportunity to lift retail spend per passenger, particularly once phase four is completed by the end of calendar 2010," he says.
Zame is now expecting international passenger growth of 6% in the year ending June 2012, up from 5% previously, which reflects expected visitor arrivals for the Rugby World Cup.
He has raised his valuation 3% to $2.39 a share, although his 12 month target price is $2.15, "reflecting our more cautious stance following the North Queensland Airports acquisition and concerns over the near-term international passenger outlook," Zame says.
"We would view any share price weakness under $2 as an opportunity to accumulate, given the broader economic recovery now underway."
BROKER CALL: hold.
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