21 May 2018

Kiwi Property's net profit falls with drop in valuation gains

11:36 am on 21 May 2018

Kiwi Property has made a strong full year underlying profit, with increased rental income driven up by recent development and purchases.

The Sylvia Park shopping mall in Auckland

Kiwi Property says the expansion of Auckland's Sylvia Park is a major focus. Photo: Supplied

New Zealand's largest property company's net profit fell 16 percent to $120.1 million in the 12 months ended in March, largely reflecting a 35 percent drop in valuation gains, over the year earlier.

However, the underlying profit, which excludes the valuation gains, rose 8 percent to $111.3m, including a 5 percent lift in net rental income to $192.1m.

"Supportive economic and property market fundamentals, in combination with the robustness of our property portfolio provides us with confidence the company will continue to deliver a strong financial performance," said chair Mark Ford.

Total revenue fell 4 percent to $277.8m.

The company said the quality of its investment portfolio improved with the sale of non-core assets, strategic purchases and $370m of development projects underway.

Chief executive Chris Gudgeon said the expansion of Auckland's Sylvia Park was a major focus.

"Our balance sheet remains strong with gearing reducing to 29.7 percent as at March 31, down from 34.5 percent in the prior year," he said.

The company's $3.1 billion investment portfolio was 99.6 percent occupied at year's end, with an weighted average lease term of 5.3 years.

The result included the $123m sale of Wellington's Majestic Centre, while the $100m sale of Porirua's North City would settle in the current year.