20 May 2019

Kiwi Property makes $138m net profit for the year

11:41 am on 20 May 2019

Kiwi Property has reported a strong full year underlying profit, as it continues to reinvest in its Auckland retail and office properties.

The Sylvia Park shopping mall in Auckland

Sylvia Park shopping centre, part of Kiwi Property's portfolio, is undergoing a $35 expansion. Photo: Supplied

The large property investor's net profit rose 15 percent to $138.1 million, in the 12 months ended in March, driven by a $47.6m gain in value of its portfolio.

Revenue rose 3 percent to $286.3m.

Underlying profit from rental income of $106.9m was down 4 percent on the year before, reflecting the sale of two non-core assets as part of the rebalancing of its portfolio, which gave greater weight to Auckland properties.

The company said the proceeds of the sale had been reinvested into its flagship Sylvia Park retail and office complex in Auckland, which was undergoing significant development.

"During the year, we delivered our first office building at Sylvia Park, 'ANZ Raranga' (formerly known as No.1 Sylvia Park) and the dining development, Langdons Quarter, at Northlands in Christchurch," chief executive Clive Mackenzie said.

"We completed the first of two new multi-level carparks at Sylvia Park, and construction activity for the arrival of a new Kmart store, together with our major Sylvia Park galleria retail expansion, is well in train."

Mr Mackenzie said it was increasing the scope of galleria retail development at Sylvia Park by $35m to a total of $258m to accommodate key tenants.

He said the company had reorganised the executive team to align the business with its growth opportunities.

"These opportunities include intensifying our large landholdings by developing mixed-use communities, growing income from existing assets and establishing a team to investigate funds management opportunities," he said.

Kiwi Property will pay a full year dividend of 6.95 cents per share, which was in line with guidance and up from 6.85 cents the year before.

It expected to pay a full year dividend of 7.05 cents a share in the current year.

The company's property portfolio was valued at $3.2 billion, with an occupancy rate of 99.3 percent, and an average lease expiry of 5.2 years.