Kiwi Income Property Trust announces full year result

Page 1 of 12 NZX & MEDIA RELEASE 18 May 2011

Kiwi Income Property Trust announces full year result

for the year ended 31 March 2011

Kiwi Income Property Trust today announced its annual result for the year ended 31 March 2011, delivering a distributable profit of $68.8 million, up $7.7 million or 12.6% on the previous year despite challenging economic conditions. After taking into account an $82.4 million unrealised reduction in the value of the Trusts property portfolio and other non-cash adjustments, an after tax loss of $26.4 million was recorded.

Unit Holders will receive a full year cash distribution of 7.00 cents per unit, in line with guidance.

Sean Wareing, Chairman of the Manager of the Trust said, “The Trust continued to deliver solid operating performance with positive growth in rental income from the retail portfolio underpinning the annual result.”

“Net rental income for the year was $137.8 million, up $4.1 million or 3.1% on the previous year. This increase was attributable to the Trust's shopping centre portfolio, with strong performances from Sylvia Park and The Plaza, and a contribution from our latest acquisition LynnMall,” Mr Wareing said.

“The $82.4 million reduction in portfolio value over the past year was mainly attributable to the impact of the February 2011 earthquake on our two Christchurch assets. Independent valuations reflect the uncertainty in Christchurch created by the earthquake, with a $52.1 million reduction in the combined value of Northlands Shopping Centre and PricewaterhouseCoopers Centre. It is important to note, however, that this movement in portfolio value has not adversely affected distributions to Unit Holders.”

“The Trust benefits from the size and geographic diversity of its property portfolio, an attribute which is particularly helpful in times such as these,” said Mr Wareing. The Trust outperformed both the NZX Property Gross Index and the NZX 50 Gross Index over the three and five-year periods to 31 March 2011 and has delivered a cumulative average Total Return1 since inception in December 1993 of 9.4% per annum.

1 Total Return means the return, including unit price movements and the reinvestment of all cash distributions and imputation tax credits. Page 2 of 12 Financial performance [$m] For the year ended 31-Mar-11 Restated1 31-Mar-10
Gross rental income 191.6 186.9
Property operating expenditure (53.8) (53.2)
Net rental income 137.8 133.7
Net interest expense2 (48.2) (47.7)
Managers fees (10.4) (9.7)
Other expenses (2.8) (2.9)
Operating expenditure (61.4) (60.3)
Operating profit before tax 76.4 73.4
Property revaluations [fair value change] (82.4) (74.7)
Interest rate derivatives [fair value change] (11.2) 4.0
Other non-operating items (1.1) (2.7)
Loss before tax (18.3) 0.0
Tax expense (8.1) (8.5)
Loss after tax (26.4) (8.5)
Distributable profit [$m] For the year ended 31-Mar-11 31-Mar-10
Operating profit before tax 76.4 73.4
Non-cash rental adjustments3 1.0 (1.6)
Distributable profit before tax 77.4 71.8
Current tax expense (8.6) (10.7)
Distributable profit after tax 68.8 61.1
Distributable profit after tax [cents per unit]4 7.07 7.59
Financial position [$m] As at 31-Mar-11 Restated1 31-Mar-10
Property assets 1,985 1,849
Total assets 2,113 1,985
Unit Holder funds5 1,043 989
Bank debt to total assets 35.9% 28.8%
Net gearing ratio6 32.7% 24.4%
Net tangible asset backing [per unit] $1.07 $1.22
Distributions [cpu] For the year ended 31-Mar-11 31-Mar-10
Cash distribution 7.00 7.50
Imputation credits 0.88 1.33
Gross distribution 7.88 8.83

ends

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