Kiwi Income Property Trust result up to 30 September

12 November 2014

Kiwi Income Property Trust announces interim result for the six months ended 30 September 2014

Kiwi Income Property Trust today announced its interim result for the six months ended 30 September 2014, reporting an after tax profit of $23.8 million. The reported after tax profit in the prior comparable period was higher, at $61.9 million, due to a favourable fair value change to interest rate derivatives and a one-off deferred tax benefit recorded at that time.

Operating performance
The highlight of the period was a very pleasing result from an operational perspective. Operating profit before other income/(expenses) and tax increased $4.6 million, to $42.1 million, and distributable income2 grew to $40.3 million, up $6.6 million on the prior comparable period.

Chief Executive, Mr Chris Gudgeon, said: “The improved operating performance was a consequence of the completion of a number of development projects and was assisted by continued strong rental growth at Sylvia Park Shopping Centre and cost savings brought about by the recent internalisation.”

Unit Holders will receive an interim cash distribution of 3.25 cents per unit, in line with guidance.

Management made good progress on the key priorities of maintaining high occupancy and extending lease terms. A key highlight was the overall improvement in portfolio occupancy to 98.9%, with pleasing leasing outcomes at the Vero Centre, Auckland and The Majestic Centre, Wellington.

Capital management
The Trust’s financial position was further strengthened over the period through the restructuring of bank facilities on more favourable terms and the successful issue of $125 million in seven-year fixed rate senior secured bonds.

LynnMall redevelopment
The Trust is today announcing a $36 million development to create a new dining and entertainment precinct at LynnMall Shopping Centre.

The current retail offer will be expanded through the development of a new Reading Cinemas multiplex on a 15-year lease, complemented by a new dining precinct called ‘The Brickworks’, and additional specialty retail.

Mr Gudgeon said: “The LynnMall redevelopment is a response to shopper demand and positive growth in the centre’s catchment area. We are pleased to be bringing cinemas back to New Lynn after a 14-year absence.”

Resource consent has been obtained and construction is due to begin in January 2015, with completion targeted for November 2015.

Since acquiring the centre in 2010 for $174 million, the Trust will have invested a further $45 million (including this latest $36 million project), bringing its total investment in the centre to $219 million. The projected value of the centre on completion of this latest value-adding development is expected to be $262 million, with a projected incremental income yield on cost of approximately 7%.

Click here for the full report.

ENDS

© Scoop Media