KIPT reports strong office demand

Kiwi Income Property Trust has announced an after-tax and expenses profit of $101.3 million for the year ended March 31.

Tuesday, May 20th 2014, 12:00AM

by The Landlord

Distributable income after tax was $76.3 million, up 24.7% on the previous year. Unit holders will receive a final cash distribution of 3.2 cents per unit, taking the full-year cash distribution to 6.4c per unit.

Net rental income was $148.7 million, up $13.2 million on the year before.

Trust chairman Mark Ford said it had delivered an average return of 9.7% since inception 20 years ago.

Chris Gudgeon, chief executive manager, said: “From an operational perspective, net rental income of $148.7 million was up $13.2 million or 9.7% on the previous year, driven by the inclusion of the new ASB North Wharf building into the portfolio, the completion of the Centre Place Shopping Centre redevelopment, the reinstatement of 11 stores at Northlands Shopping Centre and solid rental growth at Sylvia Park Shopping Centre.”

Ford said the Trust was committed to providing secure, reliable investment in NZ property for investors.“For our investors, our goal is to deliver long-term total returns greater than 9% per annum, underpinned by pre-tax distributable earnings growth per unit of at least 2% per annum.”

Gudgeon said: “The strategy we deploy to deliver on our goals continues to have three core pillars. We will maintain a strong balance sheet with conservative gearing. We will intensively manage our property assets to optimise income and investment performance, and will always look to add value through our investment decisions.”

Work is continuing to move the trust to a company structure. Ford said this would offer cost savings and better protections for investors.

KIPT said prospects were good in Auckland and Wellington’s office markets.

“The Auckland CBD office market is favourably positioned with limited new supply and employment growth expected to lead to stronger demand for office space, rental growth and lower vacancy rates. Despite the relatively weaker demand outlook, the Wellington office market has been assisted by a low level of new supply and the withdrawal of several buildings for refurbishment or conversion to non-office uses.”

It also today released a revised copy of its distribution reinvestment plan, which provides unit holders with the chance to reinvest distributions wiuthout paying transaction costs. It has been operating for 10 years and the key terms have not changed.

Minor variations have been made to reflect the internalisation of the mangement of the trust.

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