Shoppers at Sylvia Park, owned by Kiwi Property Group. Photo: RNZ/ Marika Khabazi
Kiwi Property Group has reported a big loss as the value of its portfolio was dented by the weaker property market but the company saw record rental income.
The large retail and diversified property investor is best known for owning the country's largest shopping centre, Sylvia Park in Auckland.
Key numbers for the 12 months ended March compared with a year ago:
- Net loss $227.7m vs $224.3m profit
- Revenue $259.1m vs $255.9m
- Property devaluation $352.6m vs $128.8m gain
- Operating profit $129.6m vs $116.5m
- Final dividend 5.7 cents per share vs 5.6 cps
[Ll] Net rental income $203.7m vs 178.8m
The company's net rental income increased by 13.9 percent, driven by the strong performance of Sylvia Park and helped by the release of Covid-19 rental abatement money which was not needed.
Chief executive Clive Mackenzie said the decline in the value of its investment portfolio was disappointing but not surprising, given the property cycle and economic headwinds.
"By continuing to drive sales, grow rents and diversify our income streams, we will help mitigate further valuation decreases and encourage a faster recovery as the market improves."
He said it was also continuing its transition from a retail and office landlord to a developer of mixed-use town centres.
"While this transition will take time, we achieved a robust operating performance over the past year, while simultaneously reshaping our portfolio and moving the business closer to our goal of becoming a developer, owner and operator of mixed-use assets at metropolitan town centres."
The company's property portfolio was almost fully leased at the end of the financial year, with occupancy at 99.3 percent.
Kiwi Property said Sylvia Park and The Base in Hamilton were the most resilient assets to the downward economic pressure, with value decreases of 1 percent and 2 percent respectively over the six months ended March.
"The relative resilience of our key mixed-use assets highlights the strength of these flagship properties and the merits of our mixed-use strategy overall," Mackenzie said.
Looking ahead to 2024, Kiwi Property said maintaining "strict financial and operational discipline" would be key to its performance.
"Managing our balance sheet will be an ongoing priority as we navigate the volatile economic environment and the downward pressure it is placing on commercial property values," company chair Mark Ford said.
The company provided a dividend guidance of 5.7 cents per share for 2024.