One of New Zealand's largest listed property companies has benefited from rising sector confidence, today announcing a potential $100 million gain on its asset values.
Clive Mackenzie, Kiwi Property chief executive, said draft property portfolio valuations would deliver an expected fair value gain of that amount, up 3.1 per cent for the half-year to March 31.
The company's mixed-use, office, retail and other properties would be worth $3.3 billion after confirmation of the asset valuations. Kiwi owns New Zealand's biggest shopping centre. Sylvia Park at Mt Wellington has around 10ha of indoor floor space when the main mall and the lifestyle centre across the road are combined.
It has 5000 car parks on the site, making that New Zealand's largest too.
Mackenzie said it was pleasing to see values rise after the stabilisation of trading conditions.
"While Covid-19 continues to impact the sector, the outlook is far more positive than it was when valuations were last undertaken in September 2020, especially with the
vaccine rollout now underway," he said.
"Encouragingly, recent transaction evidence suggests investor confidence has returned to the property markets, allowing valuers to remove material valuation uncertainty clauses across many of our assets," he said.
The company's mixed-use portfolio includes Sylvia Park, the lifestyle centre opposite, LynnMall and The Base in Hamilton. That sector of investments enjoyed a fair value increase of about 2.4 per cent or $38m to stand at $1.6b.
The weighted average capitalisation rate for these assets has firmed four basis points to 5.79 per cent, Kiwi said.
But offices proved the best, up 5.4 per cent or $52m to reach a new valuation of $1b. Kiwi's commercial assets include the premium Vero Centre on Shortland St in Auckland's CBD.
The real portfolio's valuations fell 1.7 per cent or $8m to $461m.
Kiwi shares are today trading around $1.25, up 38c in the last year. The company has a market capitalisation of $1.96b so the shares are trading at a significant discount to the asset value.