Listed landlord Kermadec Property Fund is paying its shareholders less and has embarked on a plan to sell properties to cut debt.
The company, which owns properties valued at $134.5 million, is cutting its dividend from last year's 8.2c to 7.6c and is trading around 43c, almost half its annual
high.
Distribution levels will be pruned to less than 100 per cent of operating cash flow.
Kermadec reported an annual net loss of $11.93 million in the March year, a big change from last year's $6.18 million profit but the property investor recognised a $12.93 million unrealised loss on the revaluation of its property and a $5 million loss on interest rate swaps.
Distributable profit fell from $5.5 million to $5.1 million but net rental income rose from $9.8 million to $10.6 million. Forsyth Barr senior investment analyst Jeremy Simpson said the result was unsurprising.
"It's a flat performance but it's not too bad given the environment. They have reasonably defensive cash flows and although there's no growth, you wouldn't expect that."
Listed property companies like Kermadec were better investments than property syndications which usually only offered single-asset single-tenant vehicles with a high degree of risk, Simpson said.
Augusta, Kermadec's manager, is one of New Zealand's most active property syndicators.
Chris Francis, Augusta Funds Management director, said Kermadec's revaluations were consistent with overall sector trends.
"The company has sought to balance the reality of reducing values and the need to reduce distribution levels. Factors that will influence future outcomes include further impacts of the current recession globally, the impact on the broader New Zealand economy and tenancy demand.
"Our expectations are for continued challenging market conditions for at least the remainder of this calendar year," he said.
Devaluations in Kermadec's portfolio included:
Finance Plaza podium and carpark, Albert St, Auckland: $49.9 million last March, $48.2 million by March 31 this year.
Brookfield House, Auckland: $26.2 million then, now $24 million.
7 City Rd, Auckland: $20.8 million, now $17.7 million.
Manukau Business Park: $13.6 million, now $12 million.
Coke distribution centre, Palmerston North: $12.4 million, now $10.6 million.
Office building on Cook St/Nelson St, Auckland: $11 million, now $9 million.
Berkeley cinema/restaurant complex, Takapuna, Auckland: $8.2 million, now $7.4 million.
KERMADEC PROPERTY FUND
Year to March 31
Pre-tax profit
2009: $5.1m
2008: $5.7m
Net profit (loss)
2009: ($11.9m)
2008: $6.2m
Distribution
2009: 7.6cps
2008: 8.2cps
Listed landlord Kermadec Property Fund is paying its shareholders less and has embarked on a plan to sell properties to cut debt.
The company, which owns properties valued at $134.5 million, is cutting its dividend from last year's 8.2c to 7.6c and is trading around 43c, almost half its annual
AdvertisementAdvertise with NZME.