Kiwi Property Group says it has paid $25 million for an industrial property opposite the Sylvia Park train station.

The currently vacant property at 43 Carbine Road in Mt Wellington is on a 22,086 square-metre site with existing warehousing and yard facilities.

Kiwi chief executive Clive Mackenzie says the site has potential linkages to the Sylvia Park shopping centre and is zoned mixed-use under the Auckland Unitary Plan.

"While we have no immediate plans for the site beyond leasing the existing premises to make use of the warehousing and yard facilities on site, this acquisition will provide future mixed-use opportunities at Sylvia Park," Mackenzie says.

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Sylvia Park is New Zealand's largest shopping centre and Kiwi's flagship property. It accounted for almost a third of the firm's $3.04 billion portfolio at March 31.

Kiwi Property chief executive Clive Mackenzie. Photo / Dean Purcell.
Kiwi Property chief executive Clive Mackenzie. Photo / Dean Purcell.

Kiwi is continuing to develop the centre and surrounding area as a mixed-use development encompassing retail, office and industrial properties – it recently completed an $80m office tower in the precinct.

The shares last traded at $1.385, and have decreased 1.4 per cent so far this year.

New Kiwi chief executive Clive Mackenzie said last month that $140 million of property development work by the firm was nearly completed.

Around $10m to $20m is being spent on a seismic upgrade of LynnMall, he said.

Kiwi's net profit for the six months to September 30 was $48.3m, up slightly on the previous corresponding period's $47.9m.

Net rental income dropped from last year's $95.1m to $89.9m. Gearing, at 29.4 per cent, was down slightly on last year's 29.7 per cent.

Funds from operations dropped from last year's $54.2m to $52.3m although Kiwi said that decrease reflected asset sales.

Kiwi's accounts noted vacancy at the Vero Centre and Countdown leaving as factors contributing towards falling rental income.

But interest and finance charges had also fallen, while "one-off" CEO transition costs raised employment and administration expenses.

Gavin Parker, chief operating officer, said Sylvia Park's new $80m office block, a $21m upgrade at Northlands in Christchurch and development of a new $36m, five-level, 600-vehicle carpark at Sylvia Park were included in the $140m. The carpark is up between Zara and H&M.

The $245m work in progress figure included a galleria second-level at Sylvia Park, development of the Kmart there to replace the Countdown which shut and creation of a two-level Farmers, Parker said.

Mackenzie said 60 new shops would open at Sylvia Park in the middle of 2020 and that negotiations were underway with retailers.

Stuart Tabuteau, chief financial officer, said negotiations were also progressing on the sale of Centre Place North in Hamilton: "We have said we would be working through the ground lease which is not particularly favourable," he said.

additional reporting: Anne Gibson