Kermadec leases back from low point

Mark Francis, Managing Director of Kermadec Property. Photo /Greg Bowker

Kermadec Property Fund said recent leasing deals will increase the occupancy level in its buildings from 86 per cent back up to 92 per cent and will have a positive impact on earnings in the second half of the 2012 financial year.

The listed property fund made the comment in a presentation to investors organised by Forsyth Barr.

The fund has a new 12-year lease with a subsidiary of Woolworths Australia for a new 2100sq m Countdown Metro supermarket and a new eight-year lease with a restaurant operator for a development covering 650sq m. "2011 has started with a noticeable pick-up in leasing inquiry," the company said. It still has $14 million of non-core assets which it intends to divest in due course.

The company's core property portfolio is worth $85 million.

Kermadec said the property market remains challenging, but it was widely accepted that property valuations were now at the bottom of the cycle.