Property boss hits back at rival

The head of the $1.3 billion Kiwi Income Property Trust has taken a swipe at a rival for criticising the structure of listed property trusts.

Kiwi chief executive Angus McNaughton hit back at Capital Properties chief executive and former colleague Chris Gudgeon, saying many companies were worse than trusts because they delivered less to investors.

Kiwi and Capital are locked in a struggle after Kiwi bought 19.9 per cent of Capital without declaring its intentions.

Capital responded by putting up for sale its management company, one of its most valuable assets.

Gudgeon, a former Kiwi executive who was instrumental in leasing the Vero Centre, struck another blow last week.

Issuing the half-year report to shareholders, he promised to avoid the pitfalls inherent in trusts by aligning the interests of Capital's manager with its shareholders.

Property companies with external managers had better corporate governance, he said.

McNaughton defended the trust structure, citing Kiwi's consistent performance and transparency of operations.

"Whether it's a trust or a company, it's all about performance," he said, citing the corporate excesses of the 1980s when companies dominated the listed property field.

McNaughton did not dismiss speculation that Kiwi could complain to market regulators about Capital's decision to sell its management contract - a decision taken within days of Kiwi's cornerstone share purchase.

"We're examining all our options," McNaughton said, refusing to discuss the matter further.

Funding options for the $300 million Sylvia Park project in Mt Wellington were being considered, he said, which could include selling half the project before it was built.

"If we sell off 50 per cent of it, we're unlikely to need to raise any equity," he said, responding to speculation that Kiwi was considering forming an unlisted wholesale fund to raise money.

Australian fund managers had already expressed an interest in buying into the project.

He added that the project had been "de-risked" by Kiwi owning the land, having it zoned for the shopping centre project, getting planning permission to build the development, and installing the infrastructure to allow development work to begin.