KEY POINTS:
Listed property investor Kiwi Income Property Trust has made a net profit after tax of $123 million for the year to March.
The trust's distributable profit is $62.1 million, up 4.9 per cent on last year, with a final cash distribution of 4.50 cents per unit, plus an
0.18c imputation credit.
That takes the full year distribution to 9.0 cents, up 7.9 per cent on the previous year.
The trust is projecting a similar cash distribution of about 9c per unit next year, depending on economic conditions.
The owner of Auckland's Sylvia Park said the result included a net valuation gain of $64.7 million and compared with a restated 2007 profit of $254.6 million , although that included a valuation gain of $226.2 million.
KIPT, a top 10 stock on the NZX, said its performance was underpinned by strong rental growth and solid demand for office and retail space in its buildings.
"Solid tenant demand for premium-quality office and retail space in the main metropolitan centres resulted in high occupancy levels and rental growth," trust manager chairman Sean Wareing said.
Despite uncertainties in global financial markets and high interest rates, he said the trust's outlook was positive because of its defensive qualities.
Total assets increased by $144.9 million to $2.1 billion, of which 27.3 per cent or $571 million was bank debt.
A recent restructuring of debt arrangements has given the trust $750 million of debt facilities.
Net rental income rose 25 per cent to $125.1 million, up 4 per cent on a like for like basis. Many office leases were renewed during the period and increases were expected to continue across the Auckland, Wellington and Christchurch office markets.
Chief executive Angus McNaughton said that a general softening in retail sales but high occupancy levels were expected to continue.
He said Sylvia Park, New Zealand's largest shopping centre, had been finished within budget and on time. In January it became the first shopping centre to ring up annual sales of more than $300m, hitting $349 million at the end of March.
The centre provided an $18.4 million revaluation gain and was the most significant retail contributor to the increase in portfolio value.
Work had also begun on the $93 million redevelopment of The Plaza in Palmerston North.
One glitch had been a change in the eligibility criteria for the influential MSCI Global Investable Market Indices, which had seen the trust, along with a number of other New Zealand stocks, move from the MSCI's standard index to its small cap index.
"This transfer, together with the global credit crisis and its impact upon global property and equity stocks, has had an adverse impact upon the trust's unit price during the year as index based investors have re-weighted their portfolios accordingly," Mr McNaughton said.
Shares in KIPT were up a cent at $1.25 , compared to a year high of $1.71 in May last year and a year low of $1.16 in late March.
Mr McNaughton is relocating within the wider Commonwealth Bank of Australia Group, KIPT's parent, to Singapore. Chris Gudgeon, currently the general manager of property at Auckland Airport, has been appointed to replace him.
- NZPA