Demand from major retailers and design changes have resulted in Kiwi Property spending an extra $35 million expanding its Sylvia Park shopping centre in Auckland.
In its full-year results presentation posted on the NZX, the property business revealed how demand from retailer had resulted in price rise.
Clive Mackenzie, chief executive, said that original costs for the expansion had been $223m but the business would now spend $258m on the Mt Wellington property. That will give it 19,000sq m and an extra 900 carparks.
"We've had additional demand and are adding more than 1000sq m extra. It's a combination of retailers and obviously the retail environment is very competitive we want to play our cards close to the chest. Its changes on the ground and level one and also making design changes to the look and feel of the centre," Mackenzie said.
Whether a retailer like Sephora has demanded better digs is unknown, but Mackenzie said discussions were being held with a range of retailers.
"The design changes are from an aesthetic point of view in terms of how we provide the finished product, integrating the old and the new. We're putting something new on top of something old and we wanted to do some enhancements to the existing centre. It's a whole lot of things such as lighting, entrance and ceiling treatment."
Kiwi Property pushed up annual profit 15 per cent from $120m to $138m, mainly as a result of property revaluations, it announced on Monday morning. Chairman Mark Ford said part of the reason for the rise was having its portfolio weighted so much towards Auckland and Hamilton where so much economic activity was happening.
Kiwi opened Sylvia Park in 2006 but then added an office tower, new dining precinct and many new retailers Zara and H&M. In 2004, Kiwi Income Property Trust demolished World War II army storage sheds and then built the centre on the site alongside the Southern Motorway.
The mall opened mid-winter 2006 but Kiwi has further expansion plans, including for a new hotel and apartments.
The current $258m shop expansion is on the ground floor and level one of the centre, with the multi-level carpark building alongside.
Sixty new shops, including a Farmers department store, are planned to open mid-2020.
Pre-leasing is on programme and negotiations are being finalised with key international and local retailers, Kiwi told the NZX.
Mackenzie won't say how much of that 19,000sq m now under construction Kiwi has leased: "It's very competitive with Commercial Bay, Botany and Westfield Newmarket."
Naylor Love won the contract to expand Sylvia Park which last year had 3500 carparks. When the Galleria expansion is finished next year, the centre will have 5000 carparks, Mackenzie said.
Yet the centre has a bus interchange and a railway station. Asked why so many carparks were needed, Mackenzie said: "It allows us to build office buildings as well, without having to build more parking, we have built for the future."
Result for years to March 30
Revenue $235m $249.3m
Revaluations $47.6m $26.5m
Profit before tax $162.1m $148m
Net profit after tax $138.1m $120.1m