Kiwi Property makes record sales at malls, devaluations push result into red

Revenue was up at one of New Zealand’s largest listed landlords but bottom-line profit turned to a loss after property devaluations hit.

Kiwi Property Group, with $3.1 billion of assets, declared a $227.7m net loss after tax, a turnaround from last year’s $224.3m net profit, mainly due to unrealised devaluations.

Revaluations added $128m to last year’s result but this year that became a negative $352m devaluation.

But the business was upbeat about record sales at its shopping centres.

It made $1.7b in sales at Sylvia Park, LynnMall and The Base, up 28.5 per cent. Sylvia Park’s performance was particularly strong with $889m sales.

Forsyth Barr has a neutral rating on the business, saying in an earnings preview: “Retail sales at KPG malls remain solid but there could be signs cost of living is having an impact. Elevated committed gearing remains a focus.”

Gearing was elevated at its first-half result and with added pressure from announced asset devaluations.

Forsyth Barr would be looking for an update on the sale of Westgate Lifestyle and the development work at Sylvia Park and Drury.

Revenue of around $193m for the full-year was anticipated and ebitda of $162m.

The Herald this month reported on Sylvia Park and Kiwi’s new $200m build-to-rent scheme.

In about a year’s time, the Auckland housing scheme is scheduled to deliver 295 new residential tenancies, rented in perpetuity, providing what Mackenzie describes as “a place to set roots”.

He wants people to live there long-term, bucking the instability that is often typifies our residential rental market.

Construction of the central tower, Building B, had reached level seven. It will be 12 levels tall by the time it is complete.

Buildings A and C, flanking the central block, will both be nine levels and are now at levels five and four respectively.

Last year, Kiwi had $3.6b of real estate and pushed up bottom-line profit 14 per cent partly because of big revenue rises from an expanded Auckland shopping centre and revaluation boosts.

It reported a strong performance, announcing 2021′s $196.5m net profit after tax was $224.3m for the March, 2022 year.

Its big real estate portfolio rose in value $99.8m in 2021 but $120.5m by 2022.

Shares have been trading around 90c, down 11 per cent annually. Its AGM is is to be on June 28.