17 May 2012

Kiwi Income Property Trust lifts profit

7:24 am on 17 May 2012

Kiwi Income Property Trust says it's comfortable with its exposure to the Auckland and retail markets, as they're showing signs of picking up.

New Zealand's largest listed property company owns malls including Auckland's Sylvia Park and LynnMall, and office buildings such as the Vero Centre in Auckland and the Majestic Centre in Wellington.

When revaluations, an insurance claim and other one-offs are stripped out, its operating profit rose more than 6% to $81.3 million in the year to the end of March.

Kiwi Income chief executive Chris Gudgeon says rental income rose 4.5%, largely driven by its retail assets, where sales rose more than 8%.

Mr Gudgeon says 85% of the company's portfolio is now in the retail or Auckland market which has positioned it well for growth.

He says economists are forecasting consumption growth of around 2 - 4% each year which Kiwi Income is happy about.

Mr Gudgeon says the Auckland office market is showing signs of improvement, but the outlook in Wellington is more subdued due to potential contraction in demand from Government and rising insurance costs.

He says Kiwi Income's development of the ASB Bank head office in Auckland's Wynyard Quarter is progressing well, ahead of ASB's lease starting in July 2013.

Shares in Kiwi Income fell 0.5 cents to $1.09 on Wednesday.