25 Jul 2013

Plans to turn Kiwi Income Property Trust into company

9:34 am on 25 July 2013

The owner of Kiwi Income Property Trust's manager is planning an offer to internalise its management, turning it from a trust into a company.

Kiwi's directors say they have received a non-binding, indicative, incomplete and conditional proposal from Commonwealth Bank of Australia.

The directors say they have established a sub-committee to consider the proposal and are seeking further information from the bank as well as independent advice. They have appointed First NZ Capital as financial advisor.

Fund manager Matthew Goodson, of Salt Funds Management, says he needs more details before he can decide whether internalising the management is positive for investors.,

He says what really matters is having a strong board, skilful management with the right incentives in place and fair and appropriate fees.

Mr Goodson says the general view is that the manager of the Kiwi Income Property Trust is a solid performer with a major win in Syvia Park in Auckland but he acknowledges there have been some issues at Centre Place in Hamilton and the Majestic Tower in Wellington.