Shopping centre owner Kiwi Property said in the year ahead, it will focus on progressing its mixed-use property across its portfolio.
To strongly align the business and its vision with the company’s evolving strategy, Kiwi Property CEO Clive MacKenzie said they have reorganised the executive team to execute on their growth opportunities.
“Our strategic initiatives are set, implementation plans are in place and under development and we will continue to align capabilities within our teams to our forward vision,” company chair Mark Ford said.
MacKenzie said the envisioned growth opportunities include intensifying the group’s large landholdings by developing mixed-use communities, growing income from existing assets and establishing a team to investigate funds management opportunities.
“Over the 2020 financial year, we will continue to realign our business to these core strategic objectives,” he said.
Kiwi Property has recently completed its first office building at Sylvia Park called ANZ Raranga and the first of two new car parks as part of its mixed-use development.
The group said it will also expand the Sylvia Park shopping centre’s retail galleria with completion due in 2020.
“We have made the decision to expand our galleria retail development at Sylvia Park,” MacKenzie said. “An increase in the net lettable area will accommodate key tenants who want to be in this iconic location.”
“The expansion increases the project cost by $35 million to $258 million and we have maintained key yield metrics and increased the projected development profit to 13 per cent of project cost.”
MacKenzie said they are finalising negotiations with international and national tenants to provide further strength for the project in addition to the two-level Farmers department store and other retail tenancies already secured.
Stronger property revaluations drove Kiwi Property’s after tax profit of $138.1 million for the year ending March 31, up from last year’s $120.1 million.
Kiwi Property said its portfolio of mixed-use, retail and office assets continues to perform strongly. At year-end, the portfolio was 99.3 per cent occupied, with a healthy weighted average lease expiry of 5.2 years.
For the year ending March 31, total retail sales from the group’s shopping centre assets were $1.53 billion, up 2.0 per cent (2.4 per cent like-for-like), with specialty sales productivity improving to $11,000 per square metre. Total retail sales, including those from large format centres, were $1.70 billion.
Funds from Operations, the company’s measure of operating performance, was $106.9 million. As expected, this was down from $111.3 million in the prior year due to the short-term impact associated with selling two non-core assets and reinvesting the proceeds into superior development opportunities at Sylvia Park in Auckland, according to Kiwi Property.
“These developments will contribute progressively to shareholder returns from the 2020 financial year,” the company said.
Ford said the company’s strategic initiatives are set, implementation plans are in place and under development and they will continue to align capabilities within their teams to their forward vision.
“Our new funds management and property investment teams will focus on examining market opportunities, while our asset management team will continue to drive the operational performance of our property assets,” he said.
Supportive economic and property market fundamentals, in combination with strong portfolio metrics, will continue to deliver a strong financial performance in the year ahead according to Ford.
The company announced it will share more details about its strategies on its annual meeting with shareholders on June 20.
