Kiwi Property posted a 16.2 per cent drop in net rental income to $89.1 million in the first six months following the sales of several assets as part of its strategic transformation.

The New Zealand Stock Exchange-listed company sold its “non-core, capital-intensive assets” including Westgate Lifestyle and the Sylvia Park Ikea during the period, earning over $127 million.

The firm now expects its key strategic assets – Sylvia Park, LynnMall, The Base and Drury – to accelerate their densification and growth, boost valuations and asset performance over time.

CEO Clive Mackenzie said the firm had reinvested the proceeds from asset sales into Drury and build-to-rent for a “greener, more resilient and lower-risk portfolio”.

“While this capital recycling activity has resulted in a temporary decline in revenue, the steps we’re taking will promote greater tenant demand, better rents, lower seismic costs and improved returns for our shareholders.”

Sales across mixed-use and retail assets rose 14.9 per cent to a record $2.1 billion in the preceding 12 months, while total customer visits increased 20 per cent to 36.6 million. 

The company reported a 4.5 per cent uplift on new mixed-use leases and rent reviews. New office leases and renewals were also up 13.9 per cent.

“Our ability to drive rents in the current economic environment is a testament to the performance and productivity of our assets,” said Mackenzie.

Kiwi Property now plans to continue executing its transformation into a creator of retail-led mixed-use communities and achieve a “more resilient financial position”.