Kiwi Property has released its annual results for the year ended 31 March 2024, announcing a solid operational performance and progress on key aspects of its mixed-use strategy.
The company recorded net rental income of NZ$184.9 million in FY24, down 9.2% on the year before, following the sale of non-core assets such as Northlands and Westgate Lifestyle in recent periods. Operating profit before tax was similarly affected, declining 16.5% to NZ$108.2 million, while adjusted funds from operations decreased 14.3% to NZ$99.8 million.
When viewed on a like-for-like basis to enable a more accurate comparison of Kiwi Property’s underlying performance, net rental income rose 5.8% in FY24, demonstrating the company’s ability to grow revenue from its remaining assets.
Kiwi Property drove positive leasing spreads in FY24, with total rental movement up 4.4% and new leases rising 5.3%. New office leases increased 18.7%, underpinned by progress at the Vero Centre over recent months.
The Base Te Awa and LynnMall achieved sales growth of 13.1% and 1.8%, respectively, in FY24, fuelled by the opening of new stores such as JD Sports and JB Hi-Fi. Sylvia Park sales were flat for the year following several periods of significant growth, but remain well ahead of pre-COVID levels.
The fair value of Kiwi Property’s asset portfolio increased by 0.1% in the six months to 31 March 2024 and finished the year 2.4% down overall.
Sylvia Park, NZ
The Sylvia Park Precinct posted a fair value uplift of 1.5% in the second half of the financial year, driven by rental growth and a marginal firming of capitalisation rates.
Kiwi Property Chief Executive Officer, Clive Mackenzie, said the resilient valuation of the company’s mixed-use portfolio highlighted the strength of these flagship properties.
“By continuing to drive sales, grow rents and diversify our income streams, we will encourage valuation uplift as the economy stabilises and capitalisation rates improve,” he said.
Mackenzie added that a key pillar of the company’s strategy was the construction of Kiwi Property’s 295 apartment build-to-rent (BTR) complex, Resido, which is nearly complete. Two of the development’s three buildings are already finished and the final is set to open on 4 June 2024.
“Resido’s launch is a key milestone on Kiwi Property’s mixed-use journey and an exciting development for Auckland, delivering residential accommodation to Sylvia Park for the first time. We expect to move towards full occupancy within the next 12-18 months.”
Sylvia Park BTR
On 16 May 2024, the company announced the conditional sale of the Vero Centre to a Hong Kong China-based institutional investor for $458 million, subject to Overseas Investment Office approval.
According to Mackenzie, Kiwi Property is well-positioned to benefit from several trends facing New Zealand.
“The shortage of housing, fuelled by record migration and declining building consents, is driving demand for quality rental accommodation, creating opportunities for Resido. In parallel low online shopping penetration and a limited amount of new retail space look set to benefit established retail destinations such as Sylvia Park, LynnMall and The Base. Against this backdrop, we will remain focused on strategic execution and delivering for our shareholders and the communities where we operate,” he said.
