Tag Archives | Kiwi Property

Kiwi Property settles second Drury site purchase

Kiwi Property Group Ltd settled its acquisition of 30.6ha at Drury on Wednesday, after receiving approval from the Overseas Investment Office a week ago to proceed.

The company intends to create a new town centre next to Stevenson Group Ltd’s mostly industrial 360ha development site.

Kiwi’s 3 greenfield sites are next to the junction of the Southern Motorway, Great South Rd and the North Island main trunk railway line, 35km south of Auckland’s city centre.

Chief executive Chris Gudgeon said: “This brings our total landholdings to 42.7ha, at a purchase price of $39.8 million. A third land parcel of 8.6ha has been secured via a right of first refusal, with the purchase price to be determined with reference to the market when the right is exercised.

Earlier stories:
13 September 2017: Kiwi Property’s Drury buy approved
10 September 2017: Second round for Auranga precinct confirms Drury as major growth centre
7 April 2017: Kiwi Property plans new town centre next to Stevenson’s Drury development
30 August 2013: Drury South industrial area plan change & MUL extension approved

Attribution: Company release.

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Kiwi Property adds 2 banks to its funding pool

Kiwi Property Group Ltd has further diversified its sources of debt, adding HSBC Holdings plc & China Construction Bank Corp to its pool of banking lenders.

Kiwi chief financial officer Stuart Tabuteau said today the company had increased its total finance debt facilities by $75 million to $1.3 billion. It’s added a $100 million facility from HSBC on 3-, 4- & 5-year terms and a $100 million 6-year facility from China Construction Bank, and paid down $125 million of shorter-dated debt.

Mr Tabuteau said one result was to increase Kiwi’s weighted average term to maturity of its finance debt facilities by half a year to 3.5 years.

Attribution: Company release.

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Kiwi Property’s Drury buy approved

Kiwi Property Group Ltd said yesterday it had received approval from the Overseas Investment Office to proceed with its acquisition of land at Drury, 35km down State Highway 1 from Auckland’s city centre.

The company said on 7 April it had secured agreements to acquire 3 greenfield sites totalling 51.3ha adjacent to the junction of the Southern Motorway, Great South Rd & the North Island main trunk railway line.

The Overseas Investment Office approval relates to the acquisition of a freehold interest of 39.2ha of this 51.3ha.

Kiwi Property chief executive Chris Gudgeon said yesterday: “This landholding reinforces our commitment to be part of Auckland’s future growth. Our vision is to develop a town centre to complement the existing Drury town centre, which would be staged over the next 20 years to coincide with predicted population growth, household formation & employment growth in South Auckland.”

Settlement of Kiwi’s purchase of 30.6ha of the Overseas Investment Office-approved land parcels is due to occur next Wednesday, 20 September 2017. Mr Gudgeon said Kiwi would fund it through existing debt facilities.

He said in April the acquisition price for 2 of the land parcels, totalling 42.7ha, was $39.8 million. Kiwi secured the third parcel of 8.6ha via a right of first refusal, with the purchase price to be determined with reference to the market when the right is exercised.

Earlier stories:
10 September 2017: Second round for Auranga precinct confirms Drury as major growth centre
7 April 2017: Kiwi Property plans new town centre next to Stevenson’s Drury development
31 October 2016: Work starts on 3 striking special housing area projects
24 August 2016: Work set to start after fast approval for Auranga special housing area at Drury
4 July 2015: 2 large special housing areas for Franklin
30 August 2013: Drury South industrial area plan change & MUL extension approved
4 September 2012: Drury South plan changes notified

Attribution: Company release.

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Institutions much keener on Kiwi Property offer than existing retail investors

Kiwi Property Group Ltd completed the retail bookbuild component of its $161 million fully underwritten 1-for-11 pro rata entitlement offer on Wednesday.

Chief executive Chris Gudgeon said 74% of all entitlements were taken up by existing shareholders. But there was a clear division of enthusiasm between institutional & retail shareholders – 94.5% of the institutional component was taken up by existing shareholders, but in the retail component it was only 50.4%.

The clearing price under the retail bookbuild was $1.38/share, a 2c premium over the application price. Eligible retail shareholders who elected not to take up their entitlements and ineligible retail shareholders will therefore receive 2c for every new share they don’t take up.

Mr Gudgeon said in June the NZX-listed company intended to use the net proceeds initially to pay down bank debt and reduce gearing, before being used to fund potential investment & development opportunities, including the potential expansion & improvement projects at Sylvia Park, Northlands, The Base, and in the longer term at Drury.

Earlier story:
21 June 2017: Kiwi Property seeks $161 million new equity

Attribution: Company release.

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Kiwi Property seeks $161 million new equity

Kiwi Property Group Ltd announced a $161 million equity-raising on Monday through a fully underwritten pro rata entitlement offer.

The $1.36/share issue price reflects a 4.5% discount to the theoretical ex-entitlement price of $1.424/share. The theoretical ex-entitlement price equals the average price of 118,132,021 new shares at the application price of $1.36 and 1,299,452,240 existing shares at $1.43, which was the closing price on the NZX on 16 June.

Kiwi Property chief executive Chris Gudgeon said the NZX-listed company intended to use the net proceeds initially to pay down bank debt and reduce gearing, before being used to fund potential investment & development opportunities, including the potential expansion & improvement projects at Sylvia Park, Northlands, The Base, and in the longer term at Drury.

Under the offer, eligible Kiwi Property shareholders will be entitled to acquire one new share for every 11 existing shares held on the record date, which is today.

The institutional component of the offer will be accelerated and occur over the next 2 days.  Settlement & allotment of new shares is scheduled for Friday 30 June.

The retail component of the offer will open tomorrow for eligible retail shareholders with a registered address in New Zealand or Australia and close on Monday 10 July. Settlement & allotment of new shares is scheduled for 17 July.

Under the offer, there is no rights trading. Instead, new shares not taken up or attributable to ineligible shareholders will be offered to institutional investors through 2 bookbuilds run by the joint lead managers, one for the institutional offer and one for the retail offer.

Any premium achieved above the application price for the new shares in each of the bookbuilds will be shared on a pro rata basis (with no brokerage costs deducted) between those shareholders who don’t exercise their entitlements or who are ineligible to do so.

Due to the timing of this offer, Kiwi Property’s dividend reinvestment plan has been suspended for the final dividend payable tomorrow. Shareholders who elected to participate in the plan will be paid the dividend instead.

Attribution: Company release.

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Kiwi Property operations up as revaluation gains slashed

Kiwi Property Group Ltd lifted operating earnings by 13% in the year to March, but a $135 million cut in revaluation gains put paid to any rises on other financial statistics.

Don’t feel sorry for the company though: Kiwi was very happy to bask in the glow of that revaluation windfall last year. When the company announced its 2016 result, chief executive Chris Gudgeon said: “We have this year seen the benefit of our long-term strategic initiatives, with asset values rising on the back of rental growth, leasing success & development activities, combined with improved market conditions.”

Carefully ignoring revaluations meant that, this year, Mr Gudgeon could focus on other aspects of the business, many of them more positive for the long term than a market shift in portfolio assessments.

But first, those key figures:

  • Net rental income up 16.6% to $182.5 million ($156.6 million)
  • Funds from operations up 12.9% to $102.8 million ($91.1 million)
  • Net fair value gain on investment properties $41 million ($175.9 million)
  • Net fair value gain/(loss) on interest rate derivatives $9.7 million ($17.6 million loss)
  • Total income down 35.7% to $290.6 million ($391 million)
  • Pretax profit down 36.8% to $171.7 million ($271.7 million)
  • After-tax profit down 43% to $143 million ($250.8 million)
  • Basic & diluted earnings/share down 45% to 11.10c (20.15c)
  • Investment properties up 11.2% to 2.97 billion ($2.67 billion)
  • Gearing ratio 34.5% (30.3%)
  • Net asset backing/security up 3.7% to $1.39 ($1.34)
  • Weighted average cap rate down 3.2% to 6.40% (6.61%)
  • Occupancy rate 98.8% (98.7%)
  • Weighted average lease term 5.6 years (5.1).

Portfolio performs

Mr Gudgeon said the rise in funds from operations, the company’s key operating measure, was driven predominantly by rental income from completed developments & acquisitions.

He said in the company results announcement today that Kiwi’s strategy in recent years had been to substantially rebalance its portfolio weighting towards Auckland: “We’ve invested in high  quality office buildings & retail centres in locations favoured by the Auckland unitary plan, and we increasingly see ourselves as town centre investors, creating diverse, engaging environments for New Zealanders – exceptional places for exceptional people.

“Outside of Auckland we have invested in dominant regional shopping centres and in the creation of a core Government office precinct in Wellington, supported by long-term Crown leases.

“At year end, we retained a strong balance sheet. Our gearing ratio stood at 34.5% and our net tangible assets/share increased from $1.34 to $1.39, reflecting positive asset revaluations. Our overall cost of debt reduced 27 basis points to 4.61% after we took advantage of favourable debt market conditions to refinance.”

He said the company continued to diversify its revenue base, growing third-party assets under management to $400 million. It added The Base at Te Rapa & Centre Place South in Hamilton to its external assets under management.

Other key outcomes for the year included:

  • opening New Zealand’s first H&M and Zara stores at Sylvia Park
  • starting construction works on a new office building at Sylvia Park, which will seamlessly integrate with a ground-level extension to the existing dining lane. Kiwi will also build a new 600-space carpark building
  • completing the 35,000m² core Government office precinct in Wellington (44 The Terrace & The Aurora Centre), with tenants now in occupation, providing a weighted average lease term of 15 years
  • completing the seismic strengthening work at The Majestic Centre, which achieved a seismic performance rating of 100% of new building standard on the office tower, and securing new lease agreements over 2800m² with Summerset and OMV
  • assuming management of The Base under the joint venture agreement with Tainui Group Holdings
  • securing a new 12-year lease with Suncorp for 5991m² of office space at the Vero Centre
  • the rollout of further electric vehicle charging stations at shopping centres, taking the total to 22 at 5 centres, and
  • being named the best performing New Zealand company for carbon disclosure.

Post-balance date, the company announced it had acquired, or secured acquisition agreements, for 51ha of future urban land at Drury, 35km south of the Auckland cbd.

Link: Property compendium

Attribution: Company release, accounts.

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Cotterill takes chair at NPT

Bruce Cotterill (pictured) replaced Tony Sewell today as chair of NZX-listed property company NPT Ltd, following the success at last Friday’s special shareholder meeting of 5 resolutions to change board membership.

Mr Sewell, who’d replaced the retiring Sir John Anderson as chair on 17 March, and Jim Sherwin were voted out, Carol Campbell’s position as an independent director wasn’t questioned and she remains on the board, new directors Mr Cotterill & Allen Bollard have been declared independents and the other new director, Augusta Capital Ltd chair Paul Duffy, is not independent.

Augusta bought 9.26% of NPT last August, tried unsuccessfully to get Sir John to call a shareholder meeting on its proposals, which included taking over NPT’s corporate & portfolio management, and took its holding to 18.85% a fortnight ago.

The first resolution at Friday’s meeting, recommending shareholders support a proposal by Kiwi Property Group Ltd to sell NPT 2 properties and buy the management rights for NPT’s portfolio, was defeated with a 54.87% vote against.

Mr Cotterill was New Zealand managing director and then regional managing director of real estate consultancy Colliers Jardine for 5 years in the 1990s. 2 years ago he was appointed an independent director of Pumpkin Patch Ltd. He’s also chaired Noel Leeming Group Ltd and been managing director & chief executive of Yellow Pages Group Ltd and a director of Woosh Wireless Ltd. Now he chairs Move Logistics Ltd, NZ Retail Property Group Ltd’s advisory board and Swimming NZ.

Mr Bollard is a former finance director of the Fletcher Building Group (when it was part of Fletcher Challenge Ltd) and property developer & investor Unity Group, and was chief executive & chief financial officer of Tramco Group Ltd for 9 years before moving into business consulting & governance on his own account in 2012, primarily in property & construction. He’s a director of Viaduct Harbour Ltd, Ross Green’s Riverside Industries Ltd and Tamaki Makaurau Community Housing Ltd.

Former DNZ Property Fund Ltd (now Stride Property Ltd) chief executive & executive director Paul Duffy joined Augusta’s board last November and took over chairing it when Peter Wilson retired in December. Mr Duffy was at DNZ for 13 years, leading its transformation from a large group of syndicates through its NZX listing in 2010 and on to building a $950 million portfolio of managed & directly owned properties. DNZ changed its name to Stride Property Ltd last year. Before joining the DNZ group, Mr Duffy had a long career at Fletcher’s, finishing as general manager of Fletcher Property Ltd and a director of the Fletcher Development Co Ltd.

Earlier stories:
21 April 2017: Augusta wins fight for NPT
7 April 2017: Augusta lifts stake in fight for NPT
31 March 2017: An unlikely twist could still derail NPT’s Kiwi deal
31 October 2016: Fourth era for NPT a hard option to combat
27 September 2016: Augusta buys 9% of NPT

Attribution: Company release.

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Augusta wins fight for NPT

Augusta Capital Ltd – kept at bay for 8 months by former NPT Ltd chair Sir John Anderson – won control of the smaller NZX-listed property company today.

Shareholders voted 54.87% against the NPT board’s preference for Kiwi Property Group Ltd to sell 2 properties to NPT and become a cornerstone shareholder, then supported the ousting of 2 directors and appointment of 3 Augusta nominees.

Mr Sewell joined the NPT only last year and replaced Sir John as chair on 17 March.

If anybody was swayed at today’s meeting, it would have been by a handful of figures produced by Salt Funds Management Ltd managing director Matt Goodson, who turned around appearances on returns from competing Kiwi & Augusta proposals, and by both a persuasive address and subsequent pointed interjections from Augusta managing director Mark Francis.

Augusta didn’t have a proposal before today’s meeting. It made one last August when it bought 9.26% of NPT – raised to 18.85% 2 weeks ago – but, for the meeting, only put up resolutions to oust Mr Sewell & Jim Sherwin and install Augusta chair Paul Duffy and 2 independents, Allen Bollard & Bruce Cotterill. Carol Campbell was the one existing director whose position wasn’t questioned.

Both Augusta & Kiwi had proposed buying NPT’s management contract, on very different terms. Augusta’s buyout wasn’t up for a vote today, but the board vote means it can be put in place.

Attribution: Meeting, company release.

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Augusta lifts stake in fight for NPT

The fight for control of NZX-listed NPT Ltd heated up today as Augusta Capital announced it had increased its stake to 18.85%, 2 weeks ahead of a shareholder meeting where the board has recommended supporting a proposal by Kiwi Property Group Ltd.

Augusta bought 9.26% of NPT last August, proposed selling assets into it and taking over company & asset management, then added a proposal to replace the NPT board when NPT was slow to call a shareholder meeting.

That meeting has only just been called, for Friday 21 April, but the only part of it relating to Augusta’s proposal is the vote on board seats – to remove directors Tony Sewell & Jim Sherwin, leaving Carol Campbell as the one remaining member from the existing board, and appointing Augusta nominees Allen Bollard, Bruce Cotterill & Paul Duffy. The NPT board not only favoured Kiwi’s proposal, but set out what it didn’t like about Augusta’s.

Augusta chief executive Mark Francis said today the company had bought 9.59% of NPT from other shareholders for $10,559,674, with settlement to occur next Tuesday, 11 April.

“Following that, Augusta Capital will be the largest shareholder in NPT,” he said. “This week’s acquisition of shares in NPT is consistent with our longstanding plan to grow our funds management business and significantly, it strengthens our position ahead of the NPT special meeting on 21 April.

“Having now carefully assessed the Kiwi Property proposal being recommended by the NPT board, we remain firmly of a view that it is not in the interest of NPT shareholders. While we respect Kiwi Property, the current proposal is heavily skewed in their favour – falling well short of what we consider to be fair & reasonable for NPT shareholders.

“Augusta intends to vote against the Kiwi Property proposal and is aware of a number of other shareholders who have indicated their intention to vote against the Kiwi Property proposal. We would encourage all NPT shareholders to seek independent specialist advice concerning its merits before casting their vote.

“We believe the current board is completely out of touch with its shareholders in recommending this deal, and Augusta Capital will also be voting for change through resolutions 2-6, to remove 2 of the current board members, noting that the previous chairman has already stepped down.”

Earlier stories:
31 March 2017: An unlikely twist could still derail NPT’s Kiwi deal
27 March 2017: Kiwi proposal for NPT finalised “in next few days”
6 March 2017: NPT works through detail of Kiwi bid
12 January 2017: Augusta drops court action but NPT meeting likely delayed
8 January 2017: NPT interim report shows company treading water
14 December 2016: Kiwi proposal for NPT revealed
2 December 2016: Augusta gets February court date while NPT continues with meeting plan
23 November 2016: Lack of revaluations halves NPT profit
4 November 2016: NPT considering more than just Augusta’s proposal
31 October 2016: 
Fourth era for NPT a hard option to combat
27 September 2016: 
Augusta buys 9% of NPT

Attribution: Company release.

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Kiwi Property plans new town centre next to Stevenson’s Drury development

Kiwi Property Group Ltd has bought some of 51.3ha at Drury, with agreements to secure the balance, to create a new town centre next to Stevenson Group Ltd’s mostly industrial 360ha development site.

The 3 greenfield sites are next to the junction of the Southern Motorway, Great South Rd and the North Island main trunk railway line, 35km south of Auckland’s city centre.

Kiwi chief executive Chris Gudgeon said in a release today the company had acquired some of the land, and had secured agreements to acquire more, as a strategic long-term holding to capitalise on Auckland’s continuing population growth.

“Our vision is to develop a town centre to complement the existing Drury town centre, which would be staged over the next 20 years to coincide with predicted population growth, household formation & employment growth in South Auckland.

“We will work with Auckland Council & infrastructure providers to secure a town centre zoning providing for commercial & retail uses integrated with high, medium & low density housing – all within walking distance of an integrated public transport node.”

Mr Gudgeon said the acquisition price for 2 of the land parcels, totalling 42.7ha, was $39.8 million. He said Kiwi had secured the third parcel of 8.6ha via a right of first refusal, with the purchase price to be determined with reference to the market when the right is exercised.

Overseas Investment Office approval is required in relation to the acquisition of 30.6ha.
Mr Gudgeon said it was an exciting opportunity for Kiwi: “Intensification at key transport nodes and masterplanned town centre developments are going to be a big part of our future under the Auckland unitary plan.

“Drury is already a highly accessible location, at the junction of the Southern Motorway, Great South Rd & the North Island main trunk railway line. Transport links to this area are only going to get better, with Auckland Transport’s plans for the construction of the Mill Rd southern arterial route, electrification of rail through to Pukekohe and the opportunity to construct a railway station adjacent to the town centre.”

The land’s current zoning under the unitary plan is future urban.

Mr Gudgeon said Kiwi’s plans for the amalgamated sites would be complementary to Stevenson’s adjacent development.

Earlier stories:
31 October 2016: Work starts on 3 striking special housing area projects
24 August 2016: Work set to start after fast approval for Auranga special housing area at Drury
4 July 2015: 2 large special housing areas for Franklin
30 August 2013: Drury South industrial area plan change & MUL extension approved
4 September 2012: Drury South plan changes notified

Attribution: Company release.

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