KPG - Kiwi Property Group Limited

[Biscuit]

I have heard all this negativity about many different stocks here over the years, OCA and SUM spring to mind. I do value the opinions I find here but sometimes it pays to stick with your convictions and maybe you have a different game plan and time frame to others.


I think there is also a bit of a misunderstanding about property investing. It is less about management and more about picking the right asset.

[fungus pudding]

I think there is also a bit of a misunderstanding about property investing. It is less about management and more about picking the right asset.

Property investing means buying with the view of never selling. Anything else is trading - rather than investing.

[Biscuit]

Property investing means buying with the view of never selling. Anything else is trading - rather than investing.

I agree with that. Of course if you find you have the wrong asset in the wrong place you should sell and get the right asset in the right place. Its called "location, location, location" for a reason. not "management, management, management".

[Beagle]

"(ARG) "

yes it was a great defensive stock back in MAY last year....that was the time to load.

now KPG is the range bound trade for years to come... 1.10 to 1.60

trading and investing is a 20 year horizon.

If your sitting on cash take time to get those company accounts out and study what the companies have planned for the next 5 to 10 years.

You have the whole winter to do this.

Look at the Aussi market and hope they have a big lock down and some prices get hit.

NZ could also have a big lock down and you get a quick one day price opportunity..

You will have to wait longer for a big one or just dont sell that wonder stock like SKL.... sadly we sold ... its often the ones you sell that you thought were a good defence buy that surprise you if you wait.


Chances of another national lockdown, or more than one for Covid is VERY high in my opinion. KPG are front and central to the risks associated with that. On the other hand ARG managed the Covid events of last year very well. (I already have quite a few of them).
Ripley's believe it or not, I can be a patient puppy :)

[Waltzing]

Note: Mr B stated that the flow of money from business investors would slowly abate on housing and move to property and that should float all boats on the comp props both stellar performer's and the laggards with good assets and KPG has some very very good assets.

pitty MR B may not be attending the meetings but he may have better things to do. Find another high div stock to add to that overflowing bowl.

[jimdog31]

Chances of another national lockdown, or more than one for Covid is VERY high in my opinion. KPG are front and central to the risks associated with that. On the other hand ARG managed the Covid events of last year very well. (I already have quite a few of them).
Ripley's believe it or not, I can be a patient puppy :)

Not forgetting that the lockdowns themselves resulted in the biggest upswing in retail demand seen in a long while :p

[Beagle]

Delta variant may already have spread in N.Z. so out of an abundance of caution I am taking a very precautionary approach and not attending any annual meetings until the extent of the possible spread is known.
I ran this decision past a couple of my good mates last night and they thought that was a prudent call.
That said, I'll be taking a very keen interest in the commentary at the OCA meeting this afternoon and the ARG meeting next Tuesday as these are good prospects for reallocation of property resources in my opinion.
ARG is very close to NTA and they have a very good track record.

[LaserEyeKiwi]

Chances of another national lockdown, or more than one for Covid is VERY high in my opinion. KPG are front and central to the risks associated with that. On the other hand ARG managed the Covid events of last year very well. (I already have quite a few of them).
Ripley's believe it or not, I can be a patient puppy :)

I don’t think the market cares about lockdowns anymore, they know it’s only temporary (eg won’t impact expected 2022 earnings) and vaccinations will eventually make lockdowns redundant before year end (plus with northlands and plaza being sold off, the retail exposure is much less for KPG going forward).

EDIT: partner of the Covid case that visited wellington tests NEGATIVE. Lockdown now seems highly unlikely.

[Beagle]

I disagree. There was $19.5 million in rent concessions given to tenants last year with Covid impact. Expected dividend of~ 5.3 cents per share, (down 24% from pre-covid level's), is clearly stated as being contingent on no more lockdowns.

[Waltzing]

Post removed.

[fungus pudding]

" (down 24% from pre-covid level's)"

my father was an accountant who hated computers because he could add faster then going to the keyboard



He should have kept the computer and keyboard in the same building he was in.

[Waltzing]

Post deleted and post above edited and comments removed.

[Habits]

Delta variant may already have spread in N.Z. so out of an abundance of caution I am taking a very precautionary approach and not attending any annual meetings until the extent of the possible spread is known.
I ran this decision past a couple of my good mates last night and they thought that was a prudent call.
That said, I'll be taking a very keen interest in the commentary at the OCA meeting this afternoon and the ARG meeting next Tuesday as these are good prospects for reallocation of property resources in my opinion.
ARG is very close to NTA and they have a very good track record.

I know that Beagles are an inquisitive and sociable breed so am sure you'd enjoy the meetings... if worried about airborne bugs, just put on a muzzle ahem face mask

[winner69]

See that great company that has New Zealand’s best mixed-use, retail and office buildings portfolio and who aspires to give kiwis a reliable investment in property going to issue some Green Bonds

Current ones get paid back in a few months

They were at 6.15% so hopefully the new ones a bit less

[Grimy]

I'm sure they'll be a lot less. 2.6%-2.9% perhaps?

[ados_nz]

Management dipping their toes in...

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/374951/349474.pdf

[Aaron]

Management dipping their toes in...

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/374951/349474.pdf

I wonder where Steven Penny fits on the remuneration report pg 80 of the annual report. I am guessing over $500,000 annual salary. A $23,350 investment isn't exactly showing much faith in the company. A bit over two weeks wages from KPG. He is doing well out of the company, but not through his shareholding.

[RTM]

I wonder where Steven Penny fits on the remuneration report pg 80 of the annual report. I am guessing over $500,000 annual salary. A $23,350 investment isn't exactly showing much faith in the company. A bit over two weeks wages from KPG. He is doing well out of the company, but not through his shareholding.

Well...its better news than him selling his holding...or a portion of it.
Even if it was to build a deck.
i am encouraged.

[Beagle]

I wonder where Steven Penny fits on the remuneration report pg 80 of the annual report. I am guessing over $500,000 annual salary. A $23,350 investment isn't exactly showing much faith in the company. A bit over two weeks wages from KPG. He is doing well out of the company, but not through his shareholding.

The sad fact is that the only area of strong year on year growth I identified in my 5 year long term historical analysis of KPG is in the area of wages and salaries. If any other area of their business was matching this strong and consistent cost growth such as top line growth or earnings per share it wouldn't be such a problem, but it really is and speaks to a culture of insensitivity to shareholders where staff come first. I agree that the sort of share investment we are talking about here is pathetic compared to what these sort of senior executives are sucking out of the company.

On another subject...interesting comment from ARG in their annual meeting earlier this week. Retail generally is going backwards.

Anecdotally on a trip into New market Auckland today I was profoundly shocked by the huge number of vacancies on the main road. In general chit chat with the manager of TSB in Newmarket she told me that the massive huge mall in Newmarket is really struggling to find tenants with the bottom floor still almost entirely vacant and many of the new tenants that had gone in there when this new mall came to market just before Covid broke had gone bankrupt. (Not a KPG mall but interesting anecdotal evidence of how tough parts of the retail market are).

[Waltzing]

it might be a case of in spite of itself it may prevail since the assets are better than the managers.

[LaserEyeKiwi]

I wonder where Steven Penny fits on the remuneration report pg 80 of the annual report. I am guessing over $500,000 annual salary. A $23,350 investment isn't exactly showing much faith in the company. A bit over two weeks wages from KPG. He is doing well out of the company, but not through his shareholding.

He just started in Q1, give him a chance.

[LaserEyeKiwi]

The sad fact is that the only area of strong year on year growth I identified in my 5 year long term historical analysis of KPG is in the area of wages and salaries. If any other area of their business was matching this strong and consistent cost growth such as top line growth or earnings per share it wouldn't be such a problem, but it really is and speaks to a culture of insensitivity to shareholders where staff come first. I agree that the sort of share investment we are talking about here is pathetic compared to what these sort of senior executives are sucking out of the company.

On another subject...interesting comment from ARG in their annual meeting earlier this week. Retail generally is going backwards.

Anecdotally on a trip into New market Auckland today I was profoundly shocked by the huge number of vacancies on the main road. In general chit chat with the manager of TSB in Newmarket she told me that the massive huge mall in Newmarket is really struggling to find tenants with the bottom floor still almost entirely vacant and many of the new tenants that had gone in there when this new mall came to market just before Covid broke had gone bankrupt. (Not a KPG mall but interesting anecdotal evidence of how tough parts of the retail market are).

pretty weird, retail is absolutely booming at the moment, and Sylvia park is at 100% occupancy. But maybe it’s a case of the premier locations attracting the best stores and the customers follow.

[Waltzing]

"But maybe it’s a case of the premier locations attracting the best stores and the customers follow."

plenty of empty shops in the side streets of hamilton.

plenty of over 60's attending the french film festival at the lido hamilton...

image if this is the last generation to whatch european films, listen to orchestras and attend live theatre.

[Waltzing]

"But maybe it’s a case of the premier locations attracting the best stores and the customers follow."

plenty of empty shops in the side streets of hamilton.

plenty of over 60's attending the french film festival at the lido hamilton...

image if this is the last generation to whatch european films, listen to orchestras and attend live theatre.

[Habits]

"But maybe it’s a case of the premier locations attracting the best stores and the customers follow."

plenty of empty shops in the side streets of hamilton.

plenty of over 60's attending the french film festival at the lido hamilton...

image if this is the last generation to whatch european films, listen to orchestras and attend live theatre.

Funny because the Why-cuto (Waikato) was just announced as the hottest region nationally off the back of ag and construction

[arekaywhy]

pretty weird, retail is absolutely booming at the moment, and Sylvia park is at 100% occupancy. But maybe it’s a case of the premier locations attracting the best stores and the customers follow.


Simple formula in my mind, provide parking and they will come, and by parking I mean easy access, free, and uncomplicated

[Waltzing]

"Why-cuto (Waikato)"

think the malls have sucked up the best of the best , the empty shops are mostly small ones. Munns clothing being one of the bigger ones.

Other than that traffic is as busy as ever and think city parking is free for the first 2 hours.

Big ring roads under development for hamilton opening up the region to much faster transit by the end of 2022.

[GTM 3442]

"

<snip>

Big ring roads under development for hamilton opening up the region to much faster transit by the end of 2022.

Will they make it easier to get into Hamilton or easier to avoid Hamilton?

[BigBob]

Management selling...:

https://www.nzx.com/announcements/374993

[BigBob]

Double post....

[Habits]

"Why-cuto (Waikato)"

think the malls have sucked up the best of the best , the empty shops are mostly small ones. Munns clothing being one of the bigger ones.

Other than that traffic is as busy as ever and think city parking is free for the first 2 hours.

Big ring roads under development for hamilton opening up the region to much faster transit by the end of 2022.

You mean horrible black tarmac with stinky polluting machines making loud noises that scare the fragile defenseless animals... lolz

[fungus pudding]

Will they make it easier to get into Hamilton or easier to avoid Hamilton?

Probably both from my experience of ring roads.

[RTM]

Well...its better news than him selling his holding...or a portion of it.
Even if it was to build a deck.
i am encouraged.

https://announcements.nzx.com/detail/374993
Hmmmmm.

[Rawz]

https://announcements.nzx.com/detail/374993
Hmmmmm.

This is VERY disappointing to see

[Beagle]

Maybe they had a look at the email I sent their head of investor relations and thought...you know what...the hound dog is right, this has been a shocking long term hold and the price has gone nowhere in the last decade, (gone backwards when taking inflation into account)

Not sure why the Westfield owned mall at Newmarket is struggling so much, could be the car parking building isn't free, could be the rents are so high the prices at shops there are too expensive, don't know but what I do know with KPG is this, its very, very easy to get "dazzled" by the jewel in their asset crown which is Sylvia Park and forget that they have at least their fair share of malls that are performing very poorly.

Essentially they don't want you to focus on that...lets just sell them and sweep the problems under the carpet and tell everyone that everything is going to be great with new developments...build them and they will come...what could possibly go wrong ? Maybe we are at "peak mall" and oversupply is a problem going forward ?

Anyone noticed how its one thing to want to sell the doggy malls, but quite another thing to actually sell them ? On the recent investor call they mentioned further write-downs to tired old malls post balance date and I guess this is to try and get real with their current values (even though they have fallen tens of millions in recent years already) in an effort to do a deal...and yet a deal still eludes them so maybe the malls they are trying to sell are even worse than they are letting on ?

Does management share selling suggest they are really struggling to sell these old malls and there are even more write-down's coming to effect sales ?

We all know the fortunes made with RYM in the last 2 decades and SUM, up 1000% in the last decade alone so just for some super long perspective I asked the question how does KPG's model work over the long term for investors ?

Well imagine my shock when I bought up the long chart on MSN Money and discovered they were $1.18 in 1994, 27 years ago !!
I went onto the Reserve Bank inflation calculator and brought up the housing index for that 27 year timeframe and $1.18 invested in housing in 1994 is now worth $6.90 and yet KPG is still $1.18. WOW !!

My experience tells me the best guide to the future is the past and KPG's track record is that investors are doing very, very poorly.

I think I'll leave it at that. I'm not trying to talk it down. I'm just posting objective long term analysis of whether KPG works or not for property investors.

[simla]

Just to put another possible viewpoint, they have been paying dividends in addition to the share gains. Before covid they paid about 7 cents, and I don't know how to look up old dividends before that.

But if you had put that 7 cents back into kpg over those 27 years (ie compounded at 1.07 for 27 years) your 1.18 would have become 7.38 seemingly? That exceeds the housing index - and the housing index includes last year's staggering 30% gain I think?

Okay, a simplistic calculation, but perhaps not entirely irrelevant?

[simla]

Duplicate for some reason.

[Beagle]

Just to put another possible viewpoint, they have been paying dividends in addition to the share gains. Before covid they paid about 7 cents, and I don't know how to look up old dividends before that.

But if you had put that 7 cents back into kpg over those 27 years (ie compounded at 1.07 for 27 years) your 1.18 would have become 7.38 seemingly? That exceeds the housing index - and the housing index includes last year's staggering 30% gain I think?

Okay, a simplistic calculation, but perhaps not entirely irrelevant?

Most forms of property investment will give you yield.

[simla]

Continuing to play devils' advocate:


1. 7 cents is a pretty good return on 1.18. Would you expect to get that on other property investments, after insurance rates maintenance tax and depreciation, and expect full return on the property index as well? I don't know.

2. The housing index is the most wildly successful investment in NZ for some time now probably. Is KPG doing "very, very poorly" for investors for not matching it - if indeed they have not, given my above post?

3. Housing has gone up because of short supply, whereas there is not a shortage on commercial buildings. The new 6 storey rule will surely change that a lot, and indeed KPG are looking to be part of that.

4. Anyone owning a house has swallowed ongoing expenses that would have quite noticeably eaten away on that housing index return, whereas the KPG return is after all costs (and messy involvement).

5. I could have added that the NTA on KPG is 1.36, adding another 15% return, taking the 7.38 return up to 8.5?

6. KPG were already moving to multi-use before covid, so the management are thinking ahead. One of the criticisms lately here seems to be to question if they are on the ball, but I would have said that was the last criticism you could say about them myself. They are very clever from my reading of reports.


Just some points since I am interested in this company and have investment in it.

[Beagle]

$1.18 in 1994 is just 68 cents in inflation adjusted terms in 2021. Enjoy your yield.

[simla]

Thanks for your reply, but I don't understand the point. All current prices are affected by inflation. Had someone reinvested that 7 cents, then the return would be in today's dollars just like the housing index. Apples to apples surely?

Your argument is surely more about whether people should use the dividend reinvestment plans instead of taking dividends, rather than whether this stock is a good or bad investment?

I post because I am genuinely interested in the answers. An awful lot of people own shares in KPG and many like myself will be perturbed to be reading here the suggestion that this investment may not be a good one. I ask questions which seem to me to support that it has been a perfectly good investment and am interested in replies.

[winner69]

Rest of sector on fire ....hitting new highs etc etc

Suppose there has to be dog in every sector

[Beagle]

Thanks for your reply, but I don't understand the point. All current prices are affected by inflation. Had someone reinvested that 7 cents, then the return would be in today's dollars just like the housing index. Apples to apples surely?

Your argument is surely more about whether people should use the dividend reinvestment plans instead of taking dividends, rather than whether this stock is a good or bad investment?

I post because I am genuinely interested in the answers. An awful lot of people own shares in KPG and many like myself will be perturbed to be reading here the suggestion that this investment may not be a good one. I ask questions which seem to me to support that it has been a perfectly good investment and am interested in replies.

You're missing the point. The point is not about whether people reinvest their dividends or not (note the companies dividend reinvestment plan remains suspended). That's a personal choice each investor makes as a fresh investment or not each time they receive income. The point is whether the company KPG and its business model is working for property investors consistent with the what one should expect out of a property investment over time ?

Most people invest in the property sector for capital gains and yield. This applies right across the sector whether its residential, commercial, industrial, office or retail. People expect that highly paid executives will be able to add value through tailored development programs and skillful management, not subtract value through their mismanagement of assets.

People expect that property will at the very least keep pace with general inflation and in KPG's case its crystal clear it hasn't. In addition yield is going backwards. 10 years ago they were paying 7 cps in annual dividends (8 cps in inflation adjusted terms today) and yet the forecast is for just "at least" 5.3 cps (whatever that turns out to be but lets just assume they didn't pick that number 5.3 cents out of thin air, so its logical to assume it will be somewhere close to that). The real value of the underlying assets is declining over time and the real value of the annual dividends is also declining over time so what value would you say that these highly paid executives are bringing to the table ?

[simla]

Obviously "highly paid executives" has nothing to do with it, merely the return to shareholders.

You say it is crystal clear they have not kept up with inflation, but inflation has been way below 6 or 7% for an awfully long time, so I do not understand why that is crystal clear. They would appear to have exceeded inflation for quite some time. Indeed they mentioned their 10% pa return to investors over quite a few years as I recall.

You say they should have done better. Well, fair enough if so. But that would be to answer my first question above:

1. 7 cents is a pretty good return on 1.18. Would you expect to get that on other property investments, after insurance rates maintenance tax and depreciation, and expect full return on the property index as well? I don't know.

Just WHAT would be acceptable? It is easy to say something is not enough, but what IS enough? By comparison, another well known property company owns the Johnsonville Mall, where the carpark always has potholes, the christmas decorations are pre WWI by the look of them, and the shops are increasingly closed. So, by comparison, I would say KPG do a great job, constantly keeping their assets relevant. It seems a little easy to say the small malls are a bad investment simply because covid struck which nobody could have seen coming. That is hardly a sign of bad management to my mind.

[Biscuit]

.....Would you expect to get that on other property investments, after insurance rates maintenance tax and depreciation, and expect full return on the property index as well? I don't know.

Just WHAT would be acceptable? ......

Well, that's a subjective question, but I'd say for leaveraged residential property you would want rent to at least cover expenses and expect long-term average capital gains of a couple of percentage points over realistic general inflation. Ignoring capital gains and interest you would probably be lucky to get 3% yield on residential, commercial should be higher.

[Beagle]

If you don't understand that a share price in 1994 of $1.18 is less in real dollars today when it is also $1.18 and even in non inflation adjusted terms the shares are going nowhere then I am afraid I cannot help you.
They're planning on paying 5.3 cps on $1.36 in assets which is just a 3.9% yield which is pathetic for a company with a mix of retail and commercial property.
They have no clearly defined plan to get back to 6.95 cps, that's another point I've made that you've missed.

Homework for the weekend for you. Have a really good play around with the Reserve bank inflation calculator and see how the real underlying value of money changes over time
https://www.rbnz.govt.nz/monetary-policy/inflation-calculator/

[Habits]

If you don't understand that a share price in 1994 of $1.18 is less in real dollars today when it is also $1.18 and even in non inflation adjusted terms the shares are going nowhere then I am afraid I cannot help you.
They're planning on paying 5.3 cps on $1.36 in assets which is just a 3.9% yield which is pathetic for a company with a mix of retail and commercial property.
They have no clearly defined plan to get back to 6.95 cps, that's another point I've made that you've missed.


Beagle, throw the man a bone... lolz

[SPC]

Beagle why don't you recalculate your long term performance using the legendary 'TSR' formula used by the famous Fisher listed trifecta i.e cap uplift plus divs over last decade and see how it stacks up?

[Biscuit]

Well, that's a subjective question, but I'd say for leaveraged residential property you would want rent to at least cover expenses and expect long-term average capital gains of a couple of percentage points over realistic general inflation. Ignoring capital gains and interest you would probably be lucky to get 3% yield on residential, commercial should be higher.


I sold a rental yesterday, it averaged 9% p.a capital gain over twenty three years vs CPI of, apparently, a bit over 2% p.a. So I guess you would expect a highly paid manager in commercial property to at least beat that

[simla]

Thanks for specific info. The more the better.

[Beagle]

Beagle why don't you recalculate your long term performance using the legendary 'TSR' formula used by the famous Fisher listed trifecta i.e cap uplift plus divs over last decade and see how it stacks up?

Beagles are pretty good at sniffing out a feed or three ;)

[Beagle]

...................

[Biscuit]

Thanks for specific info. The more the better.

If you invested 1.18 in 1994, it returned 9% p.a. and you reinvested dividends, you would have about 12 dollars today.

[simla]

Beagle, your basic point that there has not been an impressive long term return over several decades is an interesting one that I will ponder. It does however assume a few things, such as whether a property company is trying to be impressive or instead reliable, and it also assumes that the management over all that time have been consistent in order for that to be a fair observation. In particular, it also depends on whether the post-covid environment is a fair comparison too - clearly the share price would be at least 1.60 if covid hadn't changed the sharemarket take on KPG, and the valuation of buildings including being conservative after WFH. And for example, the reduced dividend was a decision that got taken during lockdown and may be reversed later or may be a change to capital investment priority for the future, or a desire to manage leverage in uncertain times, and which may turn out to be wise in future.

My gut instinct is that it is not overly useful to compare a 30 year return to what will happen next given the constant change of management and market conditions over time. But I will definitely ponder your observations, thank you. Statistics though, as we all know, can be used to make many observations, and it is an interesting exercise to tease them apart - my favourite recently : Markets fall after England beats Germany at football.

Meanwhile, all specific information that is posted will be welcome, and to others beside myself I'm sure.

[SPC]

Don't forget Beagle was himself dining at the KPG food bowl until a week or so ago. The ingredients haven't suddenly changed. If you bought in recently then you've acquired at a discount to NTA which offers room for re rating and a better than bank return in the meantime.
ARG languished a few years back as did Goodman. Then for one reason or another they take off.
Always good to diversify across this sector and keep abreast of trends.
I've held ARG since the ING days. KPG more recently so not concerned at this early stage. I won't lose my money and nor will you.

[Beagle]

Maybe the dog inherited some of those shares and it wasn't really a decision he made to buy in the first place.

[SPC]

..but maybe you did...your post of 21 June....
"Put my toe in the water in a very small way last year at $1.09...bought a few more last month @ $1.22. Average taking off the 2.95 cent divvy this week, they owe me net $1.15.33 incl brokerage on an ex divvy basis and just a very modest 2% portfolio position at this point."

[LaserEyeKiwi]

I sold a rental yesterday, it averaged 9% p.a capital gain over twenty three years vs CPI of, apparently, a bit over 2% p.a. So I guess you would expect a highly paid manager in commercial property to at least beat that

Congrats on selling up! Although we shouldn’t be comparing anything to the NZ residential property market though, it is the most insane in the world and regardless of how well we did as investors with it over the last two decades, it is essentially impossible to be repeated in the near to medium future as fundamentals simply won’t allow it (there is no chance the average NZ property price is going to double again anytime soon from the current $900k level), and as such the long term returns over the next decade or two for NZ residential property are highly likely to be pathetic compared to other asset classes.

[Beagle]

The circumstances in which I took an initial stake at $1.09 are to do with my Mum's estate and her family trust....not going to unpack it any more than that.

[Biscuit]

Congrats on selling up! Although we shouldn’t be comparing anything to the NZ residential property market though, it is the most insane in the world and regardless of how well we did as investors with it over the last two decades, it is essentially impossible to be repeated in the near to medium future as fundamentals simply won’t allow it (there is no chance the average NZ property price is going to double again anytime soon from the current $900k level), and as such the long term returns over the next decade or two for NZ residential property are highly likely to be pathetic compared to other asset classes.

Yes, I agree with you that NZ residential property prices are insane. That's the main reason we are selling down. There is just too much downside risk now. However, I do remember Don Brash making much the same argument in the 1990's and that didn't age well did it! The long, long term I reckon you'd expect 2% over inflation. If that pans out in the future, we should be in for zero growth in real prices for quite a while to balance out the mad increases over the last couple of decades. But probably that rebalance will be achieved through very high general inflation rather than house price falls.

[winner69]

Has anybody found out where the cash for the missing dividend from last year ended up? It was only $40m/$50m

[LaserEyeKiwi]

Has anybody found out where the cash for the missing dividend from last year ended up? It was only $40m/$50m

Big chunk of the dividend cash was offset by reduced revenue due to rent abatements (~$20m), aside from that the company was still allocating funds to property acquisitions etc for future growth (eg purchased another $5 million in property surrounding Sylvia park) and also was finishing capex projects / strengthening work on existing properties.

The dividend money wasn’t ringfenced or anything like that, so it was used for regular company activities instead of drawing down debt facilities, which is why the gearing ratio has remained quite low.

[Scrunch]

Has anybody found out where the cash for the missing dividend from last year ended up? It was only $40m/$50m

Depending on your viewpoint, the missing dividend was spent on capital expenditure (Mainly the Silvia park expansion) or it was spend on reducing borrowing.

From the 2021 accounts capital expenditure on property developments including capitalised interest was $112m. There was a $39m increase in borrowing so the difference that needed to be funded from somewhere was $73m.

Cashflow from operations was $107m. Dividends paid were $34m. This created a net difference available to fund capital, pay dividends or reduce borrowing of $73m

Everything else netted out to no change.

[LaserEyeKiwi]

I have enjoyed the discussion regarding the long term performance of KPG.

One thing to keep in mind is that KPG did a large $200 capital raise in 2019, the purpose of which was to reduce gearing substantially and also for funds for capex projects and land acquisitions which are only now starting to generate revenue (or in the case of Drury will not generate revenue for another couple of years).

What this means is that in the near term the operation returns were worse on a per share basis (more shares were issued for the capital raise) but the company had less exposure to debt risk and more long term opportunities than it did previously.

As such, along with the unexpected Covid hit, the companies planned “trough” in per share financial
metrics seems worse than it at first appears.

I also have to add that dividend expectations for the coming year are set at 5.30cps, but the company has indicated that it could be significantly higher after Northlands & Plaza are sold.

[winner69]

I have enjoyed the discussion regarding the long term performance of KPG.

One thing to keep in mind is that KPG did a large $200 capital raise in 2019, the purpose of which was to reduce gearing substantially and also for funds for capex projects and land acquisitions which are only now starting to generate revenue (or in the case of Drury will not generate revenue for another couple of years).

What this means is that in the near term the operation returns were worse on a per share basis (more shares were issued for the capital raise) but the company had less exposure to debt risk and more long term opportunities than it did previously.

As such, along with the unexpected Covid hit, the companies planned “trough” in per share financial
metrics seems worse than it at first appears.

I also have to add that dividend expectations for the coming year are set at 5.30cps, but the company has indicated that it could be significantly higher after Northlands & Plaza are sold.

And don't overlook the 2017/2018 capital raise (something like $160m)

Since March 2017 they have issued 270 million shares

Yes, you right in saying it affects 'financial metrics'

But NTA/share is less now than what it was at March 2017

This is while Beagle goes on about new capital being 'accretive' - ie putting the new capital to good use

[winner69]

I have enjoyed the discussion regarding the long term performance of KPG.

One thing to keep in mind is that KPG did a large $200 capital raise in 2019, the purpose of which was to reduce gearing substantially and also for funds for capex projects and land acquisitions which are only now starting to generate revenue (or in the case of Drury will not generate revenue for another couple of years).

What this means is that in the near term the operation returns were worse on a per share basis (more shares were issued for the capital raise) but the company had less exposure to debt risk and more long term opportunities than it did previously.

As such, along with the unexpected Covid hit, the companies planned “trough” in per share financial
metrics seems worse than it at first appears.

I also have to add that dividend expectations for the coming year are set at 5.30cps, but the company has indicated that it could be significantly higher after Northlands & Plaza are sold.

And don't overlook the 2017/2018 capital raise (something like $160m)

Since March 2017 they have issued 270 million shares

Yes, you right in saying it affects 'financial metrics'

But NTA/share is less now than what it was at March 2017

This is while Beagle goes on about new capital being 'accretive' - ie putting the new capital to good use and actually creating real wealth

[Habits]

Depending on your viewpoint, the missing dividend was spent on capital expenditure (Mainly the Silvia park expansion) or it was spend on reducing borrowing.

From the 2021 accounts capital expenditure on property developments including capitalised interest was $112m. There was a $39m increase in borrowing so the difference that needed to be funded from somewhere was $73m.

Cashflow from operations was $107m. Dividends paid were $34m. This created a net difference available to fund capital, pay dividends or reduce borrowing of $73m

Everything else netted out to no change.

The expansion known as "the Galleria" opened in October 2020, 6 months into the FY so really a lot of the development cost had to have occurred in the prior two years capex spend. They have said its worth $277m (construction cost would be lower) so it sort of aligns with the ealier CR. At a 5 percent yield it in theory return $14m in net rents

[winner69]

Last 4 years KPG have generated $423m operating cash flow and paid $292m in divies (should have been $340m)

So they have retained $131m of cash flow. They have raised $352m of new capital and sold $233m of property

Incoming cash over the last 4 years has been $705m

They've acquired $130m of property and spent $565m on 'Expenditure on Investment Properties' - total spend of $695m

Haven't had to borrow any more over this time and debt remains just over $1 billion.

I don't really know what all this means but it seems share holders aren't really much better off than 4 years

But I'm told that the future is bright

Note - what's expected capex over the next few years?

[winner69]

Last week KPG were 'considering' a Green Bond issue -- its all go now (suppose thet have to say 'considering' even though they were always going to do it just in case the world fell apart)

Could be worthwhile trying to get some in the bun fight - if they start trading post issue in line with existing KPG bonds (1.5% to 2.0%) maybe a quick buck

[Beagle]

The current longest KPG senior bond has a maturity of 12/11/25 and therefore has just over 4 years to run, which is a very different term to 7 years. This existing bond was trading as low as 1.6% when interest rates were lower but is now offered at 2%.

2.85% is for a long 7 year term. It could we worth a trade but investors looking to invest long term need to consider the prospects of interest rates going significantly higher in that timeframe. For many investors on a 33% tax rate 2.85% will give you a net return of just 1.9% after tax which in my opinion is unlikely to match inflation in the medium term.

[Grimy]

Bond set at 2.85% minimum.
So. 2.85% most probably

[Habits]

Bond set at 2.85% minimum.
So. 2.85% most probably

Those for whom yield is impt should buy the shares and benefit from the falling bond rate. Others who want capital return will buy the bond regardless

[LaserEyeKiwi]

Some good news here, the proceeds of this green bond will mostly go towards the maturing KPG010 bond in August, which currently has a 6.15% interest rate.

so dropping ~3.3% of interest on $125 million of debt, good for a $4 million saving per year in debt interest cost.

(although someone might want to correct me given I have no idea how the interest rate derivative positions would impact this)

[winner69]

Every man and his dog wanted KPG Bonds

So $150m at 2.85%

[Bjauck]

Every man and his dog wanted KPG Bonds

So $150m at 2.85% A lot more than the interest paid on a term deposit. After tax it may just come ahead of the Consumer inflation rate - at the moment anyway.

[winner69]

Bonds or shares?

When the KPG 6.15% 7 year bonds were issued in August 2014 the KPG share price was $1.17. Today it is $1.185

If the share price is still $1.185 on 20/8 then over 7 years capital gain is $0.005. In that period dividends have totaled $0.431 - giving a total return over 7 years of 4.72% pa from the shares

Compared to the bonds of 6.15% pa

Interesting eh

Just as well these days are different eh because you'd hope you would get more than 2.8% pa return from holding KPG shares for the next 7 years

Probably highlights how 'undervalued' KPG shares are today

[Beagle]

Some good news here, the proceeds of this green bond will mostly go towards the maturing KPG010 bond in August, which currently has a 6.15% interest rate.

so dropping ~3.3% of interest on $125 million of debt, good for a $4 million saving per year in debt interest cost.

(although someone might want to correct me given I have no idea how the interest rate derivative positions would impact this)

Easy enough to predict and they would have estimated this this when they came up with this years surprisingly low forecast of not less than 5.3 cps. Some very hard questions need to be asked about what is their plan to get dividends back to pre covid level's of 6.95 cps.

[Beagle]

Some good news here, the proceeds of this green bond will mostly go towards the maturing KPG010 bond in August, which currently has a 6.15% interest rate.

so dropping ~3.3% of interest on $125 million of debt, good for a $4 million saving per year in debt interest cost.

(although someone might want to correct me given I have no idea how the interest rate derivative positions would impact this)

Easy enough to predict and they would have estimated this cost saving when they came up with this years surprisingly low dividend forecast of ~ 5.3 cps. Some very hard questions need to be asked about what is their plan to get dividends back to pre covid level's of 6.95 cps. Listening into the last call I gathered the impression they really are not focused on this. Just sweep the problem regional malls under the carpet by selling them and build some new stuff and hope everything works out okay.

[winner69]

Shares v Bonds

Now is only one point in time but investing in KPG shares over the last few years has been a disaster compared to investing in their bonds

Table below shows the current KPG bonds on issue (shaded) and the returns (capital plus dividends) from the shares if one had bought on the date the bonds were issued. One column at current share price and the right hand column is if the share price was $1.50 today

In 3 cases there's been negative returns from the shares - that's not good is it. A reflection of KPG management maybe?

If one ascribes to the theory that returns from shares should be more than bonds than the KPG share price would have to be about $1.50 now.

Interesting and weird stuff eh

Hope future returns from shares in future beat the current 2.8% bond rate

As said earlier probably reflects how 'undervalued' KPG shares appear to be - and generally there is a reason for such undervaluation - what's the market telling us at the moment? Appears to be a complete lack of confidence in their strategy going forward and in particular doubting management's ability to execute that strategy

Now its stopped raining must go and cut the grass

[Beagle]

"
Now is only one point in time but investing in KPG shares over the last few years has been a disaster compared to investing in their bonds Winner69"

Perhaps more to the point investing in KPG over the last five years (and my biggest concern is this has happened when capitalization rates have fallen dramatically which is normally consistent with strongly rising share prices and NTA) has been a complete unmitigated disaster compared to any other form of property investment as the following comparative detail illustrates.

Share price 5 years ago - share price now, percentage change
ARG 114, 169 up 48%
GMT 132, 244 up 85%
VHP 214, 331 up 55%
PCT 125, 170 up 36%
PFI 160, 293 up 83%
KPG 153, 119 down 23%

Not a recent phenomenon either. As previously posted the share price of KPG was $1.18 on 31 March 1994, more than 27 years ago !

People invest for many reasons but a common theme with property investment is people generally invest hoping to get yield and capital gains. I don't think KPG's business model works other than for those investing just for yield.

[winner69]

"
.

Share price 5 years ago - share price now, percentage change
ARG 114, 169 up 48%
GMT 132, 244 up 85%
VHP 214, 331 up 55%
PCT 125, 170 up 36%
PFI 160, 293 up 83%
KPG 153, 119 down 23%

.

Those numbers put KPG in bad light eh

There's a very strong correlation between NZ 10 year bond rate and Listed Property stocks - as interest rates fall share prices move uo

NPF is the Smartshares Property Fund ETF -- 5 years ago when 10 Bond rate was around 3% pa NPF was trading around $1.10

Now 10 year rates are about 1.5%/1.6% and NPF is $1.55

So NPF up 40% odd while interest rates have fallen. The 40% probably would have been higher if KPG had performed

So why is KPG so far out of wack with its peers?

Suppose every sector needs a dog and KPG sure is the dog of property stocks

[winner69]

ASM meeting Monday

Sure to be an upbeat affair with happy investors - last 12 months 20% plus returns and prospects of even more in the next months

And when progress on the new strategy is outlined that'll get the faithful salivating (especially when they put up some pictures of Drury)


I see it's online ..... weather forecast not too good so might tune in to see how it goes .....somebody might even ask where the cash for the missing dividend went

[Beagle]

Those numbers put KPG in bad light eh

There's a very strong correlation between NZ 10 year bond rate and Listed Property stocks - as interest rates fall share prices move uo

NPF is the Smartshares Property Fund ETF -- 5 years ago when 10 Bond rate was around 3% pa NPF was trading around $1.10

Now 10 year rates are about 1.5%/1.6% and NPF is $1.55

So NPF up 40% odd while interest rates have fallen. The 40% probably would have been higher if KPG had performed

So why is KPG so far out of wack with its peers?

Suppose every sector needs a dog and KPG sure is the dog of property stocks

That's the $64,000 question. You have to seriously wonder about the caliber of management and whether retail is a very poor sector to invest in ? Perhaps the truth is we are oversupplied with retail already ?

With KPG I think its very easy to get dazzled with the quality of their Sylvia park property, (I know...I fell into that trap myself), with its excellent and very close proximity to on and off ramps in both directors on the Sothern motorway but there's far more to KPG than Sylvia Park !

The reality is some of their regional malls have fallen like a lead balloon in recent years and (not really discussed much before on here), discussed on the call was that subsequent to balance date some further valuation write-down's occurred with these problematic assets. Despite this it appears thus far no deal has been consummated on horribly performing (ghost malls ?) that management are so keen to dismiss.

They dress the sale of these up as a "change of direction and focus" but I hope some shareholders take them to task over why these regional malls have been such an abhorrent failure.

[winner69]

What were the drivers that pushed the KPG share price up to 170 in 2019

About 40% less now ….must be a story behind that as well.

But it’s been 170 before so cheap as now as it starts it rise up 170 again.

Jeez …that was a great race from JUSTASKPERCY ….great place divie but would have loved them win at 15’s as well …never mind KPG next start a certainty

[LaserEyeKiwi]

That's the $64,000 question. You have to seriously wonder about the caliber of management and whether retail is a very poor sector to invest in ? Perhaps the truth is we are oversupplied with retail already ?

With KPG I think its very easy to get dazzled with the quality of their Sylvia park property, (I know...I fell into that trap myself), with its excellent and very close proximity to on and off ramps in both directors on the Sothern motorway but there's far more to KPG than Sylvia Park !

The reality is some of their regional malls have fallen like a lead balloon in recent years and (not really discussed much before on here), discussed on the call was that subsequent to balance date some further valuation write-down's occurred with these problematic assets. Despite this it appears thus far no deal has been consummated on horribly performing (ghost malls ?) that management are so keen to dismiss.

They dress the sale of these up as a "change of direction and focus" but I hope some shareholders take them to task over why these regional malls have been such an abhorrent failure.

They aren’t ghost malls - both the plaza (Palmerston North) and northlands (Christchurch) that are “to be disposed of” are near 100% occupancy and the most popular malls in their respective areas, so the write down in valuations is not due to custom, but I suspect more a combination if increased earthquake risk (and associated strengthening costs), increased insurance costs, anticipated “pandemic risk” leading to the general re-rating if retail you theorized about maybe.

[LaserEyeKiwi]

ASM meeting Monday

Sure to be an upbeat affair with happy investors - last 12 months 20% plus returns and prospects of even more in the next months

And when progress on the new strategy is outlined that'll get the faithful salivating (especially when they put up some pictures of Drury)


I see it's online ..... weather forecast not too good so might tune in to see how it goes .....somebody might even ask where the cash for the missing dividend went

Haven’t we satisfactory answered the “missing cash” query already? It’s fairly basic explanation that it was used for general operations instead of using funds from debt.

[winner69]

Xxxxxxxxxxxxxxxx

[LaserEyeKiwi]

Just logged into virtual meeting for the AGM - interesting to see you can ask questions via online meeting.

[LaserEyeKiwi]

KPG management clearly wanting to scream “We are getting out of earthquake vulnerable geographies as soon as possible” but don’t want to scare away buyers for Plaza and northlands.

[LaserEyeKiwi]

$100-150 million of spending of “non-return” spending recently (earthquake strengthening in Chch & Wlg) had negative impact on returns over last few years.

nice to hear them spell it out loud in an obvious way that they hadn’t previously.

[LaserEyeKiwi]

Like I suspected the green bond is going to lead to a drop in interest costs

[LaserEyeKiwi]

Interesting situation that the longer it takes to sell Northlands and plaza, the better the short term financial performance (because they are high yielding assets)

[RTM]

$1.36 Net Asset Backing vs $1.26 FY20. Fair margin of safety at current SP.
Happy with recent purchase to hold and enjoy the dividend.
IMO better than having my money in the bank maybe tied up on fixed term deposit or in a bond.
Small % of portfolio.

[Beagle]

.....................

[RTM]

.....................

I'll come back to this in a couple of years Beagle and see how its going. May add on any weakness.
i don't tend to jump in and out like an excited wee Beagle.

[RTM]

.....................

That's not fair...I'll never remember what you said in two years !

[fungus pudding]

That's not fair...I'll never remember what you said in two years !

I can't remember what I said a minute ago, and that's not fair either - but it would have been right!

[Beagle]

I'll come back to this in a couple of years Beagle and see how its going. May add on any weakness.
i don't tend to jump in and out like an excited wee Beagle.

Ha ha ha. Can't resist https://www.youtube.com/watch?v=vn1-YU8n_MU

[Beagle]

That's not fair...I'll never remember what you said in two years !

LOL It was nothing new. Don't be a bad dog I told myself...I need to try and be less dogmatic.

[RTM]

Ha ha ha. Can't resist https://www.youtube.com/watch?v=vn1-YU8n_MU

Pleased you didn't. Great. Wish we could have a dog again....but living in a kiwi zone...not ideal.

[Biscuit]

Pleased you didn't. Great. Wish we could have a dog again....but living in a kiwi zone...not ideal.

You can get one of those electric shock collars. apparently they work to train dogs to be adverse to contact with kiwis. not sure if it works on higher cognitive problems like dogmatism?

[Beagle]

The disposal of our regional shopping centres, coupled with last year’s change to the
dividend policy will likely contribute to a re-basing of dividends in the short term.
Ultimately though, we expect these steps to contribute to a higher quality asset portfolio
and more stable income stream. Extract from today's address.

[winner69]

Beagle …that bit from AGM you quoted what does it really mean?


The disposal of our regional shopping centres, coupled with last year’s change to the dividend policy will likely contribute to a re-basing of dividends in the short term.

Ultimately though, we expect these steps to contribute to a higher quality asset portfolio and more stable income stream.

[Beagle]

Beagle …that bit from AGM you quoted what does it really mean?

Good question. Re-basing speaks of resetting of the base. From this we can infer that the forecast of 5.3 cps is the new base for the foreseeable future (a 24% reduction in dividends compared to pre-covid level's of 6.95 cps). A more stable income stream suggests they may not need to reset and rebase even lower in the foreseeable future subject to the numerous caveats that they mentioned which included no more lockdowns or untoward economic events, or words to that effect.

Overall gist of this is they are happy to give investors income a serious haircut under the auspices that the change of direction will be good for the company and their future development strategy will generate higher returns over time.

A cynic could very easily be forgiven for thinking that their main objective is to build more stuff to justify the ongoing strong growth in management salaries...(the only area of strong growth over the years).

I think its fair to say they need to try something new because what they have been doing isn't working.

Nuff barking from me otherwise RTM me ol mate will get the electric shock dog collar out :eek2:

[LaserEyeKiwi]

Good question. Re-basing speaks of resetting of the base. From this we can infer that the forecast of 5.3 cps is the new base for the foreseeable future (a 24% reduction in dividends compared to pre-covid level's of 6.95 cps). A more stable income stream suggests they may not need to reset and rebase even lower in the foreseeable future subject to the numerous caveats that they mentioned which included no more lockdowns or untoward economic events, or words to that effect.

Overall gist of this is they are happy to give investors income a serious haircut under the auspices that the change of direction will be good for the company and their future development strategy will generate higher returns over time.

A cynic could very easily be forgiven for thinking that their main objective is to build more stuff to justify the ongoing strong growth in management salaries...(the only area of strong growth over the years).

I think its fair to say they need to try something new because what they have been doing isn't working.

Nuff barking from me otherwise RTM me ol mate will get the electric shock dog collar out :eek2:

yes it was interesting - I had assumed dividend would increase following successful completion of the disposal of Northlands and plaza malls, but given the answer to a shareholder question it appears the situation us in fact the opposite! By that I mean the longer they hold Northlands & Plaza, the higher the likely dividend, as management said these were “high yield” assets (but carried higher risk than the rest of the portfolio - by which I think they meant earthquake risk). So the longer they keep these two malls,the higher AFFO will be, and consequently the dividend calculation.

of course on disposal KPG will get a big chunk of cash, but sounds like that might be used to reduce gearing further and used for capex projects.

[Waltzing]

BR (Black Rock) starting to buy at this price.

[winner69]

Black Rock now SSH

Something to do with global ETFs? …rather than how great the company is?

Hope they need to buy heaps more …KPG needs something to get their share price as management have been abject failures in this respect

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375532/350197.pdf

[RTM]

Black Rock now SSH

Something to do with global ETFs? …rather than how great the company is?

Hope they need to buy heaps more …KPG needs something to get their share price as management have been abject failures in this respect

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375532/350197.pdf

Someone needed to step in and fill the void left by Beagle.
Good to see. Hopefully they are in for the long term.
The scope of the transactions is a bit mind boggling!

[winner69]

Someone needed to step in and fill the void left by Beagle.
Good to see. Hopefully they are in for the long term.
The scope of the transactions is a bit mind boggling!

Thought you were going to tell us what ‘in specie’ meant:)

[RTM]

Thought you were going to tell us what ‘in specie’ meant:)

Nah...sure you are familiar with
https://www.investopedia.com/terms/i/in_specie.asp

[Waltzing]

comment removed.

[fungus pudding]

"abject failures in this respect"

slippery real estate agents.

they just cant help themselves.

As usual it is impossible to know who or what you are on about, or replying to with that stupid generalisation.

[Baa_Baa]

Black Rock now SSH

Something to do with global ETFs? …rather than how great the company is?

Hope they need to buy heaps more …KPG needs something to get their share price as management have been abject failures in this respect

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375532/350197.pdf

They're actively trading KPG most days, that notice has +37,680,867 vs -8,252,930 shares, aggregate +29,427,937 shares, average transaction price $1.214, high $1.28, low $1.15.

[Waltzing]

for those who cant see depth throughout the day KPG finished with over 400,000 to buy at 118.

this stock is looking like a good trading stock going forward if you dont want to risk MR B's theme for future profits distributions.

[Entrep]

Re-basing speaks of resetting of the base. From this we can infer that the forecast of 5.3 cps is the new base for the foreseeable future (a 24% reduction in dividends compared to pre-covid level's of 6.95 cps). A more stable income stream suggests they may not need to reset and rebase even lower in the foreseeable future subject to the numerous caveats that they mentioned which included no more lockdowns or untoward economic events, or words to that effect.

Couldn't have put it better myself. Expect 5.3 cps for the immediate future.

[Waltzing]

1.1 predicted on the US 10 year.

[Beagle]

1.1 predicted on the US 10 year.

Quite a few economists on CNBC are predicting 2.0% on the US ten year by Christmas. I think a lot depends upon whether they get another massive wave of Covid with the Delta variant or whether the immunization rates suppress that. Also it clearly depends upon how long the Fed keep suppressing bond rates with their bond buying program.

I reckon its flip a coin stuff and impossible to predict.

[Waltzing]

yes they are and some chartists on CNBC saying downward pressure might continue for a while down to 1.1

a certain ironman on fast money predicts long term deflation due to the impact of further investments in technology.

[Rawz]

Economists.. remember when the NZ economists said house prices would fall 10-15% after covid. Then literally the opposite happened x2. I.e. house price increased 20-30% everywhere lol. Economists can interpret data well but cant predict the future and often get it horribly wrong.

Long term rates may go up but wont the central banks just control the short end of the yield curve? Companies should just keep rolling debt on short term rates.

When is KPG getting back to mid $1.20s so i can sell the lot?

[Waltzing]

"When is KPG getting back to mid $1.20s so i can sell the lot?"

keep your order in the queue now as others will also be lining up....

[Waltzing]

https://www.stuff.co.nz/waikato-times/waikato-top-stories/125782778/hamiltons-cbd-skyline-heads-skyhigh

More development for central hamilton.

Its a development storm.

[RTM]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375812/350515.pdf

Duplicate Post

[RTM]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375812/350515.pdf

Duplicate Post

[RTM]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375812/350515.pdf

Duplicate Post

[RTM]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375812/350515.pdf

Chris jumped in a couple of days before me. Hope he knows what he is doing.

[RTM]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375812/350515.pdf

Duplicate Post

[RTM]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375812/350515.pdf

Duplicate Post

[RTM]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/375812/350515.pdf

Chris jumped in a couple of days before me. Hope he knows what he is doing. Some would say not.

[clown]

Someone's dumping shares today. Over 10mil @$1.175

I've just got one more block to get rid of, average of $1.3

[Rawz]

Someone's dumping shares today. Over 10mil @$1.175

I've just got one more block to get rid of, average of $1.3

Someone's buying big! Over 10mil @$1.175

[winner69]

Someone's buying big! Over 10mil @$1.175


Those buying will be very happy when price gets back to 150/160

[Beagle]

Those buying will be very happy when price gets back to 150/160

KPG directly in the firing line of a possible Delta variant outbreak...only a matter of time ? (one of the reasons I sold).

Those selling will be very happy if it goes back into the ~ 80 cent range again. Might be worth a trade if it gets down there again.

[Waltzing]

The numbers are up over ARG, GMT and KPG. GMT the highest by far.

Demographics plays a part and outside of (Tāmaki-makau-rau), Auckland the square meters per person is very high.

I think MR B is banking on the border controls being over whelmed by numbers.

[Habits]

KPG directly in the firing line of a possible Delta variant outbreak...only a matter of time ? (one of the reasons I sold).

Those selling will be very happy if it goes back into the ~ 80 cent range again. Might be worth a trade if it gets down there again.

You're dreaming! The only thing that is ~80 as far as KPG is concerned is the no of pages in this thread. After the AR were you positive about the company’s propects...

[Habits]

https://www.stuff.co.nz/waikato-times/waikato-top-stories/125782778/hamiltons-cbd-skyline-heads-skyhigh

More development for central hamilton.

Its a development storm.

How about the suburban shopping centres incl The Base... they could also benefit from a few highrise buildings

[LaserEyeKiwi]

How about the suburban shopping centres incl The Base... they could also benefit from a few highrise buildings

Indeed, KPG has already announced future development for Hamilton CBD in partnership with Tainui:


Tainui Group Holdings (TGH) and Kiwi Property (NZX:KPG) today announced the formation of a 50:50 joint venture over Centre Place North, paving the way to create a new heart for the Hamilton CBD, including refreshed retail experiences and a proposed office development.

The agreement is set to bring certainty and new energy to the revitalisation of Centre Place North, including exploring ways to reactivate one of the country’s first underground train stations, which sits mothballed beneath the centre.

Linda Te Aho, Chair of Te Arataura, the executive committee of Waikato-Tainui, said the iwi is pleased to play a key role in the rejuvenation of the Kirikiriroa CBD. “It’s pleasing to have reached a shared vision for how Centre Place North can contribute to a vibrant, modern and safe inner city. This is important whenua for us and it’s great to have the opportunity to shape the above ground presence for this property for generations to come,” Ms Te Aho said.

The Centre Place North joint venture extends the strong partnership between TGH and Kiwi Property, which dates back to May 2016, when Kiwi Property acquired a 50% share of The Base.

TGH CEO Chris Joblin: “We are excited by the potential of this extension of our relationship with Kiwi Property in Kirikiriroa-Hamilton. Building on our experience of working together as co-owners of The Base, we want to bring a 100-year view and some visionary thinking to create something vibrant and special to accelerate the ongoing transformation of the CBD,” Mr Joblin says.

Kiwi Property CEO, Clive Mackenzie added: “We’re delighted to be working with TGH to create an exciting new mixed-use destination for the people of the Waikato and beyond. With its pivotal location in the Hamilton CBD, Centre Place North has the potential to bring together an attractive retail, office and perhaps even residential offering. The joint venture with TGH will enable us to move more quickly to deliver this vision,” he said.

The new joint venture for Centre Place will take an initial pre-paid 100-year ground lease, with the underlying whenua (land) remaining in the ownership of Waikato-Tainui, including the land transferred to iwi ownership from beneath the existing carpark which was owned by Kiwi Property.

[Baa_Baa]

Blackrock reduce by 19,778,071 shares in the past two weeks (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/376304/351078.pdf). Still holding 83,745,944 shares. Points to the source of selling pressure and the higher than average trade volume recently. Wonder who was buying.

[Entrep]

Wonder who was buying. I've been picking some up

[Waltzing]

KPG centre place fighting back hard today and very busy foot traffic complete with piano player...

rebalanced most to retail sector but it will be a return hopefully sometime down the ticker tape.

[LaserEyeKiwi]

Blackrock reduce by 19,778,071 shares in the past two weeks (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/376304/351078.pdf). Still holding 83,745,944 shares. Points to the source of selling pressure and the higher than average trade volume recently. Wonder who was buying.

apparently ANZ was…

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/376992/351872.pdf

[Waltzing]

centre place saturday was busy around midday and retail looked to having a good day at the tills.

HLG is also sited in a central position along with G opposite it. Two of the prime sites in the mall.

[Beagle]

Blackrock reduce by 19,778,071 shares in the past two weeks (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/376304/351078.pdf). Still holding 83,745,944 shares. Points to the source of selling pressure and the higher than average trade volume recently. Wonder who was buying.


apparently ANZ was…

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/376992/351872.pdf

Serious investors looking to get out. I am pleased to be out. Reinvested proceeds from sales at average of $1.17 into WHS in the $3.30's and OCA in the $1.40's. Early days but it looks like a pretty good portfolio reallocation so far. Time will tell...

[Waltzing]

" Reinvested proceeds from sales at average of $1.17 into WHS in the $3.30's "

the hunt is fast in pursuit...that loud horn one can hear in the spring country side ..

KPG turn around a long way off.

[Beagle]

" Reinvested proceeds from sales at average of $1.17 into WHS in the $3.30's "

the hunt is fast in pursuit...that loud horn one can hear in the spring country side ..

KPG turn around a long way off.

Its cold and middle of winter...they can't even keep the lights on properly so the resident hound is absolutely determined to get a great feed with decisive actions like this https://www.bing.com/images/search?view=detailV2&ccid=kEQ548ng&id=20A79D7BEC625C9AE560ACEF9F741C1A9E9937A5&thid=OIP.kEQ548ng15shT7_SEjgebAHaEK&mediaurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR.9 04439e3c9e0d79b214fbfd212381e6c%3frik%3dpTeZnhocdJ %252fvrA%26riu%3dhttp%253a%252f%252fi.ytimg.com%25 2fvi%252fDhFk6hGPiBw%252fmaxresdefault.jpg%26ehk%3 dPmB7hF2AfTCckAdKw3uqHwVJa8hm%252fdKRkt4%252bjQxdp dQ%253d%26risl%3d%26pid%3dImgRaw%26r%3d0&exph=720&expw=1280&q=beagle+with+rabbit+in+mouth&simid=608036566011752337&FORM=IRPRST&ck=96E04E5FE2A09EB6264C1836581D1051&selectedIndex=0&idpp=overlayview&ajaxhist=0&ajaxserp=0

No pussy footing around with all this be nice crap Cindy keeps talking about https://www.bing.com/images/search?view=detailV2&ccid=wZZSH68P&id=7D6880E518206251D18F6E2EDF6FF1EB80744FBE&thid=OIP.wZZSH68PPp77yQThniKi2QHaE6&mediaurl=https%3a%2f%2fi.pinimg.com%2foriginals%2f 57%2f9f%2fda%2f579fda7f98eb6a544f822671ace8e3b3.jp g&cdnurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR.c19 6521faf0f3e9efbc904e19e22a2d9%3frik%3dvk90gOvxb98u bg%26pid%3dImgRaw%26r%3d0&exph=1424&expw=2144&q=beagle+hunt&simid=608025081270138702&FORM=IRPRST&ck=7D3902DC1598692EE5B8B6E8F33F6663&selectedIndex=0&idpp=overlayview&ajaxhist=0&ajaxserp=0

"KPG centre place fighting back hard today and very busy foot traffic complete with piano player..." Must admit I do love hearing the piano played well. That's a smart move. They usually have a pianist playing on the Earnslaw coming back across the lake from Walter Peak in Queenstown with a good old sing along. Very pleasant. https://www.queenstownnz.co.nz/listing/real-journeys/1255/

[Waltzing]

"Its cold and middle of winter.."

buying candles at the warehouse, batteries and extra lamps...

not upgrading the fleet yet.. and the Merc stays.

Still holding some KPG for the long term... so long one cant see the horizon..

[RTM]

"Its cold and middle of winter.."

buying candles at the warehouse, batteries and extra lamps...

not upgrading the fleet yet.. and the Merc stays.

Still holding some KPG for the long term... so long one cant see the horizon..



And 4,8% dividend while we wait. In the current interest rate environment...quite happy to wait as well.

[Beagle]

"Its cold and middle of winter.."

buying candles at the warehouse, batteries and extra lamps...

not upgrading the fleet yet.. and the Merc stays.

Still holding some KPG for the long term... so long one cant see the horizon..



Might make you feel like you're back in Europe, enjoy https://www.bing.com/videos/search?q=it%27s+a+long+way+to+tipperary+song&view=detail&mid=03848823BCA6FD497CB503848823BCA6FD497CB5&FORM=VIRE

[Waltzing]

"Might make you feel like you're back in Europe"

Ancestry is half Irish English and there is a local copy of the "Defenders of New Zealand" handed down the generations on the book shelves..

Family is mentioned in despatches back too not far from Tipperary.

KPG will we are certain get back to the 1.30's one days.

A buy at .90-1.0 surely...

[Getty]

Covid shutdown, yet highly exposed retail property stock KPG up 1.6% to $1.14 on $354K.

Our local dancing Viking must be on a raid.

I wonder if he wears a horned helmet like Bruce Sheppard used to wear at the FBU meetings, or was it TWR to acknowledge Olaf?

[Waltzing]

some serious building going on in CBD hamilton and district.

https://www.stuff.co.nz/waikato-times/business/126108943/sale-figures-soar-in-hamiltons-cbd

The drift from auckland might see this city with some serious gardens attracting new residents escaping the congestion giving the likes of KPG some support.

[Beagle]

We're not off to a good start. 10 cases in the first day is really UGLY, there's no way to sugar coat this. KPG looks very vulnerable to me. Very pleased I got out a while back.
https://www.nzherald.co.nz/nz/covid-19-coronavirus-delta-outbreak-three-cases-emerge-since-1pm-aut-student-among-cases-new-auckland-locations-of-interest-including-supermarkets/SL4NACJY4WGJ6XUHINUWLQEAVQ/

[LaserEyeKiwi]

We're not off to a good start. 10 cases in the first day is really UGLY, there's no way to sugar coat this. KPG looks very vulnerable to me. Very pleased I got out a while back.
https://www.nzherald.co.nz/nz/covid-19-coronavirus-delta-outbreak-three-cases-emerge-since-1pm-aut-student-among-cases-new-auckland-locations-of-interest-including-supermarkets/SL4NACJY4WGJ6XUHINUWLQEAVQ/

What vulnerability do you see? Worst case scenario we are in a month+ long lockdown and they have to give some rent relief to some of their speciality retail tenants - which is the same as what happened last year and the company wasn’t in any danger financially. Doesn’t really change the long term prospects for KPG at all. In fact with the resurgence payments now, it’s likely rent relief will be minimal, and also their growing office portfolio doesn’t have the same rent relief requirements.

[Cricketfan]

We're not off to a good start. 10 cases in the first day is really UGLY, there's no way to sugar coat this. KPG looks very vulnerable to me. Very pleased I got out a while back.
https://www.nzherald.co.nz/nz/covid-19-coronavirus-delta-outbreak-three-cases-emerge-since-1pm-aut-student-among-cases-new-auckland-locations-of-interest-including-supermarkets/SL4NACJY4WGJ6XUHINUWLQEAVQ/

Is COVID a surprise to you? Not sure why you'd ever invest in retail property if you were worried about it.

[Rawz]

What vulnerability do you see? Worst case scenario we are in a month+ long lockdown and they have to give some rent relief to some of their speciality retail tenants - which is the same as what happened last year and the company wasn’t in any danger financially. Doesn’t really change the long term prospects for KPG at all. In fact with the resurgence payments now, it’s likely rent relief will be minimal, and also their growing office portfolio doesn’t have the same rent relief requirements.


Is COVID a surprise to you? Not sure why you'd ever invest in retail property if you were worried about it.

Beagle secretly loves KPG, just wants a good feed under a buck for it. Otherwise he's not interested. Unfortunately for him it will never go under $1.10

[Shareguy]

I do not think that the risks are currently priced into the stock price. I have concerns regarding the valuations of the properties and therefore it’s asset value which will be under further stress with Covid and a property slow down which will happen. They do have some great assets especially Sylvia park and Lynn mall and the Dury development has the potential to add significant earnings. We only need to look at New South Wales to see how long these lockdowns could go on for. Apart from the rent relief that will need to be given to Tenants the longer it goes on increases the likely hood that some of these tenants just won’t survive. Comparing other property company’s that are trading at a premium to nav, I can only conclude that the market does not think the current NAV is realistic for KPG or am I missing something?

[Waltzing]

as stated previously could go on for a month and it now looks like auckland wont come out of this for a month.

north island will be level 4 for at least 2 weeks.

could see KPG under 1.10 or at 1.10 briefly.

[winner69]

as stated previously could go on for a month and it now looks like auckland wont come out of this for a month.

north island will be level 4 for at least 2 weeks.

could see KPG under 1.10 or at 1.10 briefly.

Waltzingman — I reckon Auckland (and maybe whole country) will still be in lockdown at Christmas (15 weeks)

That’ll make xmas shopping at Sylvia Park interesting eh

[LaserEyeKiwi]

I do not think that the risks are currently priced into the stock price. I have concerns regarding the valuations of the properties and therefore it’s asset value which will be under further stress with Covid and a property slow down which will happen. They do have some great assets especially Sylvia park and Lynn mall and the Dury development has the potential to add significant earnings. We only need to look at New South Wales to see how long these lockdowns could go on for. Apart from the rent relief that will need to be given to Tenants the longer it goes on increases the likely hood that some of these tenants just won’t survive. Comparing other property company’s that are trading at a premium to nav, I can only conclude that the market does not think the current NAV is realistic for KPG or am I missing something?

Less than half of KPGs tenants are speciality retail stores - and they all are getting more financial support from government than they did during last years lockdown (wage subsidy + lump sum resurgence payments), meaning the likelihood of rent relief need to those tenants is diminished, as government payments are effectively covering all operating expenses this time round. The rest of KPGs tenants are office tenants (most of who are carrying on as normal working from home), government departments and essential stores that remain open (supermarkets, medical etc) - none of whom will require rent relief.

Anyway, looking past the short term dynamics, the market is forward looking and we know lockdowns are temporary in nature and extended ones will be a thing of the past once vaccination is in the 80-90%+ range by early 2022. We haven’t seen anything like widespread retail failures overseas, and we definitely won’t see it here with our government support directly to businesses. On the contrary retail activity is absolutely booming (if you haven’t noticed from earnings reports, NZ retail companies are reporting record revenue and profits) and retail will again be back to that level when lockdowns ends, with likely a big one off pent up demand boost again as all the deferred discretionary spending once again gets unleashed.

[Waltzing]

winner(n)

the difference between the other mob is that NZ just cut the transmission.

as a stats person you will know the next 7 days will show the geo spread.

You may have seen the full suited PPE on ONE news.

Going forward would want a full suite to shop and travel back to europe.

Probably the end of visiting crowded places in europe without some form of PPE.

Ok back to the 5 screens all busy showing multi threaded data.

[fungus pudding]

Less than half of KPGs tenants are speciality retail stores - and they all are getting more financial support from government than they did during last years lockdown (wage subsidy + lump sum resurgence payments), meaning the likelihood of rent relief need to those tenants is diminished, as government payments are effectively covering all operating expenses this time round. The rest of KPGs tenants are office tenants (most of who are carrying on as normal working from home), government departments and essential stores that remain open (supermarkets, medical etc) - none of whom will require rent relief.

Anyway, looking past the short term dynamics, the market is forward looking and we know lockdowns are temporary in nature and extended ones will be a thing of the past once vaccination is in the 80-90%+ range by early 2022. We haven’t seen anything like widespread retail failures overseas, and we definitely won’t see it here with our government support directly to businesses. On the contrary retail activity is absolutely booming (if you haven’t noticed from earnings reports, NZ retail companies are reporting record revenue and profits) and retail will again be back to that level when lockdowns ends, with likely a big one off pent up demand boost again as all the deferred discretionary spending once again gets unleashed.

I have well into seven figures in LPT's - and not one cent in any other shares, apart fom a relatively small amount in Milford Assets. Bricks and mortar assets will still be there, albeit through a few ups and downs, long after many trading organisations have folded. Besides I like the generous amount of PIE income I receive. 'It's set and forget' stuff.

[Beagle]

Waltzingman — I reckon Auckland (and maybe whole country) will still be in lockdown at Christmas (15 weeks)

That’ll make xmas shopping at Sylvia Park interesting eh

I hope you are wrong because it will cause all sorts of grief.

Many will already be aware of my concerns regarding the long term underperformance of KPG which I won't repeat, its all on the record. I note they haven't sold their problematic regional malls despite taking massive write-down's in recent years and a further write-down post the most recent balance date, (source most recent analysts call).

I reckon its 50/50 whether we can get on top of this outbreak or whether it gets on top of us. Malls could be closed for many, many months, just look at the appalling situation developing in NSW. The risks outweigh the very modest returns at present and I think the discount to NTA is a red herring. The thing to focus on is the appalling long term track record of management over the years and this companies woeful inability to keep up with other property asset prices.

Others will have different opinions and that's fine.
I think you've got to get this dirt cheap to make this a worthwhile investment.

[LaserEyeKiwi]

Waltzingman — I reckon Auckland (and maybe whole country) will still be in lockdown at Christmas (15 weeks)

That’ll make xmas shopping at Sylvia Park interesting eh

I would take the other side of that bet. No other country has come to there senses with the “go (very) hard, go (very) early” strategy like we have.

The one thing I think we will learn from this is the futility of relying on other countries covid response system when opening travel bubbles with them. I don’t think we try that again until we are over 80% vaccination level (so December maybe IF NSW gets under control).

[Biscuit]

I would take the other side of that bet.

I think we have a reasonable chance of getting on top of it. But I'm not so sure that I would bet on it. The long term effect on KPG will be minimal either way.

[Waltzing]

MR B is right about KPG's management but a rising tide often lifts all boats and QE is that tide.

As for growth stocks these are NOT, defensive only.

Google class A was the go and its expanding its hardware (pixel phones) options and starting stores.

Any big pull backs and move to growth before the 10 yrs narrows the spread because it doubtful these will increase yields.

The only hope for these is that inflation continues to be hit hard by technology keeping the core CPI's under long term downward pressure.

Defensive only stocks.

[Biscuit]

MR B is right about KPG's management but a rising tide often lifts all boats and QE is that tide.

As for growth stocks these are NOT, defensive only.

Google class A was the go and its expanding its hardware (pixel phones) options and starting stores.

Any big pull backs and move to growth before the 10 yrs narrows the spread because it doubtful these will increase yields.

The only hope for these is that inflation continues to be hit hard by technology keeping the core CPI's under long term downward pressure.

Defensive only stocks.

Over the last couple of months KPG has a falling share price against a rising OBV, could be some smart money accumulating? Anyway, I bought some this morning - looks cheap to me.

[Rawz]

Over the last couple of months KPG has a falling share price against a rising OBV, could be some smart money accumulating? Anyway, I bought some this morning - looks cheap to me.

Trading at almost 20% discount to NTA. Property a pretty simple game isnt it? If you can buy any property in NZ with a 20% discount you got to be doing alright, surely. Even with a few dog regional malls on the books.

[Beagle]

A lot of people think that once we reach ~ 80% vaccination rates the risks to large gatherings will abate but latest data from Israel who were once the poster child for a pathway out of this mess suggests otherwise.
https://www.nzherald.co.nz/world/covid-19-coronavirus-israel-once-the-model-for-beating-covid-19-faces-new-surge-of-infections/JUDACHBPTDJVSZ2T3AYJFEQ7TE/ Paywalled. Malls look especially vulnerable to me.

[LaserEyeKiwi]

Trading at almost 20% discount to NTA. Property a pretty simple game isnt it? If you can buy any property in NZ with a 20% discount you got to be doing alright, surely. Even with a few dog regional malls on the books.

worth remembering that while they have them as “held for sale” those “regional malls” (not sure why they use that term - Christchurch & Palmerston North CBD are quite “metro”) generate a lot of cash (while they are open at least). Management have said as much that the longer it takes to sell them, the higher earnings will be above expectations in the interim period - as the cash return from those malls are very high (despite the decrease in carrying value, those malls are 99% occupied and have zero planned capex).

[Waltzing]

"Even with a few dog regional malls on the books."

centre place hamilton would be considered one of their low performance malls but 2 saturdays ago it had good foot traffic midday and the young business man from the sub continent who owns a big cafe always like to chat business.

He said business was good that day.

He had no plans to sell and move but more likely expand to another mall site in the region as the country opens up.

was selling his Merc and moving up to an SUV Merc.

"Malls look especially vulnerable to me."

yes thats the down side going forward.

but think what it could do to sports events and music festival's... super spreader events.

You will need a covid test and a health pass before entry? Highly likely you could see a society changing the way it functions.

[LaserEyeKiwi]

A lot of people think that once we reach ~ 80% vaccination rates the risks to large gatherings will abate but latest data from Israel who were once the poster child for a pathway out of this mess suggests otherwise.
https://www.nzherald.co.nz/world/covid-19-coronavirus-israel-once-the-model-for-beating-covid-19-faces-new-surge-of-infections/JUDACHBPTDJVSZ2T3AYJFEQ7TE/ Paywalled. Malls look especially vulnerable to me.

In the USA (where covid is obviously endemic) mall attendance is almost on par with pre-pandemic same month 2019 levels. Human behavior adjusts to the “new normal” pretty quickly.

[RTM]

He He, I can remember the good old days ( Roger Douglas ) when my home mortgage rate was 20% !!

Yeah, we had three mortgages on one of our houses...18, 21 & 24%.
But then again...things were so easy when we were growing up...weren't they ?

[fungus pudding]

Yeah, we had three mortgages on one of our houses...18, 21 & 24%.
But then again...things were so easy when we were growing up...weren't they ?

No. .

.

[SPC]

"was selling his Merc and moving up to an SUV Merc."
I wouldn't rely on that as a sign of financial intelligence or future prosperity, quite the opposite. What will each be worth in 3 years?

[fungus pudding]

"was selling his Merc and moving up to an SUV Merc."
I wouldn't rely on that as a sign of financial intelligence or future prosperity, quite the opposite. What will each be worth in 3 years?

Does that relate to something, or are you just practising your typing?

[HCR20]

Depends. I'd rather pay big interest on a small loan as compared to low interest on a giant loan.

[Waltzing]

"I wouldn't rely on that as a sign of financial intelligence or future prosperity"

a sign of his confidence.....misplaced or not.

Several of these people have computer science degrees from India and can add and subtract..

big expensive SUV; its like their love of gold. They love to show off their success to each other.

If KPG management become to greedy or difficult he will sell.

[Waltzing]

SP holding up well....no sub 1.10 yet.

Investors are backing the aucklander's to hit it out of the park.

[SPC]

Well it looks like all those non pedigree mutts that dined at the $1.12 KPG food bowl have walked off with satisfied tummies at this point.
Let's be honest they aren't making land anymore (except in the Spratleys) and it's probably easier to turn a defunct mall in to warehousing than the reverse..?

[Beagle]

Well it looks like all those non pedigree mutts that dined at the $1.12 KPG food bowl have walked off with satisfied tummies at this point.
Let's be honest they aren't making land anymore (except in the Spratleys) and it's probably easier to turn a defunct mall in to warehousing than the reverse..?

This well bred old hound has run his snout very closely over the food bowl and noticed a couple of things. The only area of strong growth with this is in the amount of food management take out of the bowl first and the size of the scraps left over keeps getting smaller and smaller in real inflation adjusted terms every year. The trend is not your friend and my long range sniffer detected no foreseeable change to this trend anytime soon. No way one gets fat on those diminishing scraps. KPG dog food bowl is good for mutts on a diet :p

[SPC]

Well speaking in terms of net digestible protein the KPG feed bowl offers a protein return of around circa 4.6 % (net protein grams) per $1.12 scoop whereas for example the GMT feed bowl offers a bit over 2 % (net protein grams) for a scoop price at around $2.59. The average mutt would need a fairly sensitive tummy to warrant that premium. ARG suits this old Tom although the odd sachet of KPG fills the gap regularly.

[Beagle]

The 5.3 cents per share forecast was contingent on no more lockdowns. Management keep their dog bowls at home and scoff heaps with or without lockdowns.

With KPG there always seems to be an excuse why they can't pay a proper dividend and there is no plan to get back to 6.95 cps pre covid, nothing even remotely resembling a plan. Management didn't even appear to give the impression at their most recent analysts call that getting back to pre covid level's of dividends was a priority of any kind. WTF ?? Is that the reason institutions are selling down their holdings ?

In fact answers in that call tended to indicate they are trying to give more stable returns going forward...in other words trying to stop the trend downwards while all the time taking ever increasing rewards themselves. Big talk about plans for Drury...but all in partnerships with others. How have their other partnerships been working out ? Is this the reason for their ever decreasing dividends ?

I reckon a sizeable discount to NTA is justified based on management's poor performance.

[nztx]

This well bred old hound has run his snout very closely over the food bowl and noticed a couple of things. The only area of strong growth with this is in the amount of food management take out of the bowl first and the size of the scraps left over keeps getting smaller and smaller in real inflation adjusted terms every year. The trend is not your friend and my long range sniffer detected no foreseeable change to this trend anytime soon. No way one gets fat on those diminishing scraps. KPG dog food bowl is good for mutts on a diet :p


so on that, we wait for an 87.5c moment to present itself ? ;)

could happen .. when most of the pack tire of the commercial plot, sticks & mortar ..
and political ups & downs being played out ..

[Beagle]

so on that, we wait for an 87.5c moment to present itself ? ;)

could happen .. when most of the pack tire of the commercial plot, sticks & mortar ..
and political ups & downs being played out ..

Less than a buck for this old mutt.

[Waltzing]

up 117

rising tide ...

lifting all leaky boats

its got shiny gunnels though....and a nice desk..

[Biscuit]

up 117

rising tide ...

lifting all leaky boats .......

A few leaks sure, but look at those shiny gunnels...

[Waltzing]

" shiny gunnels."

that big shiny auckland flag ship could be back in action in a month time.

anyone who bought at 1.12 could be having Gin and Tonic on the deck after all.

[SPC]

A box in the garage and a reasonably priced can of KPG with a %4+ yield suits this old Tom. Looking for tonights meal, not next year's. ARG is tastier but whatever lands on special..
In the time of covid 'yield is your shield'

[value_investor]

Coming the end of the month, rents due on the 1st and a lot of tenants now will be asking for rent relief given how long it looks like we are going to be in Level 4 and Level 3.

The longer this goes, the uglier it gets for earnings. I'd back up the truck if the prices get closer to a $1. I don't see this share price being warranted pre covid, I don't think it effects the company in the long term.

[Shareguy]

I’m surprised the share price is holding up so well. The government is talking again about forcing rent relief if the lease does not have relief clause.

[fungus pudding]

I’m surprised the share price is holding up so well. The government is talking again about forcing rent relief if the lease does not have relief clause.

Hopefully followed by landlord relief, followed hotly by a handout to the mortgagee of course.

[Beagle]

" shiny gunnels."

that big shiny auckland flag ship could be back in action in a month time.

anyone who bought at 1.12 could be having Gin and Tonic on the deck after all.

Or...we could still be in level 4 in well into October or even longer :eek2: Not sure that (already very miserable), 5.3 cent annual dividend rate is safe any more as directors specifically mentioned the caveat of "no lockdowns". Maybe they just cancel the interim dividend completely like they did last time ? Of course management with their ever increasing remuneration packages and incentives will still be gorging at the trough all year long no matter how long and how many lockdowns there are. Management remuneration...the one and only component of the Statement of Financial performance that's shown strong growth !

No news yet on trying to sell their problematic regional malls...not surprised. Tens of millions more in write-downs coming there on top of the tens of millions they've already lost ? No worries, just sweep the problems under the carpet because they have a whole new strategy to (mis?)manage.

Disc: Super happy I sold out of this woefully under performing stock and got out without a loss. Talk about dodging a bullet !

[Entrep]

Disc: Super happy I sold out of this woefully under performing stock and got out without a loss. Talk about dodging a bullet !

I'm fairly certain everyone knows you no longer hold by. You must have posted the same thing over a dozen times in this thread and others. Any particular reason for that?

[mike2020]

To be fair multiple posters comment on the fact it's lower than asset value etc, repeatedly. I for one like a little barking. No one scrolls back 6 pages, if you want to help people or even be convinced otherwise of your own opinion, keep it fresh.

[ados_nz]

I'm fairly certain everyone knows you no longer hold by. You must have posted the same thing over a dozen times in this thread and others. Any particular reason for that?

Beagles a trader... probably has shorts open?

[LaserEyeKiwi]

Reposting and updating some info that I shared a couple of weeks back:

- Less than half of KPGs tenants are speciality retail stores - and they all are getting more financial support from government than they did during last years lockdown (wage subsidy + lump sum resurgence payments),

- The rest of KPGs tenants are office tenants (most of who are carrying on as normal working from home), government departments and essential stores that remain open (supermarkets, medical etc) - none of whom will require rent relief.

- KPGs retail assets south of Auckland will be reopening fully on Wednesday (initially for click and collect and takeaway food operations), further reducing likelihood of rent relief to those speciality businesses - and if Level 2 arrives next week then even better.

- The income from “regional malls” like Northlands in Christchurch & The Plaza in Palmerston North (currently listed as “held for sale’) is not actually accounted for in KPG annual guidance. KPG management has said the longer these assets remain on their books, then the higher profits will be in the short term. So important to keep in mind that those regional malls are reopening fully shortly and have and will continue to be generating cashflow while they remain unsold, which will help counteract any rent relief payments that may occur in the Auckland assets. This is in addition of course to all of the continued uninterrupted cashflow being generated from KPGs commercial office assets nationwide, along with the cashflow from the large essential large anchor tenant stores (supermarkets etc obviously).

I think Auckland will likely be in level 4 for another few weeks at least, but I think the market has learnt that this is transient and a relatively minor concern long term for KPG. Especially as retail post lockdown has proved very resilient - if not outright booming - there have been no waves of retail bankruptcies, there have been no drop in retail rental yields (they have actually increased rents), there has in fact been more investment in retail assets across New Zealand.

This is the reason KPGs share price has essentially just seen a blip lower in this latest outbreak (remember it dropped to 83c last year when everyone was freaking out).

12899

[Biscuit]

Reposting and updating some info that I shared a couple of weeks back:

- Less than half of KPGs tenants are speciality retail stores - and they all are getting more financial support from government than they did during last years lockdown (wage subsidy + lump sum resurgence payments),

- The rest of KPGs tenants are office tenants (most of who are carrying on as normal working from home), government departments and essential stores that remain open (supermarkets, medical etc) - none of whom will require rent relief.

- KPGs retail assets south of Auckland will be reopening fully on Wednesday (initially for click and collect and takeaway food operations), further reducing likelihood of rent relief to those speciality businesses - and if Level 2 arrives next week then even better.

- The income from “regional malls” like Northlands in Christchurch & The Plaza in Palmerston North (currently listed as “held for sale’) is not actually accounted for in KPG annual guidance. KPG management has said the longer these assets remain on their books, then the higher profits will be in the short term. So important to keep in mind that those regional malls are reopening fully shortly and have and will continue to be generating cashflow while they remain unsold, which will help counteract any rent relief payments that may occur in the Auckland assets. This is in addition of course to all of the continued uninterrupted cashflow being generated from KPGs commercial office assets nationwide, along with the cashflow from the large essential large anchor tenant stores (supermarkets etc obviously).

I think Auckland will likely be in level 4 for another few weeks at least, but I think the market has learnt that this is transient and a relatively minor concern long term for KPG. Especially as retail post lockdown has proved very resilient - if not outright booming - there have been no waves of retail bankruptcies, there have been no drop in retail rental yields (they have actually increased rents), there has in fact been more investment in retail assets across New Zealand.

This is the reason KPGs share price has essentially just seen a blip lower in this latest outbreak (remember it dropped to 83c last year when everyone was freaking out).



I agree. I picked up some more last week. On balance volume has been going up since end of June and I'd say the current weakness in the share price has no real legs.

[Habits]

"
- Less than half of KPGs tenants are speciality retail stores - and they all are getting more financial support from government than they did during last years lockdown (wage subsidy + lump sum resurgence payments),

- The rest of KPGs tenants are office tenants (most of who are carrying on as normal working from home), government departments and essential stores that remain open (supermarkets, medical etc) - none of whom will require rent relief.

- KPGs retail assets south of Auckland will be reopening fully on Wednesday (initially for click and collect and takeaway food operations), further reducing likelihood of rent relief to those speciality businesses - and if Level 2 arrives next week then even better.

- The income from “regional malls” like Northlands in Christchurch & The Plaza in Palmerston North (currently listed as “held for sale’) is not actually accounted for in KPG annual guidance. KPG management has said the longer these assets remain on their books, then the higher profits will be in the short term. So important to keep in mind that those regional malls are reopening fully shortly and have and will continue to be generating cashflow while they remain unsold, which will help counteract any rent relief payments that may occur in the Auckland assets. This is in addition of course to all of the continued uninterrupted cashflow being generated from KPGs commercial office assets nationwide, along with the cashflow from the large essential large anchor tenant stores (supermarkets etc obviously).

I think Auckland will likely be in level 4 for another few weeks at least, but I think the market has learnt that this is transient and a relatively minor concern long term for KPG. Especially as retail post lockdown has proved very resilient - if not outright booming - there have been no waves of retail bankruptcies, there have been no drop in retail rental yields (they have actually increased rents), there has in fact been more investment in retail assets across New Zealand.

This is the reason KPGs share price has essentially just seen a blip lower in this latest outbreak (remember it dropped to 83c last year when everyone was freaking out)."

Thanks LEK

[winner69]

Drama at Lynn Mall

https://www.stuff.co.nz/national/300384815/man-shot-dead-by-police-after-injuring-multiple-people-at-lynn-mall-supermarket-auckland

[thebusinessman]

That sucks about the attack.

In unrelated news, I couldn't resist a little topup today, feel like the potential lockdown woes are already priced in and see some potential upside.

[Aaron]

Already a growing trend and definitely seen a switch to online shopping in my household. I wonder if commercial buildings have the same issue as retail to a certain degree with more people working from home becoming permanent.

Hard not to see malls continuing but they might not have the same bargaining power when it comes time to renew their leases.

https://www.abc.net.au/news/2021-09-07/shopping-centre-online-retail-future-post-covid-pandemic/100429848

[LaserEyeKiwi]

Already a growing trend and definitely seen a switch to online shopping in my household. I wonder if commercial buildings have the same issue as retail to a certain degree with more people working from home becoming permanent.

Hard not to see malls continuing but they might not have the same bargaining power when it comes time to renew their leases.

https://www.abc.net.au/news/2021-09-07/shopping-centre-online-retail-future-post-covid-pandemic/100429848

in the last 12 months (so post the pandemic start) KPG has seen an increase in leasing rates in both their commercial and retail assets. But it definitely is better to have quality assets in the first place.

[Monarch]

Already a growing trend and definitely seen a switch to online shopping in my household. I wonder if commercial buildings have the same issue as retail to a certain degree with more people working from home becoming permanent.

Hard not to see malls continuing but they might not have the same bargaining power when it comes time to renew their leases.

https://www.abc.net.au/news/2021-09-07/shopping-centre-online-retail-future-post-covid-pandemic/100429848

I think we will see concentration of retail property, with more/the same amount of customers going to an ever dwindling group of malls/centres. Physical stores just cant compete on price with online, and they shouldn't. I think malls will become more about experiences and services rather than shopping for goods. I've seen this overseas. The malls that have activities (e.g. arcades, indoor archery, gyms, waterparks, ice skating etc) and good food are always bustling, simply due to the fact that people still want to go out. Online shopping gets them the goods they want cheaper, but doesn't satisfy the need to leave the house, to hang out with friends/family. So long as KPG plans ahead, with activity centres ready to replace retail blocks, things will be fine.

[Beagle]

https://www.nzherald.co.nz/business/auckland-council-examining-360-to-660-drury-development-fee-rise-to-cover-growth-costs/L5QSMJPYB264ROXFNOASHGODSU/

Auckland Council examining 360% to 660% Drury development fee rise to cover growth costs

[Aaron]

https://www.nzherald.co.nz/business/auckland-council-examining-360-to-660-drury-development-fee-rise-to-cover-growth-costs/L5QSMJPYB264ROXFNOASHGODSU/

Auckland Council examining 360% to 660% Drury development fee rise to cover growth costs

Being a developer carries a lot more risk than just renting out existing properties that is for sure. Has KPG ever done anything like the development at Drury before? On a per section basis that is pretty significant increase. Rampant property prices might keep them in the black.

[Beagle]

Being a developer carries a lot more risk than just renting out existing properties that is for sure. Has KPG ever done anything like the development at Drury before? On a per section basis that is pretty significant increase. Rampant property prices might keep them in the black.

I don't believe they have which is one of the key risks I identified.

[Shareguy]

FB view today

KPG has the largest impact from the first lockdown with NZ$20m, or 8% of gross rental income, rental abatements provided to tenants (Figure 4). The smallest impacts were on industrial, supermarket, and hospital landlords. KPG has a provision for another lockdown in its guidance the current situation is likely more restrictive than they had provided for, and the longer Level 4 persists in Auckland the more likely the impact will be larger than provisions allow for. As reported in the newspapers some private landlords have provided generous abatements to hospitality and retail tenants with Smales Farm reducing rent by 100% .

[LaserEyeKiwi]

Being a developer carries a lot more risk than just renting out existing properties that is for sure. Has KPG ever done anything like the development at Drury before? On a per section basis that is pretty significant increase. Rampant property prices might keep them in the black.

The current council development fees in Auckland are ridiculously cheap ($11k). Increasing them by 360% to 660% will simply bring them more in line with the council development fees I’m facing here in Wellington for a new build we are contemplating at present ($60k+ for a small 3 bedroom house). These are costs that will all flow through to whoever is buying the residential properties and doesn’t really change the equation for KPG and it’s partners on this project. Remember that KPG isn’t going to own any of the suburban housing long term in this project, but instead will own the town center precinct.

Also remember the government is offering substantial subsidies for new infrastructure for developments like Drury which will offset the council development costs.

[Aaron]

The current council development fees in Auckland are ridiculously cheap ($11k). Increasing them by 360% to 660% will simply bring them more in line with the council development fees I’m facing here in Wellington for a new build we are contemplating at present ($60k+ for a small 3 bedroom house). These are costs that will all flow through to whoever is buying the residential properties and doesn’t really change the equation for KPG and it’s partners on this project. Remember that KPG isn’t going to own any of the suburban housing long term in this project, but instead will own the town center precinct.

Also remember the government is offering substantial subsidies for new infrastructure for developments like Drury which will offset the council development costs.

I would have thought a large increase in input costs in any project means a decrease in profit or an increase in sale price to cover it, which may discourage potential buyers. If you can charge just about whatever you like for a house and still find buyers then you might be right.

[LaserEyeKiwi]

I would have thought a large increase in input costs in any project means a decrease in profit or an increase in sale price to cover it, which may discourage potential buyers. If you can charge just about whatever you like for a house and still find buyers then you might be right.

you are right of course, but yes in general costs can be passed on for the most part. Remember how great an increase in residential section prices have been over the last few years vs when KPG acquired the land and initially evaluated their business case. These extra costs (potential development fee increases & inflation of costs involved in preparing the infrastructure etc are dwarfed by the increase in asset value and also supplemented by new government infrastructure subsidy for these large projects). Also KPG are not building the 20,000+ suburban houses on this project, that will be done by house building firms who will be buying the sections first.

[Habits]

you are right of course, but yes in general costs can be passed on for the most part. Remember how great an increase in residential section prices have been over the last few years vs when KPG acquired the land and initially evaluated their business case. These extra costs (potential development fee increases & inflation of costs involved in preparing the infrastructure etc are dwarfed by the increase in asset value and also supplemented by new government infrastructure subsidy for these large projects). Also KPG are not building the 20,000+ suburban houses on this project, that will be done by house building firms who will be buying the sections first.

Not as many as 20000+ suburban houses, this would be 25 sqm each house and no allowance for roads parks etc. 2000 homes perhaps. Unless there are thousands of high rise apartments but I dont know if that would be attractive for your average first home owner

[LaserEyeKiwi]

KPG bounced strongly yesterday afternoon as it was signaled the end is in sight for the current lockdown in Auckland.

Further upside for retail stocks might be coming today as the PM on this mornings media interviews has indicated we won’t be using lockdowns again in future. Plan seems to be to tackle the virus with a high vaccination rate and ongoing mask usage and self-isolating individuals after exposure etc. (I wouldn’t be surprised if we see law changes allowing private businesses to reject non-vaccinated individuals on their premises).

[Waltzing]

Yes your right the end is in sight because level 3 will be in next no matter what. Failure to understand that its business that runs a country and they thought they had the winning formula... NO business is the only solution to a modern society but i still dont think MR B will be buying back in to this one, more WHS or even a Tech ETF.

lets face it, they have had since last april and they blew it..

Barry Soper: Covid elimination strategy ditched by most of the world as being unworkable - NZ Herald (https://www.nzherald.co.nz/nz/barry-soper-covid-elimination-strategy-ditched-by-most-of-the-world-as-being-unworkable/GC4AGF3ZCZJBUAT2GIV7TEONFM/)

[fungus pudding]

KPG bounced strongly yesterday afternoon as it was signaled the end is in sight for the current lockdown in Auckland.

Further upside for retail stocks might be coming today as the PM on this mornings media interviews has indicated we won’t be using lockdowns again in future. Plan seems to be to tackle the virus with a high vaccination rate and ongoing mask usage and self-isolating individuals after exposure etc. (I wouldn’t be surprised if we see law changes allowing private businesses to reject non-vaccinated individuals on their premises).

Why would that require a law change?

[bull....]

KPG bounced strongly yesterday afternoon as it was signaled the end is in sight for the current lockdown in Auckland.

Further upside for retail stocks might be coming today as the PM on this mornings media interviews has indicated we won’t be using lockdowns again in future. Plan seems to be to tackle the virus with a high vaccination rate and ongoing mask usage and self-isolating individuals after exposure etc. (I wouldn’t be surprised if we see law changes allowing private businesses to reject non-vaccinated individuals on their premises).

no further lockdowns is a pipe dream .
overseas shows all countries that are living with covid still have to have some form of lockdown due to health systems becoming overwelmed with sick people and yes even the vaxed ones still get sick and some still die. so its more like a statement of we give up ardern laying the groundwork for.

[LaserEyeKiwi]

no further lockdowns is a pipe dream .
overseas shows all countries that are living with covid still have to have some form of lockdown due to health systems becoming overwelmed with sick people and yes even the vaxed ones still get sick and some still die. so its more like a statement of we give up ardern laying the groundwork for.

i would disagree with that one - most overseas countries with high vaccination rates have “restrictions” (equivalent to Level 2 here) not “lockdowns” (equivalent to level 3/4 here). Eg look to Europe/UK where fully vaccinated rates are ~70%+ and they have mask protocols etc, but all retail/hospitality venues are open.

Going to “restrictions” only (with countermeasures like isolation for close contacts/contact tracing remaining in place for outbreaks) once we get to a sufficiently high vaccination rate is the endgame and always has been for New Zealand: elimination was the goal to avoid overwhelming health system, and vaccinations replace lockdowns in doing that job of not overwhelming the health system once we get to a high enough rate.

it makes perfect sense when you see data like the charts below (and this is from USA where vaccination rate is a comparatively low 53% fully vaccinated).

12956

[Beagle]

Yes your right the end is in sight because level 3 will be in next no matter what. Failure to understand that its business that runs a country and they thought they had the winning formula... NO business is the only solution to a modern society but i still dont think MR B will be buying back in to this one, more WHS or even a Tech ETF.

lets face it, they have had since last april and they blew it..

Barry Soper: Covid elimination strategy ditched by most of the world as being unworkable - NZ Herald (https://www.nzherald.co.nz/nz/barry-soper-covid-elimination-strategy-ditched-by-most-of-the-world-as-being-unworkable/GC4AGF3ZCZJBUAT2GIV7TEONFM/)

I suggest you re-read my assessment of the long term performance of this company. Lockdown's or not, they have been a really shocking under-performer compared to every other listed property company. The only conclusion you can logically reach is that management are incompetent.

[LaserEyeKiwi]

Why would that require a law change?

I wasn’t sure on that one, I’m no lawyer - I know employers are being challenged in court for requiring vaccinations, so I figure there might also be some legal challenges around the general public being barred from private businesses. At the very least it probably needs to be covered by a health notice in the same way as masking and QR scanning/manual logging now is. Also some grey areas to iron out such as who gets an exemption (obviously kids under 12 would at present as they can’t get the vaccine, although the 5-11 year olds seem very close to getting approval - which will be good for schools).

Just thinking further it will actually be easier for malls to implement a “vaccine passport” scenario, as it could be done at mall entrances/exits rather than requiring a staff member doing it at every individual store entrance.

I don’t think this happens until closer to year end though, to give time for all those who want to be vaccinated to actually get there 2nd dose done. Vaccine requirements to enter private businesses will be a good “stick” to run alongside some “carrots” in getting the vaccine hesitant over the line.

I don’t have any issues with requiring vaccinations/masks, just like I don’t have any issues with other basic societal requirements like obeying traffic laws; wearing clothes in public, not being allowed to carry around radioactive substances or live explosives in public etc.

[LaserEyeKiwi]

A good comparison, and we aren’t too far away from catching the EU majors in vaccinations with at least one dose. New Zealand overindexing on first doses vs fully vaccinated, but first dose recipients are basically close to guaranteed to following through on a 2nd dose, so gives a good indication on our near term fully vaccinated rate.

(also worth noting our percentage of “booked to receive a 1st dose” is running about 8% higher than the number below, which will pull us ahead of the US, Japan & Germany.)

12957

[bull....]

i would disagree with that one - most overseas countries with high vaccination rates have “restrictions” (equivalent to Level 2 here) not “lockdowns” (equivalent to level 3/4 here). Eg look to Europe/UK where fully vaccinated rates are ~70%+ and they have mask protocols etc, but all retail/hospitality venues are open.

Going to “restrictions” only (with countermeasures like isolation for close contacts/contact tracing remaining in place for outbreaks) once we get to a sufficiently high vaccination rate is the endgame and always has been for New Zealand: elimination was the goal to avoid overwhelming health system, and vaccinations replace lockdowns in doing that job of not overwhelming the health system once we get to a high enough rate.

it makes perfect sense when you see data like the charts below (and this is from USA where vaccination rate is a comparatively low 53% fully vaccinated).

12956

yes restrictions are the first step to manage the caseload in hospitals once you open up.
israel nearly fully vaxed and just recently implemented restrictions as a last attempt to control the latest outbreak ( even though vax is very high for there population) , if this fails they say they will need to go back into lock down.

So to me it looks like nz will just end up being the same , rolling levels of restrictions/ lockdowns nz health system is not going to handle a big outbreak be overwelmed within mths my guess once they open up fully.

[Waltzing]

"israel nearly fully vaxed"

delta hit them before they got above 60-70?

[LaserEyeKiwi]

yes restrictions are the first step to manage the caseload in hospitals once you open up.
israel nearly fully vaxed and just recently implemented restrictions as a last attempt to control the latest outbreak ( even though vax is very high for there population) , if this fails they say they will need to go back into lock down.

So to me it looks like nz will just end up being the same , rolling levels of restrictions/ lockdowns nz health system is not going to handle a big outbreak be overwelmed within mths my guess once they open up fully.

israel actually aren’t very highly vaccinated (that was only true of their older population early on). They are still below 70% currently, and they have constantly had a struggle to police large religious gatherings with zero restrictions in place (no distancing, no masks).

[bull....]

just heard ardern saying get your vax this week to aucklanders even if you have booked further out get it now. sounds like level 3 next week no matter what

[Ohdoyle]

Am I missing something here? Big rise late in the day on serious volume.

Dont get me wrong I believe the discount to nta makes this an attractive proposition and I continue to hold on that basis but I only see negative news at the moment so surprised to see such a strong breakout.

Any ideas ?

[Habits]

Am I missing something here? Big rise late in the day on serious volume.

Dont get me wrong I believe the discount to nta makes this an attractive proposition and I continue to hold on that basis but I only see negative news at the moment so surprised to see such a strong breakout.

Any ideas ?

The buyer would not be a Beagle, though at these prices it could be a Doberman Pincher

[Baa_Baa]

Am I missing something here? Big rise late in the day on serious volume.

Dont get me wrong I believe the discount to nta makes this an attractive proposition and I continue to hold on that basis but I only see negative news at the moment so surprised to see such a strong breakout.

Any ideas ?

You're right, with about 1.5m shares after market. In chart lingo KPG smashed the 50MA, then the 100 MA and pulled up 3 cent below the 200MA. Quite the move in one day.

There's more to the story. 10.2m shares traded, avg is 1.89m, so big volume relatively. Quickly looking at the trades (https://stocknessmonster.com/trades/kpg.nzx/), I might be wrong but it looks like a heck of a lot of smaller trades selling down and the larger trades buying up.

Whoever has that kind of money decided KPG is buy and the minnows are feeding them. Still well below NTA.

[Biscuit]

You're right, with about 1.5m shares after market. In chart lingo KPG smashed the 50MA, then the 100 MA and pulled up 3 cent below the 200MA. Quite the move in one day.

There's more to the story. 10.2m shares traded, avg is 1.89m, so big volume relatively. Quickly looking at the trades (https://stocknessmonster.com/trades/kpg.nzx/), I might be wrong but it looks like a heck of a lot of smaller trades selling down and the larger trades buying up.

Whoever has that kind of money decided KPG is buy and the minnows are feeding them. Still well below NTA.


Continuation of the same story for last few months, the volume has all been on the rises, little guys selling to the smart guys.

[kiora]

Likely to be investment funds inflow. Where else would all the money being printed go?. Property?
"This relationship is demonstrated anytime breaking news moves a stock quickly."
https://www.bloomberg.com/professional/blog/passive-funds-effect-stocks/

[Beagle]

Am I missing something here? Big rise late in the day on serious volume.

Dont get me wrong I believe the discount to nta makes this an attractive proposition and I continue to hold on that basis but I only see negative news at the moment so surprised to see such a strong breakout.

Any ideas ?

Index rebalancing at close. Things will be back to their boring old normal next week.

[Biscuit]

Index rebalancing at close. Things will be back to their boring old normal next week.

How would index rebalancing push the share price up?

[jimdog31]

How would index rebalancing push the share price up?

supply and demand

[Biscuit]

supply and demand

Sure, but KPG isn't a larger proportion of any index now than it was a month ago, so why would "index rebalancing" increase demand.

[Ohdoyle]

Sure, but KPG isn't a larger proportion of any index now than it was a month ago, so why would "index rebalancing" increase demand.

Yeah exactly, I assume they mean theres a big investment inflow into index funds? Not sure this is reflected in other shares..... but it was a good day, so maybe.

[Biscuit]

Yeah exactly, I assume they mean theres a big investment inflow into index funds? Not sure this is reflected in other shares..... but it was a good day, so maybe.

"Index rebalancing" may involve more than just adjusting a portfolio to index proportionality although I would have thought that would be by far the major thing - as passive funds are known to exacerbate trends rather than work against them. It may have something to do with index rebalancing but its not obvious to me how.

[LaserEyeKiwi]

Sure, but KPG isn't a larger proportion of any index now than it was a month ago, so why would "index rebalancing" increase demand.

if anything I thought it would have been the opposite effect - portfolio rebalancing reducing the size of KPG as it has dropped in value vs the broader market recently. hard to see a 4.5% upswing in a single days trade being caused by rebalancing.

actually think it has more to do with the clear signaling by multiple government ministers this week that lockdowns are not intended to be used in future as long as vaccination rate continues to progress as it has been. With over 73% of eligible with at least a single dose (and another 6% booked to receive one) we are in the final period of region-wide lockdowns as a needed tool.

[Beagle]

Every third Friday of every third month, (March, June, Sept and December) the NZX50 is "rebalanced" in the closing 15 minute match process.
The exact reasons why some shares are bought up and others sold down and the volumes and reasons involved are not know to this old mutt but the fact remains this rebalancing is a known event. If you look carefully at this image you will see that ostensibly almost all the volume was done at the close of trade12977

A clever investor looks to try and take advantage of these scheduled rebalancing events and tries to milk any price anomalies resulting from them.

[Habits]

Every third Friday of every third month, (March, June, Sept and December) the NZX50 is "rebalanced" in the closing 15 minute match process.
The exact reasons why some shares are bought up and others sold down and the volumes and reasons involved are not know to this old mutt but the fact remains this rebalancing is a known event. If you look carefully at this image you will see that ostensibly almost all the volume was done at the close of trade12977

A clever investor looks to try and take advantage of these scheduled rebalancing events and tries to milk any price anomalies resulting from them.

I would like to say the chart proves your point...but more the opposite, there is a fairly even incline 'throughout' the day

[Baa_Baa]

I would like to say the chart proves your point...but more the opposite, there is a fairly even incline 'throughout' the day

And the three large off-market trades 'after the close' (https://stocknessmonster.com/trades/atm.nzx/) were made at the closing price, they didn't alter the share price up or down.

[Beagle]

Ya think those in the know wouldn't front run the anticipated demand at close ? Why wouldn't they ! Negotiated deals after the market closes are a normal part of brokers matching up demand and supply. The volume at close speaks for itself.

[Waltzing]

there may be some selling coming in the AUS and NZ property markets.

Think everyone who follow global markets know the high yield market in China has been the birdie in the coal mine for a few years now.

Birdie coming home to "roast" (hot little tree branch on fire) now....

Chinese housing giant unable to pay debts and could wreck global economy - NZ Herald (https://www.nzherald.co.nz/business/chinese-housing-giant-unable-to-pay-debts-and-could-wreck-global-economy/5CFU72UJR7NZUSIMEYO6NT22UM/)

[LaserEyeKiwi]

Boom! KPG confirms it is moving ahead with Build-to-rent developments at Sylvia Park & LynnMall. First up is 295 apartments at Sylvia park, starting construction before the end of this year. Goal for 1,200 apartments total at Sylvia Park.

investor call at 10.30am.

https://www.nzx.com/announcements/379455

[Getty]

The KPG boys not afraid to make the big calls.

25 storey block proposal for Lynn Mall.

Lets hope erecting their phallus doesn't prove to be a fallacy, suffering deflation.

[LaserEyeKiwi]

“A big strategic shift for Kiwi property” quote form the investor presentation today.

Couldn’t agree more. With 1,800 BTR apartments already identified for a “medium term” target at Sylvia Park & LynnMall (600 in the near term), and much more flagged for future, KPGs BTR assets will make up a significant portion of the company’s assets before decade end. Combined with Drury the company is going to look significantly different, and larger, over the next 5-10 years.

[LaserEyeKiwi]

Management just said they are “reasonably advanced” in the long sale process of The Plaza & Northlands mall.

OIO approval is “not seen as an issue” (for the entity currently in the process of buying the malls).

No change in earnings guidance, implying minimal impact from lockdown so far in Auckland. Very comfortable with 5.3c guidance.

[LaserEyeKiwi]

Confirming the BTR Net yield of 4.5% is after all operating costs. (8% IRR)

The advantage of KPGs landholdings really shining through here.

[LaserEyeKiwi]

Call over. Analysts really loving the plan. Big day for KPG, the BTR plans are much bigger than many would have assumed - facing the prospect that BTR may dominate KPGs holdings in due course, and they have first mover advantage in the NZ market.

[Beagle]

Confirming the BTR Net yield of 4.5% is after all operating costs. (8% IRR)

The advantage of KPGs landholdings really shining through here.

Pretty modest yield especially with interest rates forecast to head much higher in coming years.
Good luck getting consent for a 25 level apartment complex in New Lynn, nothing around there is anywhere near that high so it would be completely out of context for the area.
Couple of different leading health experts both opining in a report in the N.Z. Herald this morning that Auckland could be stuck at level 3 for months.
I'd be very surprised to see Auckland malls opening anytime soon and therefore expect the effects of Covid in FY22 to be much more significant than in FY21.
Recent Auckland Council decision to increase development levies in Drury by 660% is a major handbrake on the Drury development.
Just adding my perspective.

Disc: No position either long or short.

[Biscuit]

Pretty modest yield especially with interest rates forecast to head much higher in coming years.
....


Their calculations for net yield are based on market rates but eventually they should get a significant premium based on the amenities provided. Their strategy is to get synergies for each property component type by combining them. Whether that works in Auckland only time will tell I guess.

[LaserEyeKiwi]

Pretty modest yield especially with interest rates forecast to head much higher in coming years.
Good luck getting consent for a 25 level apartment complex in New Lynn, nothing around there is anywhere near that high so it would be completely out of context for the area.
Couple of different leading health experts both opining in a report in the N.Z. Herald this morning that Auckland could be stuck at level 3 for months.
I'd be very surprised to see Auckland malls opening anytime soon and therefore expect the effects of Covid in FY22 to be much more significant than in FY21.
Recent Auckland Council decision to increase development levies in Drury by 660% is a major handbrake on the Drury development.
Just adding my perspective.

Disc: No position either long or short.

a) 4.5% net rental yields (that is after all costs) is amazing in Auckland right now for residential - and that excludes any capital appreciation and rental increases going forward after completion.
b) KPG already got resource consent at Sylvia park for the highest part of the new apartment complex (which was well above normal zoning allows) - so it shows Auckland council is keen to play ball with allowing these developments.
c) I don’t see how the current lockdowns impacts future BTR at all? This new BTR operation will be entirely rental income that starts rolling in once thiese first BTR developments are completed in 2024. Maybe I’m missing your meaning here? If you are referring to the impact of current lockdowns on KPG: Management reiterated today on the call that they are comfortable maintaining current earnings and dividend guidance given what they have seen up until now in lockdown, and the sale process of The Plaza & Northlands are in the advanced stages.
d) the Auckland development levies as they are are very low - even at the high end of the “up to 660%” increase (there is no confirmation at all that will be that high) it does not in any way pose a handbrake on the Drury development. It is merely bringing it inline with development costs in other main centers, and besides it is a very minor cost of the overall project that is continuing at pace. They also gave an update on Drury project on todays call in reply to an analyst question: They are in the final stages of planning with Auckland council, and are also awaiting the response from central government about fast tracking of the project consent (and by implication access to the government infrastructure slush fund which would be a nice little bonus).

=====

To roundup: today was a massive day in KPG history, with the likelihood that in a decades time KPG will be almost unrecognizable compared to today. The BTR is a far bigger effort than I had anticipated. The projects already announced for the near and medium term (1600+ apartments) by asset value will exceed the company’s current market cap. KPG is set to be one of the country’s largest landlords (behind housing NZ and the retirement village operators) and to get there it isn’t even going to need to buy any extra land (although it sounds like they might to expand the effort). Such a big pivot for the company today. It also provides a compelling plan b if a large exodus from office premises over the next decade if the work from home eventuates as the norm rather than a temporary pandemic situation (eg converting existing CBD office towers to BTR stock - or a mixed use model)

[SPC]

Well at least having a moderate feed here is more productive than barking at passing tail pipes..

[Waltzing]

With a recent report out for Home ownership stats in the next 10 years renting look sets to increase.

One part of the report has a pretty shocking number for pacific islanders and locals.