KPG - Kiwi Property Group Limited

[Waiuta]

Any comment on KPG's property portfolio revaluation of $175.9m or the 3.30cps final div? I'm probably a tad concerned that online trading may well impact their mall tenants in the not too distant future. So, is the revaluation fair?

Disclosure: Holding.

[kura]

Yes, online trading will eat into mall sales, but against that, there are a lot of strange people out there that consider it fun to spend hours at a shopping mall.

[Snow Leopard]

Do not quote me on this but I think that much of the property gain can be attributed to the current low interest rates and how that is factored into the valuation methodology.

Reversing the property revaluations out there is still a significant increase in 'operating profit', due to the lower interest rates & possibly the capital raising during the year?

I own some KPG and may read the report properly later and form a less uninformed view.

I recall reading recently that NZ is growing up and that the likes of H&M & another companies are invading (we already have them here in KL) so whilst they may drive a hard bargain with the likes of KPG and affect the (retail clients of KPG) competition I do not believe that physical retail therapy in NZ is quite dead yet.

Best Wishes
Paper Tiger

[percy]

Mall owners are now facing a few challenges.
The Farmers are now putting pressure on mall owners.
The Farmers own store is a "major" and as such pays a modest rental,as do the likes of Pak'n Save/Countdown, and The Warehouse.
So Farmers now own Stevens,Bed bath and beyond,Pascoes, Whitcoulls,and another Jeweller [whose name I forget].
I believe they have already managed to have Whitcoulls rent substantially reduced in one ChCh mall,which is owned by Kiwi Property.
I would expect they will be doing the same for all their chains' stores.
I do not see Michael Hill, for example, being happy paying a higher rental than Pascoes.

[Beagle]

Don't necessarily disagree with posters above but on the other side of the coin KPG are morphing their malls into a more comprehensive product offer. An excellent example of this is our closest mall in New Lynn Auckland where they have added a whole new extension wing of bars and restaurants along with the Reading Cinema complex and this addition has really transformed the whole mall into a diversified shopping and entertainment complex. Its frequently been extremely difficult to get a car park whereas before this transformation the place was looking a little sad and under patronised. On a side note, Lynnmall was N.Z.'s first shopping mall and I remember starting my career in 1980 just over the road at an accounting firm and I would wander over the road and do my shopping when it was nothing much more than an open strip of shops with a walkway down the middle.

I'm pretty sure malls will keep morphing as they have always done in the past on as required basis to stay relevant.

To answer the Op's question, the revaluation is the result of valuers using lower capex rates in their valuation model's consistent with interest rates and capitalisation rates at 60 year lows so yes the revaluation is fair in this ultra low interest rate environment. Amazing that you can borrow money fixed for 2 year's at only 3.99%. Never seen that before in my career.

[fungus pudding]

Mall owners are now facing a few challenges.
The Farmers are now putting pressure on mall owners.
The Farmers own store is a "major" and as such pays a modest rental,as do the likes of Pak'n Save/Countdown, and The Warehouse.
So Farmers now own Stevens,Bed bath and beyond,Pascoes, Whitcoulls,and another Jeweller [whose name I forget].
I believe they have already managed to have Whitcoulls rent substantially reduced in one ChCh mall,which is owned by Kiwi Property.
I would expect they will be doing the same for all their chains' stores.
I do not see Michael Hill, for example, being happy paying a higher rental than Pascoes.

Tenants have always fought for lower rents. Major tenants like Farmers do know that if valuation rentals are not paid then new development stops. So rent reviews are often contested, but while there may be a bit of a variation between two valuers, it usually won't be much of a problem because rent levels are general ratcheted. New development is forever forging new rent levels.

[kura]

[QUOTE=Roger;620311 Amazing that you can borrow money fixed for 2 year's at only 3.99%. Never seen that before in my career.[/QUOTE]

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

[janner]

Yes, online trading will eat into mall sales, but against that, there are a lot of strange people out there that consider it fun to spend hours at a shopping mall.

Spending nothing more than time...

[janner]

Spending nothing more than time...

Disc. Hold no retail..

[Bjauck]

Spending nothing more than time...
Last time I went to a big mall was to collect something I ordered online pay-and-collect. The item had to be shipped from another location, as the shop closest to me did not stock it. For my trouble my car received a ding in the car park. So next time it will definitiely be an online courier delivery and no visit to the mall.

[Soolaimon]

Re the current offer for 20m new units. I wonder if we will have to jump through as many hoops to subscribe to these and then at the price which is only a couple of cents discount at this stage. My recent experience with the GMT issue has me hesitating, but then I have not received the paper work yet.

[macduffy]

I would think that the same procedure as the GMT issue would apply - it seems to be necessary to comply with the restrictions on overseas ownership of land and property.

[fungus pudding]

Don't necessarily disagree with posters above but on the other side of the coin KPG are morphing their malls into a more comprehensive product offer. An excellent example of this is our closest mall in New Lynn Auckland where they have added a whole new extension wing of bars and restaurants along with the Reading Cinema complex and this addition has really transformed the whole mall into a diversified shopping and entertainment complex. Its frequently been extremely difficult to get a car park whereas before this transformation the place was looking a little sad and under patronised. On a side note, Lynnmall was N.Z.'s first shopping mall and I remember starting my career in 1980 just over the road at an accounting firm and I would wander over the road and do my shopping when it was nothing much more than an open strip of shops with a walkway down the middle.

I'm pretty sure malls will keep morphing as they have always done in the past on as required basis to stay relevant.

To answer the Op's question, the revaluation is the result of valuers using lower capex rates in their valuation model's consistent with interest rates and capitalisation rates at 60 year lows so yes the revaluation is fair in this ultra low interest rate environment. Amazing that you can borrow money fixed for 2 year's at only 3.99%. Never seen that before in my career.

Property values (thus cap rates) and interest rates are the opposite ends of a see-saw. That is why the best time to buy real estate, particularly housing, is when interest rates are high.

[Jaa]

Property values (thus cap rates) and interest rates are the opposite ends of a see-saw. That is why the best time to buy real estate, particularly housing, is when interest rates are high.

Good insight fungus. The question is will we consider today's interest rate high in 1, 2 or 5 years time?

[percy]

Tenants have always fought for lower rents. Major tenants like Farmers do know that if valuation rentals are not paid then new development stops. So rent reviews are often contested, but while there may be a bit of a variation between two valuers, it usually won't be much of a problem because rent levels are general ratcheted. New development is forever forging new rent levels.

.................................................. .................................................. ..........
Mistake

[percy]

Property values (thus cap rates) and interest rates are the opposite ends of a see-saw. That is why the best time to buy real estate, particularly housing, is when interest rates are high.

Excellent post.

[percy]

Property values (thus cap rates) and interest rates are the opposite ends of a see-saw. That is why the best time to buy real estate, particularly housing, is when interest rates are high.

.................................................. ................................ duplicated.

[Waiuta]

What's the group's opinion on this last paragraph of the offer .....

Further details about the Retail Offer are included in the Offer Document, which can be viewed here (https://www.kiwipropertyshareoffer.com/). While participation in the Retail Offer is optional, if you choose not to acquire additional shares via the Retail Offer your shareholding will be diluted.On behalf of the Board, I would like to thank you for your continued support.

[Beagle]

What's the group's opinion on this last paragraph of the offer .....

Further details about the Retail Offer are included in the Offer Document, which can be viewed here (https://www.kiwipropertyshareoffer.com/). While participation in the Retail Offer is optional, if you choose not to acquire additional shares via the Retail Offer your shareholding will be diluted.On behalf of the Board, I would like to thank you for your continued support.


I hold some on behalf of my Mum and won't be participating in this capital raise. To me it makes no sense subscribing for new shares at $1.58 when the last recorded NTA is $1.43 per share.
I can see why GMT and KPG are rushing to this new issuance when their shares are trading a such a premium to NTA, its a great deal for the company.
Yes, strictly speaking your percentage of the company will be very slightly diluted but the value of your shares will increase because other people are subscribing for new shares at a material premium to NTA. What they're saying is technically correct but nevertheless slightly disingenuous.
GMT issued shares at quite a substai8ntial premium to NTA because the industrial property sector is being perceived at present as very safe. This issue is not at quite such a premium but nevertheless is not a compelling offer by any means.

[Waiuta]

Thank you Beagle I appreciate your comments.

[Stumpynuts]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12286165


Looks good - I foresee mixed residential apartments and facilities like recreational centre/swimming facilities on Carbine Road side of the train station.

[Gerald]

Any opinions on this? Was almost trading on a 20% discount to NTA this morning.

[macduffy]

Any opinions on this? Was almost trading on a 20% discount to NTA this morning.

Yes, looks tempting - but so do a lot of others! The big unknown, of course, is what the downturn will do to retailers' capacity to keep their tenancies and to keep paying those rentals!

[ratkin]

Any opinions on this? Was almost trading on a 20% discount to NTA this morning.

If you think there will not be an epidemic in NZ they look great. Basically that the bet you are taking, because if there is one those malls will be ghost towns

[Beagle]

If you think there will not be an epidemic in NZ they look great. Basically that the bet you are taking, because if there is one those malls will be ghost towns

Agreed and then there's this, https://www.linkedin.com/pulse/worlds-first-global-911-martin-lindstrom/. (Thanks Winner69 for the very interesting information). Will we see some degree of permanent change in consumer behaviour towards malls ?

[kiwijay]

Have a BUY order placed on KPG now. Seems like a heavy discount to their NTA, and given their significant property portfolio, I'm pretty confident about their future.

[fungus pudding]

Have a BUY order placed on KPG now. Seems like a heavy discount to their NTA, and given their significant property portfolio, I'm pretty confident about their future.

Also the other LPTs like Argosy, Stride, Goodmans, Property for industry, Precinct - all worth picking through. Remember the intrinsic value of warehouses, office buildings etc is heavily underpinned by bricks and mortar - while shopping malls, big box retailers etc are heavily underpinned by their location and foot-traffic, and not so much by the structure. Their tenants ability to pay rent will be more affected by the economy - some rents may need to be renegotiated.

[Beagle]

Just got an email for Reading Cinema's All cinema's across Australia and New Zealand closed until further notice. Posted in here because they have a cinema in my local mall owned by KPG. I think this is an ominous sign for times ahead for KPG. I am certain many of their tenants will not be in a position to pay rent for the foreseeable future.

Event theatre's also closing today https://www.nzherald.co.nz/entertainment/news/article.cfm?c_id=1501119&objectid=12319045

[Beagle]

https://www.nzx.com/announcements/351283

Interesting announcement this morning. Cancellation of half year dividend, pay cuts, other cost savings measures and deferral of capex are all signs that the effect on this relatively modestly geared company is very serious.

[Balance]

https://www.nzx.com/announcements/351283

Interesting announcement this morning. Cancellation of half year dividend, pay cuts, other cost savings measures and deferral of capex are all signs that the effect on this relatively modestly geared company is very serious.

Bracing for a lot of tenants to have to stop or defer paying rents.

[Ggcc]

Bracing for a lot of tenants to have to stop or defer paying rents.
I read on msn an article that rent will just be demanded. No rent reprieve. I can’t find the article but I was surprised

https://www.newsroom.co.nz/business/2020/04/05/1115485/pay-up-mega-shopping-mall-landlord-warns-tenants

Found it

[Balance]

https://www.nzx.com/announcements/351878

Minus 8.5% reduction in valuation due to cover-a9 impact.

Just the start - there will be more as tenants hit the wall and already, many are banding together and refusing to pay rent.

https://www.rnz.co.nz/news/national/414505/two-thirds-of-shops-have-not-paid-their-rent

Two thirds of retailers have not paid their rent this month, and almost half of commercial rents overall are still due, says a property software firm.

[Ggcc]

https://www.nzx.com/announcements/351878

Minus 8.5% reduction in valuation due to cover-a9 impact.

Just the start - there will be more as tenants hit the wall and already, many are banding together and refusing to pay rent.

https://www.rnz.co.nz/news/national/414505/two-thirds-of-shops-have-not-paid-their-rent

Two thirds of retailers have not paid their rent this month, and almost half of commercial rents overall are still due, says a property software firm.
It does make me think how many business owners live week to week. I just don’t understand that they did not have enough to pay this months rent. Ok next month is another story, but this month??? I do feel that where possible landlords should provide rent relief, but you can’t expect it as a business owner. I paid my monthly rent in advance as a tenant, not with kiwi Property. We are trying to get some reprieve for next month, but if it can’t be done we will need to pay that as well. Luckily we don’t spend all off the businesses income and plan for the what if scenario.

[King1212]

Crying poor....the business owners enjoying their profit from business...buying houses, driving new cars... buy toys etc....did government or landlords say anything? As business owners...they need to prepare the rainy days.

I think all property stocks represent a great buy value...for long term. Where interest is super low.... assests will go up higher.

U will never buy KPG under NTA value ever in the last 10 years...

[fungus pudding]

It does make me think how many business owners live week to week. I just don’t understand that they did not have enough to pay this months rent.

Then you don't understand the true purpose of an overdraft which is not simply a loan - as many think.

[Ggcc]

Then you don't understand the true purpose of an overdraft which is not simply a loan - as many think.
My accountant has spoken to me about this and I am aware.

[tim23]

Crying poor....the business owners enjoying their profit from business...buying houses, driving new cars... buy toys etc....did government or landlords say anything? As business owners...they need to prepare the rainy days.

I think all property stocks represent a great buy value...for long term. Where interest is super low.... assests will go up higher.

U will never buy KPG under NTA value ever in the last 10 years...
Agree - approx. 20% discount on Fridays close, APL 30% discount

[Balance]

It does make me think how many business owners live week to week. I just don’t understand that they did not have enough to pay this months rent. Ok next month is another story, but this month??? I do feel that where possible landlords should provide rent relief, but you can’t expect it as a business owner. I paid my monthly rent in advance as a tenant, not with kiwi Property. We are trying to get some reprieve for next month, but if it can’t be done we will need to pay that as well. Luckily we don’t spend all off the businesses income and plan for the what if scenario.

I can tell you that the letter sent by KPT rubbed all the retailers up the wrong way.

The tenants thought that KPT would, under the circumstances, offer to work with them in a co-ordinated approach with the government.

Instead, KPT basically told them that it's not KPT's problem!

Well, it has become a big problem now for KPT because the tenants have banded together and they are all refusing to pay rent. A top notch lawyer is advising them and KPT & other shopping mall operators are going to have a big fight on their hands.

And we know where the public and government's sympathy will be with.

[fungus pudding]

My accountant has spoken to me about this and I am aware.

So you must realise business economics are far from grabbing a bunch of dollars out of the till and paying the bills every month. It simply doesn't work that way - particularly with seasonal businesses.

[Ggcc]

I can tell you that the letter sent by KPT rubbed all the retailers up the wrong way.

The tenants thought that KPT would, under the circumstances, offer to work with them in a co-ordinated approach with the government.

Instead, KPT basically told them that it's not KPT's problem!

Well, it has become a big problem now for KPT because the tenants have banded together and they are all refusing to pay rent.
Yes their letter was worded wrong. Heartless is some way. I will not invest in Kiwi Property from that letter to tenants alone.

My statement was that 2/3 of all tenants in nz not paying rent part. Rent reprieve is not a given.

If I was a shareholder I would not worried if the company negotiated a better outcome.

[King1212]

Maybe all landlords should get a top lawyer....sue these tenants which have houses...new cars ..n toys at home

[Balance]

Yes their letter was worded wrong. Heartless is some way. I will not invest in Kiwi Property from that letter to tenants alone.

My statement was that 2/3 of all tenants in nz not paying rent part. Rent reprieve is not a given.

If I was a shareholder I would not worried if the company negotiated a better outcome.

Pressure is now on KPT to do the right thing by its tenants - how the hell are its tenants supposed to pay rent when they cannot even access their premises!

Here's Westfield saying that they will be following the Australian protocol - so minimum 50% rent waiver with the rest to be deferred, on a tenant by tenant basis.

https://www.stuff.co.nz/business/120997876/australias-westfield-malls-owner-will-look-at-rent-reductions-for-hundreds-of-new-zealand-tenants

"Scentre Group will immediately adopt the code principles and look to implement similar arrangements in New Zealand for affected small business retailers."

Not often I pay a compliment to Australians but good on Westfield and shame on KPT.

[Ggcc]

So you must realise business economics are far from grabbing a bunch of dollars out of the till and paying the bills every month. It simply doesn't work that way - particularly with seasonal businesses.
That is correct, but are you putting all of retailers into the seasonal business category? I have had owned businesses over 20 years in the retail sector, some were extremely seasonal and others were not. I worked through the GFC and I never failed to pay rent, GST, PAYE and all other expenses. People need to plan for the what ifs......

[Balance]

That is correct, but are you putting all of retailers into the seasonal business category? I have had owned businesses over 20 years in the retail sector, some were extremely seasonal and others were not. I worked through the GFC and I never failed to pay rent, GST, PAYE and all other expenses. People need to plan for the what ifs......

Agreed, Ggcc but you have to admit zero revenue for 4 weeks, stretching on to maybe another 4 weeks, is a pretty hard 'what if' to plan for!

Anyway, I think KPT has got its work cut out to get back in synch with its seriously pissed off tenants.

[winner69]

That is correct, but are you putting all of retailers into the seasonal business category? I have had owned businesses over 20 years in the retail sector, some were extremely seasonal and others were not. I worked through the GFC and I never failed to pay rent, GST, PAYE and all other expenses. People need to plan for the what ifs......

Would hazard a guess this chart will look different this time next year

Some struggling to pay PAYE today and GST due in a few weeks ...ouch for many (and it isn’t really their own cash anyway)

[Balance]

Would hazard a guess this chart will look different this time next year

Some struggling to pay PAYE today and GST due in a few weeks ...ouch for many (and it isn’t really their own cash anyway)

Talked to one of the Sylvia Park tenants today.

He said his priority is simple - pay his staff, pay his suppliers (especially the SMEs who are struggling like him), re-negotiate other payments due (PAYE, Provisional tax etc) and KPT can get stuffed. See them in court - he along with the other tenants.

He made the point that KPT used to be really good to deal with until Colonial took over the management. When Colonial sold out, the local management seemed to have caught the Ozzie bug - arrogant, uncompromising and uncommunicative.

[percy]

Your friend and his friends need to take care.
Could find themselves locked out.

[Ggcc]

Agreed, Ggcc but you have to admit zero revenue for 4 weeks, stretching on to maybe another 4 weeks, is a pretty hard 'what if' to plan for!

Anyway, I think KPT has got its work cut out to get back in synch with its seriously pissed off tenants.
I do feel for people without rent for a month. I will have no revenue in my business for the level 3 lockdown coming up. It is serious and I understand. I hope to get some rent relief, but if I don't and I need to borrow/overdraft, I will. The government does not want businesses to close. I feel more for the employees, who are having a pay cut and trying to feed their family.

I employ 6 people part time and 2 full-time. I have offered them food from my own cupboards if they need it.

[Balance]

Your friend and his friends need to take care.
Could find themselves locked out.

KPT cannot enforce for 30 days and I cannot see KPT locking out 75% of its tenants.

Plus, Westfield has set a precedent.

[fungus pudding]

Talked to one of the Sylvia Park tenants today.

He said his priority is simple - pay his staff, pay his suppliers (especially the SMEs who are struggling like him), re-negotiate other payments due (PAYE, Provisional tax etc) and KPT can get stuffed. See them in court - he along with the other tenants.

He made the point that KPT used to be really good to deal with until Colonial took over the management. When Colonial sold out, the local management seemed to have caught the Ozzie bug - arrogant, uncompromising and uncommunicative.

https://www.stuff.co.nz/business/121122943/covid19-disruption-slashes-the-value-of-kiwi-propertys-portfolio-by-almost-300m

[macduffy]

Do not hold, but surprised that a property yield company has decided not to pay a dividend. I thought reliable yield was a key reason for owning listed property shares. Does not inspire confidence.

Take it as a signal that management aren't very confident, either. Potential lease terminations, lease/rent defaults, less customers through the malls etc.

[tim23]

Do not hold, but surprised that a property yield company has decided not to pay a dividend. I thought reliable yield was a key reason for owning listed property shares. Does not inspire confidence.

Yes - effectively by cancelling next dividend its like a rights issue they hopefully won't need to have - besides they had that last year, Disc- hold

[Grimy]

Take it as a signal that management aren't very confident, either. Potential lease terminations, lease/rent defaults, less customers through the malls etc.

Certainly no lack of customers in Lynn Mall today. The place was packed. Anyone who had concerns whether customers would ever want to shop in malls again didn't need to worry.

[tim23]

Certainly no lack of customers in Lynn Mall today. The place was packed. Anyone who had concerns whether customers would ever want to shop in malls again didn't need to worry.

We were at Coastlands recently - same trend - looked like BAU

[dibble]

BAU-i certainly hope so but its early days. Unemployment aside, plenty of fashion houses (a mall mainstay) downsizing/closing around the world (and a bit here of course). One feels there is worse/a lot worse to come but Herald article yesterday, chap confident malls will evolve, might see more dentists and the likes replace the shops. Whether that attracts the masses that feed the small shops, who knows. On a US trip last year it was heart-wrenching to see how many malls were dead (as in totally, boarded up, grass in parking lots etc). Hope we dont get any of the same.

[fungus pudding]

BAU-i certainly hope so but its early days. Unemployment aside, plenty of fashion houses (a mall mainstay) downsizing/closing around the world (and a bit here of course). One feels there is worse/a lot worse to come but Herald article yesterday, chap confident malls will evolve, might see more dentists and the likes replace the shops. Whether that attracts the masses that feed the small shops, who knows. On a US trip last year it was heart-wrenching to see how many malls were dead (as in totally, boarded up, grass in parking lots etc). Hope we dont get any of the same.

Town planning and zoning will make sure that malls here are relatively secure, i.e. not threatened by never ending competing developments. To aggregate sufficient land is expensive and painfully slow in NZ. Whereas in the states all vacant green-fields present an opportunity. Mall buildings are cheap structures and easy to throw up as long as land is cheap as it is in some of U.S states where shop development is uncontrolled. For the same reason they can provide almost unlimited parking so as to attract the punters from all around.

[percy]

Walked through Northlands Morgue this morning.
Had the smell of decay about it.

Down the road KMart, Briscoes etc were doing the business.

[Sideshow Bob]

https://www.nzx.com/announcements/354981

Kiwi Property business and dividend update
22/6/2020, 8:30 amCORPACT Kiwi Property is pleased to provide the following business and dividend update:
Pedestrian count
The number of visitors to Kiwi Property’s shopping centre portfolio has returned to pre-COVID-19 levels. Since New Zealand’s move to Alert Level 2 and the resumption of normal trading on 14 May, the average pedestrian count for the Company’s portfolio is up 1% on the same period last year. Some centres have recovered particularly strongly, including Sylvia Park in Auckland and The Plaza in Palmerston North.
Rent relief
Kiwi Property has taken a number of steps to mitigate the impact of COVID-19 across its business and to support its tenants. These measures include a comprehensive cost control programme and rent relief measures for affected retailers, and SMEs. Negotiations with Kiwi Property’s tenants are ongoing, however abatements are expected to be in-line with the guidance provided at the Company’s full year results (FFO [Note 1] impact of approximately $20 million or $14 million after tax, partially offset by an approximately $4.5 million reduction in tax resulting from the reinstatement of depreciation on commercial buildings).
Dividend
As previously reported, the Kiwi Property Board made the difficult decision not to proceed with the final dividend for the year ended 31 March 2020, due to the inherent uncertainty caused by COVID-19. In light of New Zealand’s return to Alert Level 1 and the increased clarity around the country’s trading environment, the Company intends to pay an interim dividend for the year ending 31 March 2021 [NOTE 2]. The dividend will comprise 90 – 100% of Kiwi Property’s underlying cash flows (AFFO [NOTE 1]) for the six-month period to 30 September 2020, in accordance with its new dividend policy.
Further dividend and earnings updates will be provided to the market once trading conditions and rental collections have normalised.

[winner69]

No paycheck for KPG shareholders until Christmas ...if things go OK

[percy]

Observations from visiting Northlands Mall last week.[from memory so may not be exact]
Three large empty stores.
Four small empty stores.
Standard of tenants weaker.So many stores did not appear to have a viable business.A lot did not have the stock required to do a good turnover.
Shoe stores are not a good sector yet there were about four sport shoe retailers and possibly three or four standard shoe retailers.
Hairdressers.Two or three.Massage two,or three..Hair removal one or two.Nails etc two or three. ie over 10 in one sector.?
Foodcourt.McDonalds as usual were the only ones busy.

[Paradox]

SP was hovering around 1.02 and 1.03 for two days in a row and suddenly finished at 1.08 on Friday. You got to wonder....

[Beagle]

NZX50 Index rebalancing on Friday at close of business.

[Paradox]

Observations from visiting Northlands Mall last week.[from memory so may not be exact]
Three large empty stores.
Four small empty stores.
Standard of tenants weaker.So many stores did not appear to have a viable business.A lot did not have the stock required to do a good turnover.
Shoe stores are not a good sector yet there were about four sport shoe retailers and possibly three or four standard shoe retailers.
Hairdressers.Two or three.Massage two,or three..Hair removal one or two.Nails etc two or three. ie over 10 in one sector.?
Foodcourt.McDonalds as usual were the only ones busy.


NZX50 Index rebalancing on Friday at close of business.
Ah that explains it, thanks

[LaserEyeKiwi]

Observations from visiting Northlands Mall last week.[from memory so may not be exact]
Three large empty stores.
Four small empty stores.
Standard of tenants weaker.So many stores did not appear to have a viable business.A lot did not have the stock required to do a good turnover.
Shoe stores are not a good sector yet there were about four sport shoe retailers and possibly three or four standard shoe retailers.
Hairdressers.Two or three.Massage two,or three..Hair removal one or two.Nails etc two or three. ie over 10 in one sector.?
Foodcourt.McDonalds as usual were the only ones busy.

I don’t know when you went, but last weekend Northlands was like the week before Xmas - absolutely packed with shoppers.

[LaserEyeKiwi]

I was surprised there wasn’t more of a lift in KPG today given that very good news PR release.

[Grimy]

I see KPG has said they will resume dividends later in the year as mall visitor numbers are above pre-lockdown numbers (only 1%) already. Whoever said who would want to go back to shopping in malls anytime soon didn't count on human nature and not changing old habits. I'm not a mall shopper generally, but a lot of people seem to want to spend all weekend in them.......

[Paradox]

....given the weather and lack of social contact for a couple of months, not surprising visitor numbers are up. but, is the spending also up? how many tenants are trading at pre-lockdown levels?

Disc: hold none

[Bjauck]

I see KPG has said they will resume dividends later in the year as mall visitor numbers are above pre-lockdown numbers (only 1%) already. Whoever said who would want to go back to shopping in malls anytime soon didn't count on human nature and not changing old habits. I'm not a mall shopper generally, but a lot of people seem to want to spend all weekend in them....... Humans are social creatures. We like to browse, see other people, meet up with friends to eat, hang out, play games and chatter. Skype, Zoom and online shopping cannot replace all of that *. Even teenagers like to meet up at the malls!

*yet. Who knows where technology will lead. How immersive will Zoom and the online shopping experience become in the years to come.

[LaserEyeKiwi]

After yesterdays virtual AGM, I am quite confident that KPG will be paying a $90-$100 million Dividend following the current financial year, which would represent 90-100% of AFFO (which is there stated dividend payout amount).

That $90-$100 million dividend would be a 5.75%-6.5% dividend yield based on todays share price.

I also think we are likely to see a revaluation higher of the asset base, given that the last revaluation lower was at the worse possible time (March, right before entering lockdown). Current visitor numbers to KPG shopping centres are up 1% on a year ago, with some properties like Sylvia up “double digit” percentages. Wouldn’t surprise me to see the asset backing per share increase back towards $1.50 per share over the next 12 months.

[King1212]

I have been observing the mall in the last couple weeks. ..even last two weeks...the weather was so bad..but mall was packed.

I agree human is a social creature....like meeting up....

[Waltzing]

The Auckland malls might be going well but hamilton-Kiri what ever , are not packed. Still centre place not packed.

[LaserEyeKiwi]

The warehouse had a trading update today reporting that year on year sales are up dramatically since lockdown ended across there various store brands - good news for entire retail industry, including KPG.

[Mya]

They also said that the surge in sales was due to pent up demand and they expected a significant decay later this year.

[fungus pudding]

They also said that the surge in sales was due to pent up demand and they expected a significant decay later this year.

What foresight !

[King1212]

Kpg has solid assests.......total 3b assests......gearing 32 persen... latest update will pay dividend at 90 to 100 payout .....at current price. ....I think it is attractive

[macduffy]

Kpg has solid assests.......total 3b assests......gearing 32 persen... latest update will pay dividend at 90 to 100 payout .....at current price. ....I think it is attractive

Yes, provided those assets continue to attract tenants who can continue to pay current rents.

[King1212]

Kiwi Property maintained its solid balance sheet in FY20, including the
extension of $361 million of bank debt facilities in March 2020. This builds
on the successful equity raise undertaken by the Company in November 2019,
which delivered net proceeds of $193.7 million. Kiwi Property has no bank
debt maturing until FY23, $291 million in undrawn credit facilities and
gearing of 32%, as at 31 March 2020.

[LaserEyeKiwi]

Excellent news for retail sector (Including KPG, New Zealand’s largest listed retail property owner) in Latest Stats NZ update:

BIG year on year retail spending increase for June:

”Furniture, hardware, appliances, and recreational goods (durables) experienced the largest rise, up $310 million (24 percent) compared with June 2019.”

https://www.stats.govt.nz/news/retail-card-spending-resurgence-in-june

Overall spending was up 8%, $5.7 Billion in June 2020 vs $5.28 Billion in June 2019.

[King1212]

KPG is a keeper..they passed their crisis time...now the power companies are in doubt whether they could maintain their dividend or reduce..

[King1212]

Big crossing came through..maybe from overpriced power companies...ehh??

[tim23]

Big crossing came through..maybe from overpriced power companies...ehh??

I think when/if dividend confirmed to be paid in December price will firm. I do hold.

[King1212]

Recent announcement.....KPG will resume paying the dividend

[tim23]

Recent announcement.....KPG will resume paying the dividend


Yes I read that too but it seemed to be a qualified intention so I read it as maybe 75% certain only.

[King1212]

The lockdown is over....unless there is another lockdown like Melbourne.

Plus....KPG raised fund in oct 2019....gearing at 32persen.

Only malls portfolio affected by lockdown. Vero, government accommodation, other government offices are all sweet as.

[tim23]

The lockdown is over....unless there is another lockdown like Melbourne.

Plus....KPG raised fund in oct 2019....gearing at 32persen.

Only malls portfolio affected by lockdown. Vero, government accommodation, other government offices are all sweet as.

Quite right - and by cancelling recent dividend they probably averted another capital raising.

[trader_jackson]

The lockdown is over....unless there is another lockdown like Melbourne.

Plus....KPG raised fund in oct 2019....gearing at 32persen.

Only malls portfolio affected by lockdown. Vero, government accommodation, other government offices are all sweet as.

Just my two cents... I am not sure Vero is "sweet as" at all, nor is any other CBD office tower where a significant number of people are still working from home and a significant if not all firms are reconsidering how much space they need
And by reconsidering, I mean downsizing.

[LaserEyeKiwi]

Yes I read that too but it seemed to be a qualified intention so I read it as maybe 75% certain only.

they will be paying 90-100% of Free Cashflow

[Balance]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12350116

Paywall article

Industrial properties - that’s where the smart money is going according to Goodman & they are putting their money where their view is.

CBD & smaller shopping mall properties could be in for a irreversible decline as work environment changes.

Observation - was in Auckland’s CBD for a meeting last week at a 23 storey refurbished building which is 75% empty & begging for tenants. The company I was visiting is moving out of their temporary floor in Oct when their new premises in Commercial Bay are ready.

[macduffy]

Industrial properties - that’s where the smart money is going according to Goodman & they are putting their money where their view is.

Probably so. But I'd take Goodman's comment in the knowledge that industrial property is their business and where they have always put their money, not retail or office properties.

Disc; Holding GPT but not KPT.

[Balance]

Probably so. But I'd take Goodman's comment in the knowledge that industrial property is their business and where they have always put their money, not retail or office properties.

Disc; Holding GPT but not KPT.

At their family level, they had plenty invested in CBD properties.

[LaserEyeKiwi]

I wouldn’t be too concerned in the long run. Yes I think commercial portfolios will be soft for lower rated properties as work-from-home trend continues, but there is plenty of conversion potential for tired properties. KPG has said they intend to enter build-to-rent market for residential market, and in a worse case scenario they can convert their older commercial properties to residential (lots of this already happening in Wellington from other developers).

[LaserEyeKiwi]

Off 3% today. Not seeing any news.

[Cyclical]

I wouldn’t be too concerned in the long run. Yes I think commercial portfolios will be soft for lower rated properties as work-from-home trend continues, but there is plenty of conversion potential for tired properties. KPG has said they intend to enter build-to-rent market for residential market, and in a worse case scenario they can convert their older commercial properties to residential (lots of this already happening in Wellington from other developers).

It seems the home office movement is bringing about the office to home conversion movement...now there's irony. Will be interesting to see at what level this happens and its impact on the housing crisis.

[fungus pudding]

It seems the home office movement is bringing about the office to home conversion movement...now there's irony. Will be interesting to see at what level this happens and its impact on the housing crisis.

The interesting question is - how long will it last? Once the novelty wears off I think most people will be screaming to get out of the house. Interaction with people outside the family is important for sanity, as many will discover.
I'd give the work from home movement 6 months at most before the majority return to their normal work premises. What's the point in having a job if not to escape the spouse! :D:D

[Cricketfan]

I'd give the work from home movement 6 months at most before the majority return to their normal work premises. What's the point in having a job if not to escape the spouse! :D:D

You might be right, but I hope not. At least in my workplace, we are 2-3 days working from home at the moment with the intention of rearranging our office space to make this permanent. Suits me to a tee.

[Scrunch]

The interesting question is - how long will it last? Once the novelty wears off I think most people will be screaming to get out of the house. Interaction with people outside the family is important for sanity, as many will discover.
I'd give the work from home movement 6 months at most before the majority return to their normal work premises. What's the point in having a job if not to escape the spouse! :D:D

Another interesting question is, if people start spending more time at home when working, will they look to get out of their houses more or less when not working. I'd be inclined to think more as they "escape the spouse" which might assist out of house locations like malls.

[tim23]

Went to Queensgate mall on Saturday on way to the city, crazy busy - has anyone been to the mall in Palmerston North lately?

[Beagle]

Went to Queensgate mall on Saturday on way to the city, crazy busy - has anyone been to the mall in Palmerston North lately?

No but Mrs B and I just came back from an early dinner at Lynmall food court and she said she's never seen it so quiet. When you can get a park almost directly outside the main entrance you know its quiet. I think mall's like this one that experienced a significant boom with the addition of a movie theatre complex are feeling the effects of lower movie patronage with the abysmal lack of new movie content.

[kiwico]

Went to Queensgate mall on Saturday on way to the city, crazy busy - has anyone been to the mall in Palmerston North lately?

We were there a couple of weeks ago and it was very full. It was a damp Saturday to visit Palmy and the centre was grey and quiet but the mall was the complete opposite.

Palmy has some uniquely named eateries too....

11810

[Cyclical]

Palmy has some uniquely named eateries too....

11810

Haha, we've got one of those in New Plymouth too. They do a great dosa. Of course at least half of NZ thinks New Plymouth and Palmerston North are one and the same...perhaps they should get married.

Now back on the working from home thing, like Cricketfan, I'm hearing a lot of peeps saying they're doing 2-3 days a week from home, which for many of us is a nice balance between work social requirements and spousal distancing :-) If done right and over the long term, this could equate to significantly less office space requirements for some companies. I suspect the biggest danger to this happening long term though will be piss taking and subsequent reduction in productivity.

[LaserEyeKiwi]

KPG - Kiwi Property reports June sales growth
30/7/2020, 9:48 am GENERAL
Sales update:

Kiwi Property today released its sales data for June – the first full month of trading since New Zealand exited lockdown.

Adjusted sales at the Company’s shopping centre portfolio were up 7.5% on the same period last year, while total June sales increased 0.5% [NOTE 1]. Sylvia Park in Auckland, The Base in Hamilton and The Plaza in Palmerston performed particularly well, recording strong sales during the month.

Linda Trainer, Kiwi Property GM Asset Management, said the solid trading performance was encouraging.

“Following a surge in post-lockdown retail activity, much of the momentum has continued through June. Our top performing shopping centres going into COVID-19 have typically rebounded the fastest, as have large format retailers, driven by increased leisure and sporting goods purchases. It’s difficult to predict how the next few months will shape up and a lot will depend on the state of the economy, but for now, sales remain strong.”

Credit rating:

Kiwi Property also advised that S&P Global Ratings [NOTE 2] has reaffirmed the Company's investment grade BBB (stable) issuer credit rating. Kiwi Property’s fixed rate senior secured bonds have a credit rating of BBB+.

End

Note
1. Adjusted sales exclude cinemas, travel and foreign exchange, which were unable to trade at full capacity during to COVID-19.

[dibble]

Took a walk along Newmarket Broadway today, on one side, in a stretch of maybe 150m, I counted 12 shops vacated/for-lease signs. And behind me (near the large now empty ANZ) a ForLease sign in Vodafone's window, altho they were still doing business. And that is with the economy "showing unexpected resilience", which one presumes is a temporary thing.
Minor reality check on retail property.

[allfromacell]

Took a walk along Newmarket Broadway today, on one side, in a stretch of maybe 150m, I counted 12 shops vacated/for-lease signs. And behind me (near the large now empty ANZ) a ForLease sign in Vodafone's window, altho they were still doing business. And that is with the economy "showing unexpected resilience", which one presumes is a temporary thing.
Minor reality check on retail property.

The new mall appears to be pretty busy though, I guess mostly at Broadways expense.

[fungus pudding]

Took a walk along Newmarket Broadway today, on one side, in a stretch of maybe 150m, I counted 12 shops vacated/for-lease signs. And behind me (near the large now empty ANZ) a ForLease sign in Vodafone's window, altho they were still doing business. And that is with the economy "showing unexpected resilience", which one presumes is a temporary thing.
Minor reality check on retail property.

What sizes shops? Large operations, or small owner operated ventures? I'm not familiar with the area. I'm in Dunedin and I'm sure some of the smaller, older style shops that haven't already failed will in the near future. Fair to say several would have been hanging on by the skin of their teeth anyway - but couldn't survive the final push.

[macduffy]

Is Broadway still Auckland's premier strip-shopping street? If so, it doesn't augur well for retail if it's struggling to let its shops.

[dibble]

What sizes shops? Large operations, or small owner operated ventures? I'm not familiar with the area. I'm in Dunedin and I'm sure some of the smaller, older style shops that haven't already failed will in the near future. Fair to say several would have been hanging on by the skin of their teeth anyway - but couldn't survive the final push.

Mostly pretty small (maybe of flightcenter size) and usually 2-3 vacant is not unusual just by the turnover nature of small outlets but also a sprinkling of slightly larger ones like the ANZ. But (to macduffy) it is a pretty s****y strip full of boutiques so such a high number is rather a surprise. If it fills up with $2 shops that might be a dire moment. A dead main street cant be good for the new mall.

[Getty]

Is that big new mall on Broadway still have a tremble you feel thru yr feet?
I was in it last yr, and when I asked one of the staff why so, I was told it was caused by people playing 10 pin bowling.
Really, doesn't say much for its building standards.
I hope its not our next CHCH TV building to collapse?

[arekaywhy]

Is that big new mall on Broadway still have a tremble you feel thru yr feet?
I was in it last yr, and when I asked one of the staff why so, I was told it was caused by people playing 10 pin bowling.
Really, doesn't say much for its building standards.
I hope its not our next CHCH TV building to collapse?

It will be a poorly designed floor, with poor consideration of vibration. Something that light weight, cheap construction methods suffer from. I had experienced it myself when visiting the mall. It is quite disconcerting.

[teabag]

Took a walk along Newmarket Broadway today, on one side, in a stretch of maybe 150m, I counted 12 shops vacated/for-lease signs. And behind me (near the large now empty ANZ) a ForLease sign in Vodafone's window, altho they were still doing business. And that is with the economy "showing unexpected resilience", which one presumes is a temporary thing.
Minor reality check on retail property.

Walked along there yesterday, the majority of empty shops that still had identification on them have moved into Westfield, 100m up the street. There has always been a significant number of "niche" retail there, which I have always wondered how they managed to survive - I guess Covid has been the final straw for them.

[Gregnz]

Herald Premium, but this looks like good news “ A giant of NZX property companies has won state consent to buy Auckland property in what could be a signal that it is about to advance its build-to-rent plans”

[King1212]

next..KPG....will be patiently waiting for good news...just like my HGH

[clown]

I cashed in my HGH on the last run unfortunately but still have some KPG left :t_up:

[tim23]

I cashed in my HGH on the last run unfortunately but still have some KPG left :t_up:

Me too! Still hold both, hanging in.

[King1212]

https://i.stuff.co.nz/business/industries/122763074/sylvia-park-bets-on-the-strength-of-the-middle-class-as-it-expands-with-the-galleria

[King1212]

Nothing to concern about KPG's assets Master Beagle!!

In my opinion, all retailers will be consolidating their businesses. They will concentrate on big malls or popular shopping centre. They will shut the shops on small centres and off streets one.

Ask anyone,,,who does not like to go to KPG malls? Sylvia park, Te rapa...?? People like to socialize.

Their debts gearing is not too bad around 30 is %...then some properties are government leased.

SP is easily up 20c in the next update.

[Beagle]

Probably not what you want to read but here goes mate...

I don't like the fact that despite reasonable gearing and a reasonable result for FY20 they canned the final dividend based on the fact that a big write-down happened in the value of their assets.

To me this beggars belief for an income stock as income is income and an unrealized write-down in assets does not affect income nor should it cause a dividend to be completly stopped.

Did they pay an extra dividend in the last year in which a big capital gain was made on their properties ? No of course not, that would be paying out unrealized profit but they are happy to take dividends away from investors when there's a write down even though its an unrealized write-down, go figure ? There's something morally wrong going on here.

So what are they going to do about it for the interim dividend ? Will they make this loss of income up for investors if there is a valuation recovery ? No of course not again. They have said they intend to pay out 90-100% of profit for the interim FY21 result. All good so far you might argue but wait there is more...

From their announcement on 22/06/20
"The interim dividend for the financial year ending 31 March 2021 would be payable in December 2020 and is subject to the absence of material adverse effects (such as disruptions to business activity) or other unforeseen circumstances, including further COVID-19 related lockdowns or significant decreases in asset values or income".

There's something fundamentally wrong with directors that don't understand that investors in an income stock expect that income to be paid out at a certain percentage of income, say 85-90% regardless of unrealized capital movements one way or the other in the capital value of the properties but at the same time they're happy to deprive investors of income they're happy to contemporaneously go on to expend vast resources substantially expanding their mall size in the middle of a serious economic crisis. Hmmm

Investors need to decide for themselves if the directors are really looking after the best interests of investors or themselves ? I am not impressed.

I note ARG seem to have a completely different approach to maintaining dividends and are on a much better yield and are better diversified by property type.

[King1212]

Let see eh...will prove u wrong again...just like HGH!! Then me with be title Master soon...haha..not many companies in NzX undervalued now



Following the valuation result, Kiwi Property's investment portfolio


capitalisation rate has softened by 12 basis points from 5.99% to 6.11% and


decreased net tangible asset backing per share by 18 cents from $1.42 to


$1.24 per share. Gearing has increased to 32%, which remains within the


target range.

[Beagle]

Fair comment mate. Maybe the present ~ 20 cent discount to NTA accounts for my concerns fully. I may need to ponder this one a bit more...

[King1212]

Kpg is nothing to lose one Master Beagle. Low interest... assests price will be up no matter what. It is just a matter of time for KPG. October update is coming soon

[Beagle]

I'm struggling to reconcile this cautious outlook here https://www.nzx.com/announcements/351283 in April, cancellation of the dividend and deferral of non essential capex and other measures with their current almost gung-ho build it and they will come approach http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/359590/330530.pdf

Sure it would be fair to say they had already committed to the Galleria expansion before Covid hit but its not a good look and on the face of it their expansion and the previous statement of caution is incongruent.

Okay to spend $277 million but can't afford to pay the final dividend ?
Stop the dividend when there's unrealized write down in assets but no extra in previous years when there was massive increases in unrealized gains ?
Major expansion at Sylvia park, so they think the risk from Covid has now passed ?
Future dividend(s) contingent on no major further write-downs or Covid effects... For me that's a deal breaker because it tells me they have no contrition for canceling the last dividend or sympathy for investors need for income.

To me the directors seem to have forgotten why people invest in REIT's...for reliable dividends. Very poor execution of their primary goal to be a reliable investment for shareholders in my opinion. No wonder its at a discount to NTA and very probably deserves to be. If there's another outbreak of Covid in N.Z. or should that read "when there's another outbreak of Covid" malls are the first place people stop going too.

I see plenty of risk here and well below average governance standards and execution of their purpose for existence.

Its not for me but good luck with it mate and believe me when I tell you, we're ALL hoping N.Z. stays being a safe place to go to the shopping malls.

[King1212]

Thier plan on sylvia park is to expand it. I can see what they are trying to do with it...like singapore mall and apartment in one location. Recent article that I posted...said they will do that.

[Beagle]

Thier plan on sylvia park is to expand it. I can see what they are trying to do with it...like singapore mall and apartment in one location. Recent article that I posted...said they will do that.

"Build it and they will come" What could possibly go wrong ;)

[King1212]

Kpg will be okay...sp will be back to $1.30 ish I said it first here...

https://www.newshub.co.nz/home/new-zealand/2020/09/covid-19-auckland-job-losses-not-as-bad-as-predicted-figures.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+29+ September+2020

[fungus pudding]

Kpg will be okay...sp will be back to $1.30 ish I said it first here...

https://www.newshub.co.nz/home/new-zealand/2020/09/covid-19-auckland-job-losses-not-as-bad-as-predicted-figures.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+29+ September+2020

My crystal ball tells me that all the talk about people making changes to work from home is no more than a temporary thing, and any losses will be compensated for by busier courts, lawyers, valuers and all the other professions who benefit from divorces.

[King1212]

Funny that... couple of my work mate's relationships went sour during the lock down...one..end up divorced

[fungus pudding]

Funny that... couple of my work mate's relationships went sour during the lock down...one..end up divorced

One divorce? Small workforce - huh?

[King1212]

Well...at the moment.... couple went sour....others went quiet....no personal things at work....

[King1212]

It is a true story..did not make it up. After covid.... couple of work mate's relationships went sour.

Would love to hear more stories if happened around.

Is working at home n covid make relationships sour?

[percy]

https://www.youtube.com/watch?v=A5s433aTy98

[King1212]

Hahha....that was funny!

[Beagle]

https://www.youtube.com/watch?v=A5s433aTy98

:lol: :lol:

[King1212]

Working from home...make people fat too!

https://www.nbr.co.nz/node/227756

[King1212]

U missed the train master Beagle!

[Beagle]

I can't be everywhere mate. I am BIG in OCA and see that as having a better Covid recovery delta and risk profile
KPG should do okay though.

[Scrunch]

U missed the train master Beagle!

I thought this train was just starting its run. Are you saying there was only 5-10c, depending on your entry price?

[tim23]

ANZ business confidence survey improvement today may have helped?

[King1212]

What I meant....I asked Beagle to jump on board weeks ago...when SP still $1....bit he had concerns but I assured him...but he decided not to jump on board

[King1212]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12369593

[King1212]

https://www.scoop.co.nz/stories/BU2010/S00031/retail-sales-and-confidence-rebound-after-second-lockdown-lifts.htm?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Saturday+3+ October+2020

[King1212]

https://www.interest.co.nz/business/107330/almost-half-retailers-report-sales-are-now-better-time-last-year?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Monday+5+Oc tober+2020

[percy]

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/jhI6yQwwgtxJ66b892L49Drg/98zArTssjQQuaJ38892b763xCA
The largest groups of underemployed are women and youth.
They have been retail biggest spenders.
With more time on their hands and with less money to spend, I would expect they will be big online bargain hunters.

[winner69]

https://www.interest.co.nz/business/107330/almost-half-retailers-report-sales-are-now-better-time-last-year?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Monday+5+Oc tober+2020

This bit interesting - but not so good for shopping centres?

Sixty per cent of retailers with an online presence reported that their sales were up, compared to just 35% of retailers with in-store trading only.

[winner69]

https://www.scoop.co.nz/stories/BU2010/S00031/retail-sales-and-confidence-rebound-after-second-lockdown-lifts.htm?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Saturday+3+ October+2020

Hey kingie - never seen you try so hard promoting a stock ;);):):scared::t_up::t_down::confused:

[King1212]

Nah...one of the stock that I believe will go up as it recovers...all others are back to full price

[bull....]

Nah...one of the stock that I believe will go up as it recovers...all others are back to full price

yes kpg has underperformed the others so might play catch up and with the dividend due december might be demand for that. i brought some for the div and the breakout which occurred last week so im with ya king ..... charge

[King1212]

Wow...bull with me ...lol....

[King1212]

Bull..we will see Kpg flying high again today...simon property USA is flying to the roof. Confident gained as people see Trump okay although he got the virus.

Life will get back to normal!

[bull....]

Bull..we will see Kpg flying high again today...simon property USA is flying to the roof. Confident gained as people see Trump okay although he got the virus.

Life will get back to normal!

life is pretty much normal in NZ already , retail is doing better than last year and people are not going to abandon there work places tomorrow. kpg only major concern i reckon is the cinema tenants and big positive sylvia park extension opening this mth will be a big boost.
the yield over 7% gross is very juicy

[fungus pudding]

life is pretty much normal in NZ already , retail is doing better than last year and people are not going to abandon there work places tomorrow. kpg only major concern i reckon is the cinema tenants and big positive sylvia park extension opening this mth will be a big boost.
the yield over 7% gross is very juicy

Is KPG a pie though?

[bull....]

Is KPG a pie though?

i believe its a listed pie

[bull....]

starting to move , theres a gap to fill just under 1.30

[fungus pudding]

i believe its a listed pie

Thanks. It's a pity they don't state that anywhere on their website. None of them seem to. From memory one of the LPTs is not a PIE, but I can't remember which one - or why. For some long forgotten reason I've avoided KPG.

[bull....]

Thanks. It's a pity they don't state that anywhere on their website. None of them seem to. From memory one of the LPTs is not a PIE, but I can't remember which one - or why. For some long forgotten reason I've avoided KPG.

im in on my assumtion of its been mis - priced ( to heavily discounted for covid ) ill pick up the div in december why it re -rates hopefully

[bull....]

bollies spreading a good sign when they spread means the breakout is underway

[King1212]

Will break $1.20 soon

[bull....]

Will break $1.20 soon

should do

i took this from there update as very good sign

Following a surge in post-lockdown retail activity sales remain strong.”

https://www.nzx.com/announcements/357113

so if turns into a full yr of reality they paid 7c of divs last yr at current prices thats over 7% grossed and with interest rates heading to zero , no brainer in my opinion.
of course we dont know the future but looks good at the moment thx king for bringing it to our attention hope ya got sh.. loads

[Enrix]

Jarden retain Outperform target price 1.28 - they see confirmation of 1H21 dividend resumption as a key catalyst.

Discl. Holding

[bull....]

Jarden retain Outperform target price 1.28 - they see confirmation of 1H21 dividend resumption as a key catalyst.

Discl. Holding

not surprised by there outperform as its undervalued at the moment

[Waltzing]

if you missed ARG , this is the next one to rerate.


DISC: holding as of today in holding company.
ARG : in multiple co Ltd and Trusts.

[bull....]

Retail card spending rebounded at a record rate in the September quarter as Covid-19 alert level restrictions eased, Stats NZ data shows.
Spending jumped 24.6 per cent over the three months to September
“Provided New Zealand does not shift up alert levels, the better-than-expected showing of the labour market, robust signs in the housing market and record low mortgage interest rates could act to prop up the retail sector,” Smith said

https://www.stuff.co.nz/business/123070264/card-spending-up-as-covid19-alert-levels-fall-stats-nz-figures-show

[Waltzing]

Its a BUY and we are pleased to be back in after 2 years.Was a big staple stock in the day.

[King1212]

been screaming buy in the last couple months but being ignored!!!

[bull....]

Sylvia Park opens new $277 million shopping floor with new stores

https://www.stuff.co.nz/business/123087101/sylvia-park-


opens-new-277-million-shopping-floor-with-new-stores (https://www.stuff.co.nz/business/123087101/sylvia-park-opens-new-277-million-shopping-floor-with-new-stores)

biggest mall in the country now

[Waltzing]

yes volumes building nicely.

not being ignored now.

DISC: bought 2 days ago.

[Beagle]

The dog has bought a few too....would have been better at $1.05 but I have been a busy dog elsewhere and just had more term deposit money come up for maturity...no point reinvesting with the bank at 1% is there !

[bull....]

The dog has bought a few too....would have been better at $1.05 but I have been a busy dog elsewhere and just had more term deposit money come up for maturity...no point reinvesting with the bank at 1% is there !

my turn to say welcome on board , div to come too shortly

[King1212]

Wow.... everyone onboard now....

Master winner....u onboard too?

[Waltzing]

I could look back in the trust accounts to see what price we used to own them at pre GFC:

Mr B's "$1.05" , i suspect it was the low .90's

well anything less than 1.20 will see you right.

[clown]

Went to Sylvia park today. The new extension is pretty cool. Not much foot traffic being a Saturday, could be due to election day. The warehouse was pretty empty, stock and customers. Kmart was way better and the foodcourts were busy too.

[bull....]

Went to Sylvia park today. The new extension is pretty cool. Not much foot traffic being a Saturday, could be due to election day. The warehouse was pretty empty, stock and customers. Kmart was way better and the foodcourts were busy too.

cool alright the extension even cooler is that the price has broken thru resistance at around 1.19 - 1.20 . blue skys ahead .... hopefully

[clown]

cool alright the extension even cooler is that the price has broken thru resistance at around 1.19 - 1.20 . blue skys ahead .... hopefully

Hope it goes up from here on, it did break 1.2 a couple of weeks ago and then went back to 1.8-1.9

[bull....]

Hope it goes up from here on, it did break 1.2 a couple of weeks ago and then went back to 1.8-1.9

im thinking this time different , bit more visibilty around the economy now than before.

[clown]

im thinking this time different , bit more visibilty around the economy now than before.

Let's hope so.. KPG is late to the party and looking good so far...

[bull....]

Let's hope so.. KPG is late to the party and looking good so far...

1.20 area got tested and held and has since bounced higher to around 1.24 so thats good.

what do you think gmt announced yesterday a revaluation of property up of 4.5% yesterday. KPG revalued down there property assets last march which contributed to there loss for the year so there could be a revalue up as well as the property market hasnt fallen and retail is actually stronger than last year. add in the depreciation on buildings and strong retail showing and kpg NTA is probably going to get a bump up at some stage making the discount to NTA currently even more extreme if you factor these points in.
revalue under way to close the gap , currently most property stocks trade in excess of NTA and have nearly all reclaimed there highs in share price before covid all except KPG so this is the value trade in my opinion.

[King1212]

yes Bull, i was reading GMT report too..if applied to KPG...with current NTA $1.25 then a 4 or 5 % revaluation will be up to NTA $1.30.

All property stocks are trading about 10% to 20% up the NTZ value. No doubt will be back to $1.40 soon....

[bull....]

Kiwi Property puts $170m Palmerston North's The Plaza Shopping Centre up for sale

https://www.stuff.co.nz/business/123175417/kiwi-property-puts-170m-palmerston-norths-the-plaza-shopping-centre-up-for-sale

[tim23]

yes Bull, i was reading GMT report too..if applied to KPG...with current NTA $1.25 then a 4 or 5 % revaluation will be up to NTA $1.30.

All property stocks are trading about 10% to 20% up the NTZ value. No doubt will be back to $1.40 soon....

Except APL...

[Scrunch]

Kiwi Property puts $170m Palmerston North's The Plaza Shopping Centre up for sale

https://www.stuff.co.nz/business/123175417/kiwi-property-puts-170m-palmerston-norths-the-plaza-shopping-centre-up-for-sale


It will be very interesting to see what this goes for. Back in March 2019 the estimated value was $207m at a 7.38% capitalisation rate (when 10-yr bonds were at 2%).
The current $170m value was done as at 31 March 2020 so may have been done or refined during NZ's level 4 lockdown. It was technically based on a 8.25% capitalisation rate, but would appear to be a rate nearer 10% based only on the net rentals of $17.0m quoted in the 2020 annual report presentation.

This $17.0m of net rental was up from $16.8m the year before with a quoted 100.0% occupancy, so the $37m valuation decline was based on stable vacancy and a slight increase in net rental. The valuer therefore looks to have applied significant conservatism within the valuation, which is arguably appropriate when valuing during a national lock-down.

Last time I checked a 8.25% rental on $170m was $14.0m/yr so the March2020 valuation appears to assume a $3m/yr loss of existing rental income and the applicable yield being higher than last yr (which would be appropriate if occupancy was collapsing). Stuff are quoting its nearly fully leased and potential net income of $16.7m so the valuer's negative assumptions don't appear to have come to pass.

I'm not sure exactly how valuers get their capitalisation rates, but I suspect there are links back to margins over government stock. If the applicable valuation was a repeat of March2019 but phrased as a 5.4% margin over 10-yr government bonds, the new capitalisation would be 6.0% (10-yr govt bonds are now 0.57%).

$16.7m/0.06 = $278m. While I'd be surprised if it went for quite this much, something well in excess of $170m is likely. There could be a high gain on sale in the Mar2021 full year report.

Disc holding.

[bull....]

It will be very interesting to see what this goes for. Back in March 2019 the estimated value was $207m at a 7.38% capitalisation rate (when 10-yr bonds were at 2%).
The current $170m value was done as at 31 March 2020 so may have been done or refined during NZ's level 4 lockdown. It was technically based on a 8.25% capitalisation rate, but would appear to be a rate nearer 10% based only on the net rentals of $17.0m quoted in the 2020 annual report presentation.

This $17.0m of net rental was up from $16.8m the year before with a quoted 100.0% occupancy, so the $37m valuation decline was based on stable vacancy and a slight increase in net rental. The valuer therefore looks to have applied significant conservatism within the valuation, which is arguably appropriate when valuing during a national lock-down.

Last time I checked a 8.25% rental on $170m was $14.0m/yr so the March2020 valuation appears to assume a $3m/yr loss of existing rental income and the applicable yield being higher than last yr (which would be appropriate if occupancy was collapsing). Stuff are quoting its nearly fully leased and potential net income of $16.7m so the valuer's negative assumptions don't appear to have come to pass.

I'm not sure exactly how valuers get their capitalisation rates, but I suspect there are links back to margins over government stock. If the applicable valuation was a repeat of March2019 but phrased as a 5.4% margin over 10-yr government bonds, the new capitalisation would be 6.0% (10-yr govt bonds are now 0.57%).

$16.7m/0.06 = $278m. While I'd be surprised if it went for quite this much, something well in excess of $170m is likely. There could be a high gain on sale in the Mar2021 full year report.

Disc holding.

in there annual report they used a wide range of values when looking at there inputs to come to there valuations and factored in material uncertainty so i agree they were very conservative in valuations. Im expecting the range of values used for the inputs to narrow therefore expect at some stage the valuation downgrades will come back as gains over time esp now with a bit more economic visibility.
I would be surprissed if the plaza sold for 170m or less its already on quite a high cap rate

[King1212]

$9.2 gain in valuation...that will bring NTA to around $1.26

[bull....]

market didnt seem to like there update , stock sold down , must have been expecting more bounce back in values? although on a technical basis the stock was over brought as well so might have been good old profit taking

https://www.nzx.com/announcements/362156

[clown]

market didnt seem to like there update , stock sold down , must have been expecting more bounce back in values? although on a technical basis the stock was over brought as well so might have been good old profit taking

https://www.nzx.com/announcements/362156

Maybe they were expecting a dividend update? The SP had a slow climb and a sharp drop.

[bull....]

Maybe they were expecting a dividend update? The SP had a slow climb and a sharp drop.

in past years they have released dividend notice in november

[clown]

in past years they have released dividend notice in november

Will probably know here..

https://www.nzx.com/announcements/362453

[bull....]

Will probably know here..

https://www.nzx.com/announcements/362453

probably lets hope its 3c+

[King1212]

Retailers sales are strong....so.. expecting good dividend n increase of NTA as 9m valuation gained

[King1212]

NTA increases to $1.26 with recent valuation gained

[Soolaimon]

NTA increases to $1.26 with recent valuation gained

And the share price drops ?????

[King1212]

Easy boys! Share market...n us election...

[King1212]

Gs upgrade scentre group to oz$3.55..

Citing...great covid recovery...in oz n nz.

We managed to control covid long before oz...so..in my opinion...sp will be back to $1.40..in three weeks time..

Dividend will be back...hoping they will blis the shareholders with special dividend...as they did not pay last one

[King1212]

great update from Scentre group!!!!!

[King1212]

Vaccine news out...90persen effective!! $1.50 here we come!

[bull....]

Vaccine news out...90persen effective!! $1.50 here we come!

1.50 be too cheap , lets hope they do a big div , announcement in next 2 weeks

[bull....]

great update from Scentre group!!!!!

yes i had a read very promising results , not effected much at all

[King1212]

Simon pry n all others are up 20 to 30 persen

[bull....]

retail reits were up big in the US last night

[bull....]

scentre group up 25% today

[bull....]

huge volumes buying today must be the 7% + grossed dividend perhaps coming our way

[King1212]

Exciting! Dow continues with value stock rotation... investors are selling growth stocks n swap with value stocks

[bull....]

in aus yesterday mall stocks were up huge

uniba 44%
vicinity shopping centres 15%
scentre 15%

[Waltzing]

vaccines are changing the game for sure. we moved into asx yesterday on beaten down sectors.

DISC: holding ARG, GMT and KPG.

[bull....]

vaccines are changing the game for sure. we moved into asx yesterday on beaten down sectors.

DISC: holding ARG, GMT and KPG.

smart move getting into kpg , i still have it undervalued on a return to normal basis

[Waltzing]

KIP was held in several family trusts before the GFC.

we are overweight ARG, took profits on GMT and we are underweight KPG... we should have bought more (small holding only pitty).


but we are moving back into travel after yesterdays vaccine results. Travel sector is beaten down still.

Last sector to reflate.

[clown]

Is this a trusted source? Doesn't paint a good picture for KPG.

Will KPG stock price crash?According to our analysis, this can happen.


https://walletinvestor.com/nzx-stock-forecast/kpg-stock-prediction

[bull....]

Is this a trusted source? Doesn't paint a good picture for KPG.

Will KPG stock price crash?

According to our analysis, this can happen.


https://walletinvestor.com/nzx-stock-forecast/kpg-stock-prediction

looks like a lot of mumbo jumbo

[clown]

looks like a lot of mumbo jumbo

LOL.. yes kind of what I thought too as the current situation doesn't reflect on their analysis.

[Scrunch]

LOL.. yes kind of what I thought too as the current situation doesn't reflect on their analysis.

The brokers still have a negative formal price, but I'd expect that to change over the next few months. The mid-April average estimate was $1.53. The current average according to marketscreener is $1.21. Really?, I don't believe the outlook now is 20% worse than it was when NZ was in L4 lockdown.

Also the investerwallet analysis has the same maximum price as the maximum broker estimate so there's a good chance its just a bunch of formulae doing discount calculations from broker estimates.

[kiora]

But then again, it may be right IF interest rates move up again?

[King1212]

Sp will be $1.40 next Monday

[clown]

Sp will be $1.40 next Monday

I guess we will have to wait until Mondays announcement. Hope they do pay a dividend which may drive up the price.

[King1212]

No reasons not to pay... business is normal for months now in nz. All offices n wellington properties are leased out to big fishes and government bodies.

Two vaccines are effective n on the way...

[kiora]

And interest rates won't/shouldn't rise?
In the past they would have surely?
Well call me cynical if you like !!!
https://www.nzherald.co.nz/business/house-price-surge-just-getting-started-westpac/OMNAAKV6WO33T7P4SURMKSR63U/

[King1212]

Lol...too many of u guys missed the train. Bitter.. isn't?

Mr Orr n federal said...low interest is here to stay for a while....

Tut...tut....

[bull....]

fed say low rates for years. expecting a nice div announcement this mth propel shares higher

[kiora]

Lol...too many of u guys missed the train. Bitter.. isn't?

Mr Orr n federal said...low interest is here to stay for a while....

Tut...tut....

I don't think so :)
We are just on different trains. Ones the express and ones the slow train :)

I have gone well past the destination years ago and on my 5 th journey :)

[King1212]

90c holder here

[Waltzing]

we have just been whatching some very usual share parcel movements in a listed property stock pre auction. Only players with broker accounts or direct access can move parcel on , up and down and off that fast.

[bull....]

should get dividend announcement in next few trading days

[Waltzing]

ready for more ..

[LaserEyeKiwi]

should get dividend announcement in next few trading days

Earnings are Monday morning, was advised weeks ago.

[arekaywhy]

can we still vote for you?

[clown]

Results out: https://www.nzx.com/announcements/363655

2.2 cents dividend announced.

[King1212]

$1.29 NTA...cheapest in the town...

[LaserEyeKiwi]

No movement on share price yet, but a 30k block trade just completed at $1.275

[LaserEyeKiwi]

with 2.2c half year dividend, and guidance of 4.90-5.15 for full year (2.70c-2.95c for H2) can project that next year will be roughly 5.5-6c dividend (if we multiply 2nd half dividend guidance by two).

so forward dividend yield roughly 4.7% at present with growth likely.

[Habits]

Npat good result plus 47 percent yoy... and high > 99 percent occupancy of existing tenancies, I really like this company for its existing properties and ongoing development prospects.

Just bought a block of shares at 1.26 which seems like good price compared with last week 1.33

[King1212]

traders playing game....this is a good recovery stock...

[bull....]

them giving guidance for the next year is the big positive , results as expected

[King1212]

Traders picked up some decent amount or bargain shares this morning.....the weak one would sold out this morning

[Waltzing]

as debt increases in the economy logistic stocks and commercial property may well be the new gold along with electricity generation.

[Habits]

Yeah I got some to add to the holding but am def not a trader. The LT prospects through their development pipeline are rosy so i dont mind them keeping the 2020 final dividend.

[Waltzing]

what a dumping !

starting to feel like money is moving off shore as property stocks except ARG slow..

[bull....]

yes some fund manager is having a stinking dump

[King1212]

End of month rebalancing.... nothing to worry... occupancy 99 persen...

This stock is a safe one..better than bank n safer too

[Waltzing]

we cant talk we are moving back to offshore travel. the international travel stocks are where the new fish ground is.

but at this price ... we should buy some more....

[King1212]

Yup...let people doubt ...keep buying...just like HGH.... people were doubting HGH....now... everyone is buying back HGH

[LaserEyeKiwi]

The latest Retail NZ Sales Index, shows that spending through November remained strong, and that total spending since March is now ahead of last year.

“The Retail NZ Sales Index for November reports that spending through the month was around 25.7 per cent higher than last year, and that total spending since March is now 3.4 per cent higher than for the same nine months last year,”

[King1212]

Patiently waiting the sp back to glory. Just like HGH. NTA $1.29....dividend declared.... occupancy 99.1 persen with at least 4.7 years leased...nothing could be better than this KPG...

Last day to buy tomorrow for dividend .... obviously it was manipulated by instos in last couple days.

[clown]

Yikes!!! SP not looking too flash this week.

[LaserEyeKiwi]

Yikes!!! SP not looking too flash this week.

yes a little weird it has fallen off around 10% from its recent high, given the positive outlook. Although being a long term holder I'll gladly take a shot term lower price until the Dividend payment comes through next week and I can reinvest. After that I'll gladly take a nice price rise :)

[clown]

yes a little weird it has fallen off around 10% from its recent high, given the positive outlook. Although being a long term holder I'll gladly take a shot term lower price until the Dividend payment comes through next week and I can reinvest. After that I'll gladly take a nice price rise :)

Haha yeah, looking forward to the divvie. Was thinking of adding more at the current SP.

[bull....]

its not company specific the sell off , most off the property stocks have come off a bit lately. high occupany and dividend yield will appeal

[JSwan]

Most likely a rotation of stocks in the sector, from KPG to ARG

[King1212]

Nah...u dreaming.

Uncle Jarden just slapped KPG, VGL and ZEL a buy...

Said the stocks will recover well 2021...

[ados_nz]

Amen. I still can't understand a KPG under NTA. Solid results, positive forecasts and a stable asset base.....

Disc. HOLDING

[King1212]

Normally sp will be down after ex dividend for couple weeks...then slowly up again

[Waltzing]

We did our ROTATION from GMT, PCT and KPG to ARG in April... it is strange that KPG has taken such a hiding but 2021 is not a recovery year baked in the cake... after the GFC there was a long long recovery. This will be shorter one hopes and government spending has been brought forward. We have bought and sold and bought again as the chart did not show enough strength and someone had dumped hard on this stock. ARG has indeed been the winner we picked back in april..

[King1212]

Dividend payment next week...will top up once the money received....

[Justin]

everyone seems confident of this company here，but any disadvantage of this company？

[King1212]

Don't see any disadvantages

Dividend confirmed..5c ish...
Retailers performed really well...HLG..warehouse, BGP results as evidence
Occupancy at 99%
People are starting to go back to offices around the world
Gearing at 29%
NTA at $1.29

Solid assests...will only appreciate.

Nz covid cases are non existent.

People are spending money this Christmas! As low mortgage interest ..money from overseas holidays are piling up. Kiwis tend to spend thier time at malls....