Seems like these shares must be overflowing the top of the barrow you are pushing.
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Earnings call comments on build-to-rent potential:
- higher yields from build-to-rent property
- lots of support from government about creating build-to-rent market, and discussions with government
Ive watched this from the sidelines for some time and it seems they should be now in for a substantial lift in sp.Great forecast and future opportunities. NTA of $136?Its a no brainer for me
Surely NZ's GDP is now going to drive decisions and stopping the building of dwellings is not something that anyone wants to held be accountable for if they meet all legal compliance on statue books.
This new development will be something they drive to completion as hard as they can.
Earnings comments regarding gearing ratio / debt
currently only committed to $60 million new Sylvia park office tower. Add to that the Drury development (even if fast tracked) would be an additional $50 million over 2 years on earthworks & infrastructure (before building of structures would start in mid or late 2023 presumably). Build to rent potential start of construction seems like a 2022/23 at the earliest as well.
My interpretation of all that means that after the disposal of Northlands & Plaza malls, KPG is going to have a lot of excess cash on the books this year.
They did briefly mention growing “other” revenue sources “including funds management”. I’m not quite sure what they mean there - and no analyst asked about it unfortunately. I’m wondering if that has something to do for the intended use of the big influx in cash. Maybe potential for KPG to start investing in other companies???
Rated more BCA (beagle cautiously accumulating), a few more, (got a few more thiis morning and will possibly add more on any untoward weakness). Minimum of 5.3 cps for people on a 33% tax rate = 7.91 cps gross which on $1.21 gives 6.5% gross yield and a 15 cent discount to NTA. These are good metrics in an ultra low interest rate environment and again, this is based on a minimum of 5.3 cps in annual dividends which I would like to think might rise to close to 6 cps in FY23 which would lift gross equivalent yield to 7.4%.
There's no timeline to get back to the 6.95 cps distributions they were paying pre covid though and details on the extent of capital funding required for all the projects proposed is scant. The possibility of further Covid lockdown's should not be overlooked as a key business risk here.
All that said I think Auckland badly needs a satellite suburb at Drury and I am sure many of the thousands of new residents at Pokeno would enjoy shopping there.
A lot to like about the next 5 years for KPG. Drury is going to be a huge pipeline of growth and so is the little office blocks and build to rent apartment blocks they bolt onto their world class malls.
I would be shocked if the government doesn't approve the Drury project. New housing and infrastructure spending helps the government and their re-election chances I would have thought. Would go as far as to say that Cindy would be there with a hard hat on cutting the ribbon for a good photo op.
A solid hold imo and when you can buy them at a 11.5% discount to NTA it's very compelling.
In case you missed it - the earnings call Q&A made it pretty clear the dividend will be higher than 5.3c this coming year, and expect a projected dividend increase once the northlands and plaza sales are finalized (both have conditional offers already).
Also they made it clear they don’t have any large capital requirements over the next 2 years ($60 million for new Sylvia park office tower is only near term planned cost, and $50 million for Drury earthworks over 2 years if fast track approved)
I listened in.