KPG - Kiwi Property Group Limited

[Baa_Baa]

KPG’s Build-to-rent complex at Sylvia Park (Residio) featured in a one news item on the 6 o’clock news tonight.

https://www.1news.co.nz/2024/05/04/b...th-law-change/

A good watch, bodes well for the future, can't build em fast enough to meet demand!

[percy]

A good watch, bodes well for the future, can't build em fast enough to meet demand!

Reminds me of what people were saying a few years about retirement villages.?

[Baa_Baa]

Reminds me of what people were saying a few years about retirement villages.?

A few years ago, was before the arse fell out of the property market. We're moving on now, finally, with inflation falling, unemployment rising, OCR stalled and on the verge of declining, listed property sector investments imo present the best forward opportunity and I'm loading up while the prices are good. KPG is one of my fav's.

Yeah, plenty of other substantial companies/funds piling into the BTR market as well. Good that KPG is a first mover in BTR and will satisfy early demand. Drury is truely inspiring, particularly the wrap around commercial, retail and community spaces.

Very happy to be invested in KPG and accumulating at a massive discount to NTA, while also enjoying quarterly gross dividends at 8.5%. Also encouraging in this dire property market that KPG early April recording a 0.1% or $3.6 million increase in the fair value of its property portfolio, which was expected to be worth $3.2 billion at the end of the period.

[percy]

"Yeah, plenty of other substantial companies/funds piling into the BTR market as well."


Next up a build to rent retirement villas.?

[winner69]

This is encouraging news, this is the 2nd executive position they have eliminated recently - I think it shows they are serious on cost control.

https://www.nzx.com/announcements/430356

“Kiwi Property today advised that Ian Passau, GM Development, will be leaving the company following a restructuring of its development function.

Kiwi Property Chief Executive Officer, Clive Mackenzie, said: “Ian has made a huge contribution to Kiwi Property over the past seven and a half years, leading major initiatives such as the Sylvia Park galleria expansion, the construction of our Resido build-to-rent scheme and the successful upzoning and commencement of development at our Drury landholding.“

“Unfortunately, given our focus on cost reduction and with no new development projects commencing in the short term, we’ve been forced to make some tough decisions. I want to thank Ian for everything he has done for the business and we wish him all the best for the future."

Ian will remain at Kiwi Property until mid-August 2024.”

Hope Ian got a very generous redundancy payment ….probably was on a decent salary and 7 years service

[kiwikeith]

Hope Ian got a very generous redundancy payment ….probably was on a decent salary and 7 years service

I am sure he was on a decent salary. I hope he did not get a generous redundancy payment. Anyone who works corporate development should be well aware that it is not a function that is guaranteed to last forever. As a shareholder I will be happy when Kiwi reverts back to being more of a property investor rather than property developer.

I do wonder if any Aucklanders on this site have been along to have a look at KPG's Resido BTR properties. Any feel for the supply/demand dynamic?

[Baa_Baa]

[snip] As a shareholder I will be happy when Kiwi reverts back to being more of a property investor rather than property developer.

I do wonder if any Aucklanders on this site have been along to have a look at KPG's Resido BTR properties. Any feel for the supply/demand dynamic?

They're getting there, imo it's more about a rebalance rather than B&W property investor vs property developer. I trust that they will continue with their strategy to develop the properties disclosed, and that returns margins to investors, but also investment in the long term rental returns. Either way, KPG have a substantial portfolio and continue to reward investors with 8.5% gross dividend returns, while also reshaping their strategy and portfolio. Impressive imo.

You don't have to be an Aucklander to have had a look at the new BTR properties, they are classy accomodation and as KPG said just this week, demand is strong. Just a matter of completing them and filling the property with happy renters.

[SPC]

A yeild of 8.5% calculated on a heavily depressed share price of 82c that is...(6.8c p/share). Not complaining.

[kiwikeith]

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.

I am not sure how the online trading will pan out. I, myself, am getting fed up with the online shopping. So much of the stuff coming out of china is such low quality. (Golf tees that break after one hit, golf glove too small, thermal vest too tight and low quality, cotton sports socks so thin that you might as well not have any socks etc etc) OK I was refunded the money on the golf glove but still nothing beats being able to touch and feel the product especially clothing before buying,

[LaserEyeKiwi]

OH MY GOODNESS - I MISSED THIS LAST WEEK!

Only just saw this now, how did anyone else not post this??? : https://www.nzx.com/announcements/427035



The Vero Centre is the 2nd largest income generating asset in the KPG portfolio with a book value of $467 Million, and generates approximately $25m in net rental income.

If a sale is completed - assuming somewhere around $425m-$450m price - this will radically reshape KPGs balance sheet. Huge move.

Super interested on whether this eventuates, hopefully we get an update during earnings.

For context, if KPG sold Vero centre and used the proceeds to pay down debt, then the KPG gearing ratio would fall in the ballpark of 1000 basis points, from ~35% to ~25%.

Alternatively they could maintain the current gearing ratio and instead implement a large capital return by way of a one off special dividend or a large buyback program.

Or another option is they simply sit on the cash for the moment safe in the knowledge that they have plenty of cash for future Drury stage 2 development, or for the big LynnMall mixed use development, or for BTR 2 & 3 at sylvia park - all of which are currently planned for later in the decade.