KPG - Kiwi Property Group Limited

[Beagle]

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

Beagles are pretty good at sniffing out a feed or three

[Beagle]

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[Biscuit]

Thanks for specific info. The more the better.

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

[simla]

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

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

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

[SPC]

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

[Beagle]

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

[SPC]

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

[LaserEyeKiwi]

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

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

[Beagle]

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

[Biscuit]

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

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