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  1. #1
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    Default KPG - Kiwi Property Group Limited

    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.
    Last edited by Waiuta; 16-05-2016 at 12:46 PM. Reason: Punctuation
    A quote attributed to Margaret Thatcher goes along the lines of
    "The problem with socialism is that eventually you run out of other people's money."

  2. #2
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    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.

  3. #3
    Reincarnated Panthera Snow Leopard's Avatar
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    Thumbs up Bought new socks recently

    Do not quote me on this but I think that much of the property gain can be attributed to the current low interest rates and how that is factored into the valuation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
    Last edited by Snow Leopard; 16-05-2016 at 02:46 PM.
    om mani peme hum

  4. #4
    percy
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    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.
    Last edited by percy; 16-05-2016 at 03:21 PM.

  5. #5
    ShareTrader Legend Beagle's Avatar
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    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.
    Last edited by Beagle; 16-05-2016 at 03:37 PM.

  6. #6
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    Quote Originally Posted by percy View Post
    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.

  7. #7
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    [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% !!

  8. #8
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    Quote Originally Posted by kura View Post
    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...

  9. #9
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    Quote Originally Posted by janner View Post
    Spending nothing more than time...
    Disc. Hold no retail..

  10. #10
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    Quote Originally Posted by janner View Post
    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.

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