KPG - Kiwi Property Group Limited

[SPC]

I wonder if the Aurora sale was derailed by the upcoming permanent removal of depreciation? Less attractive to the buyer?.
Otherwise I'm beginning to think kpg are really ahead of the pack on future BTR strategy. From laggard to leader?...maybe..hope so.

[RTM]

http://nzx-prod-s7fsd7f98s.s3-websit...652/402247.pdf

Good reminder of what kind of market we have here. Look at the off-market transactions.

[Sideshow Bob]

DRP at $0.842

[LaserEyeKiwi]

Interesting:

https://www.nzx.com/announcements/418796

Kiwi Property today released its draft valuations for the six months ending 30 September 2023, disclosing a preliminary 2.4% or $77.1 million decrease in the fair value of its diversified property portfolio. The Company’s mixed-use, office, retail and other properties are expected to be worth $3.1 billion at the close of the period.

Kiwi Property Chief Executive Officer, Clive Mackenzie said: “New Zealand’s high inflation, high interest rate environment has contributed to a widespread decline in property values over recent periods."

“While this is disappointing, we’ve continued to deliver an impressive operational performance, led by our mixed-use centres, such as Sylvia Park, LynnMall and The Base. Strong rental growth across these assets has offset softening capitalisation rates and helped mitigate the reduction in property values. It’s also pleasing to see retail property valuations beginning to strengthen, suggesting mounting confidence in the sector after a challenging couple of years.”

The draft valuations are expected to result in the following movements through the period.
• Mixed-use portfolio: -1.0% or -$20.1 million, with strong rental growth partially offsetting capitalisation rate expansion of 17.2 basis points.
• Office portfolio: -5.8% or -$50.8 million, reflecting headwinds in the office sector in New Zealand and offshore.
• Other properties: -1.7% or -$2.3 million, driven by capitalisation rate softening.
• Overall investment portfolio: -2.4%, led by capitalisation rate expansion of 27.8 basis points.
• Net tangible asset backing per share: $1.18, a reduction of 5 cents.

Kiwi Property’s draft valuations have been determined by independent valuers and are subject to finalisation and external review by Kiwi Property’s auditor, Deloitte. They will be confirmed in the Company’s interim FY24 financial statements, scheduled for release on 27 November 2023.
ENDS

[winner69]

NTA drops to $1.18

Jeez, it was $1.45 only 18 months ago and $1.43 in 2019

No wonder share price is where it is …maybe even saying more falls in valuations on way …..even though Clive raves about ‘valuations beginning to strengthen’ but then suppose he has to say that to avoid KPG getting to dog status.

[kiwikeith]

The issue with KPG is that it seems to be drifting away from property investor more towards property developer which is a completely different business. The residential build to rent business and Drury development should both benefit from massive immigration which appears to be back in vogue.

[Baa_Baa]

The issue with KPG is that it seems to be drifting away from property investor more towards property developer which is a completely different business.

That's true, though it is largely not at the expense of the high occupancy and revenue generating assets that the company continues to have. It is an adjunct to the historical norm, which I think is a good thing, to retain the earners, sell the losers and focus on development of the new regime. Personally I think KPG strategy is very well thought out, it will retain the dividend hungry investors with it's high dividend yields, and perk up some interest from investors who buy in to the longer term strategy.

It is long term though and gauging from this place, few have much horizon beyond the next dividend cheque or whether the SP is up or down. I think we're not talking to the atypical KPG investor who probably isn't much concerned with discussion groups and is more focused on their regular pay check. Which KPG do very well.

The residential build to rent business and Drury development should both benefit from massive immigration which appears to be back in vogue.

It should benefit I agree, though conflating the 'now' immigration situation, into the future, the long future when Drury will be a solid earner, is imo a long bow. I don't think current or short term immigration settings will have much, or any real effect on KPG, or Drury - which doesn't exist and won't for some time yet. Longer term, yes I've bought into BTR and think KPG are the most ambitious and forward looking REIT and am happy to have a balanced portfolio % allocated to it.

[LaserEyeKiwi]

As my mate LaserFistsKangaroo might say - Crikey!

After todays late day sell off, gross divi back up in ~10% land!

might have to start considering breaking my prohibition to adding more to my outsized position.

[Norwest]

After todays late day sell off, gross divi back up in ~10% land!

might have to start considering breaking my prohibition to adding more to my outsized position.

I grabbed a bunch at auction close 0.82 been watching for a while but I think its oversold now.

Where do you get 10% from? should be just over 8% gross yield...

[Baa_Baa]

I grabbed a bunch at auction close 0.82 been watching for a while but I think its oversold now.

Where do you get 10% from? should be just over 8% gross yield...

Depends on what tax rate you're on, whether tax on the gross yield is more or less than you're paying on your income. 39%'ers are getting better than 10% gross.