KPG - Kiwi Property Group Limited

[Beagle]

really should go back and re read but far too busy..

someone should to the AGM and turn the heat up....

got the best retail property in NZ and its "Show us the MONEY!"

its a "Jerry MG" moment for sure....

https://www.youtube.com/watch?v=mBS0OWGUidc

I think its crystal clear there is no plan to grow dividends. Management's plan seems to be focused entirely on growing their asset base to justify ever increasing salaries, bonus's and "performance fees"

Note the subtle nuance change in tone here...this is what they said last year

Dividend
Kiwi Property will pay a final cash dividend of 2.95 cents per share for the six-month period ended 31 March 2021. Payment will be made on 24 June 2021. Kiwi Property’s total cash dividend for FY21 amounts to 5.15 cents per share, equivalent to 90% of Adjusted Funds from Operations (AFFO) [Note 2]. AFFO guidance for FY22 will be provided once the sale of The Plaza and Northlands has concluded, however based on current projections, next year’s dividend is expected to be no less than 5.30 cents per share

Now, despite not concluding a sale of the Plaza and Northlands, (said in the call to be eps accretive if they were held) the dividend guidance is for 5.3 cps, (not above that figure).

I guess we could be charitable and say in the circumstances given the long lockdown in Auckland in late 2021 and the current Omricon mess that at least the dividend didn't go down yet again but being chaitable to management of KPG does not come easily to this dog considering in real inflation adjusted terms dividends were 13 cps 15 years ago !

I like this bit from their announcement last year

Outlook
“Kiwi Property enters the new financial year with good momentum and a clear focus on achieving our strategic priorities. We start FY22 with exciting prospects ahead of us, including Drury, the new office tower at Sylvia Park and potentially BTR. We are focused on realising these and other opportunities, with a continued commitment to creating value for our stakeholders,” Mr. Mackenzie concluded.

The only stakeholder they seem to be focused on creating value for is management and staff lol

[Waltzing]

Its a company that has been captured by some slick wide shoulder padded sales man....

"Liar's Poker"

its a rerun ...

at some point the insto's must apply the heat...

[LaserEyeKiwi]

Shrugging my shoulders here - I continue adding for the 5% yield, the big discount to NTA, and the gigantic value still to be unlocked at Drury which is not at all accounted for yet on the books.

Too each their own, I don’t mind accumulating as much as I can before the asset value is realized, whenever that may be.

[Waltzing]

I agree with you LEK that the actual asset base is FAB...cant argue with that and the LAT:LONG is perfect.

next profit and loss statement and balance sheet is where the action is.

ever hoping they will unlock the value.

[Beagle]

Shrugging my shoulders here - I continue adding for the 5% yield, the big discount to NTA, and the gigantic value still to be unlocked at Drury which is not at all accounted for yet on the books.

Too each their own, I don’t mind accumulating as much as I can before the asset value is realized, whenever that may be.

Discounts to NTA are not uncommon now. Good examples are Investore Property Ltd also trading at a 20% discount to NTA and the well respected and regarded Argosy Property with their excellent track record of growing NTA and dividends over many years now trading at a 15% discount to NTA.

With higher interest rates and headed higher still future rental capitalization rates the valuers use will rise and with it the NTA will fall and the market is merely reflecting future expectations of REIT's coming out in the future with portfolio devaluations (as compared to revaluations previously). This process could easily go on for several years as we see a sustained rise in interest rates over time. For this reason I think the whole REIT sector is vulnerable.

A little while back KPG stood out as the only REIT with a discount to NTA, now if anything, considering managements systemic failure to add any value over many years I would argue their discount to NTA should be even higher.

I rate the whole REIT sector as underperform and KPG the worst possible choice in the sector. If the yield gets above 6% net, (currently 4.82%) it might be worth a short term trade. I'll save you the maths, that's 88 cents assuming KPG don't drop the dividend again next year, which is not necessarily a safe assumption.

[LaserEyeKiwi]

Discounts to NTA are not uncommon now. Good examples are Investore Property Ltd also trading at a 20% discount to NTA and the well respected and regarded Argosy Property with their excellent track record of growing NTA and dividends over many years now trading at a 15% discount to NTA.

With higher interest rates and headed higher still future rental capitalization rates the valuers use will rise and with it the NTA will fall and the market is merely reflecting future expectations of REIT's coming out in the future with portfolio devaluations (as compared to revaluations previously). This process could easily go on for several years as we see a sustained rise in interest rates over time. For this reason I think the whole REIT sector is vulnerable.

A little while back KPG stood out as the only REIT with a discount to NTA, now if anything, considering managements systemic failure to add any value over many years I would argue their discount to NTA should be even higher.

I rate the whole REIT sector as underperform and KPG the worst possible choice in the sector. If the yield gets above 6% net, (currently 4.82%) it might be worth a short term trade. I'll save you the maths, that's 88 cents assuming KPG don't drop the dividend again next year, which is not necessarily a safe assumption.

Property for Industry just this morning reported a 22.2% increase in its property value from revaluation. not sure there is any sign of NTA decreases in the near term horizon if that's any guide. Plus there is also the impact of massive increase in land valuations over the last year to contend with.

We will see KPGs latest revaluation announced in the next 3-5 weeks, so hopefully that will provide a good guide for its existing developed properties (doesn't account for its future projects on undeveloped land assets of course).

[Beagle]

Property for Industry just this morning reported a 22.2% increase in its property value from revaluation. not sure there is any sign of NTA decreases in the near term horizon if that's any guide. Plus there is also the impact of massive increase in land valuations over the last year to contend with.

Industrial property is still in great demand because its a growth industry in massive demand and supply constrained. Cap rates on industrial property are at 100 year lows, I see their portfolio at just 4.4%. I am confident that will be the last revaluation PFI investors will see. This is also reflected in the share price being below the new NTA of $3.03 despite PFI's excellent track record. I put it to you that the market is often far more forward looking than either you or I give it credit for. 90% of that gain in NTA was due to a huge move down in capitalization rates...obviously that ~ 80 cent gain in NTA resulting is reversible when cap rates firm up again. Its probably also worth noting that those cap rates were as per valuation in December 2021. A lot has happened in the market since then including inflation numbers here and overseas that were shocking and higher interest rates.

In terms of capital preservation...I believe for the foreseeable future investors in all REIT's are skating on very thin ice.

[winner69]

lost nearly 20% of that dividend today ...... at least the yield is now 4.82% ....if one os lucky it could be 4.86% later in week and if one is really luck 5.00% next week (share price 105)

[Waltzing]

ARG - hoping for a drop to the 125 - 130...

inflation doesnt last forever there will be an up cycle in next 5 years..

[winner69]

This was interesting from the PFI presentation

Online sales in New Zealand expected to grow from the current 11% to 17% (or $9.3Bn) by 2025

− Based on this growth in online sales alone, it is estimated an additional 230,000 sqm of warehouse space will be needed by 2025
- PFI’s portfolio set to benefit from this thematic, through strong forecast rental growth and continued low levels of vacancy

Seems a better proposition than having retail space (not going to grow?) and building rentals