Kiwi Property‘s net profit falls with drop in valuation gains

Kiwi Property has made a strong full year underlying profit, with increased rental income driven up by recent development and purchases.

Kiwi Property says the expansion of Auckland‘s Sylvia Park is a major focus. Photo: Supplied

New Zealand‘s largest property company‘s net profit fell 16 percent to $120.1 million in the 12 months ended in March, largely reflecting a 35 percent drop in valuation gains, over the year earlier.

However, the underlying profit, which excludes the valuation gains, rose 8 percent to $111.3m, including a 5 percent lift in net rental income to $192.1m.

“Supportive economic and property market fundamentals, in combination with the robustness of our property portfolio provides us with confidence the company will continue to deliver a strong financial performance,” said chair Mark Ford.

Total revenue fell 4 percent to $277.8m.

The company said the quality of its investment portfolio improved with the sale of non-core assets, strategic purchases and $370m of development projects underway.

Chief executive Chris Gudgeon said the expansion of Auckland‘s Sylvia Park was a major focus.

“Our balance sheet remains strong with gearing reducing to 29.7 percent as at March 31, down from 34.5 percent in the prior year,” he said.

The company‘s $3.1 billion investment portfolio was 99.6 percent occupied at year‘s end, with an weighted average lease term of 5.3 years.

The result included the $123m sale of Wellington‘s Majestic Centre, while the $100m sale of Porirua‘s North City would settle in the current year.