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Kiwi Income Property Trust profit increase - 9.7%

19 May 2004

Kiwi Income Property Trust increases profit by 9.7%

Auckland - Kiwi Income Property Trust today reported a 9.7% increase in net income after tax to $49.1 million for the year to 31 March 2004, with the major boost coming from the growth and strength of its leasing across the retail portfolio, and a reduction in interest costs.

Total assets grew $187 million to $1.099 billion, up from $912 million the previous year, while investors’ funds stood at $746 million, a rise of $80 million compared with $666 million as at 31 March 2003.

Chairman of the Manager of the Trust, Jim Syme, said: “The result is very satisfying and demonstrates the Trust’s success in managing opportunities for leasing growth across its diversified portfolio of prime office and retail assets. It also highlights the way in which the Trust’s prospects for future growth have been improved in the past year.”

“The Trust has benefited from the continuing buoyancy of the retail sector, and it has capitalised on the positive operating environment to enhance the quality of its assets across the board. Thus, it is well placed to deliver long-term stable returns from its lease commitments.” Mr Syme said.

Operating highlights of the financial year to 31 March 2004 include:

Net income after tax of $49.1 million, up 9.7% on the previous year Total gross dividend of 8.57 cents per unit declared for year, ahead of the projection of between 8.30 and 8.50 cents per unit Upwards revaluation of portfolio by $50.6 million increasing net asset backing by 7% to $1.15 per unit Total assets increase by $187 million to $1.099 billion Centre Place Shopping Centre and Vero Centre record revaluation gains of $12 million and $10 million respectively
The landmark Unisys House in Wellington’s CBD is acquired for $44 million Successful capital raising of $25 million in May 2003 The $91 million Northlands expansion is largely complete with the Centre doubling in size to 41,000 m2, and occupancy at 99.6%. The Centre’s revaluation gain at $17 million is $13 million ahead of the prospectus forecast of $4 million Strong leasing across both the office and retail portfolios increases average occupancy to 98.2% Strong progress continues with the $10 million refurbishment of North City, with the foodcourt opening successfully in March 2004 National recognition of the energy savings achieved at the Vero Centre with the prestigious EnergyWise Award.

Chief Executive of the Manager of the Trust, Angus McNaughton, said “the 9.7% increase in net income after tax was primarily the result of improved leasing across the portfolio, income from the purchase of Downtown Plaza Shopping Centre in Hamilton from July 2003, and a reduction in interest costs.”

“New tenancies at Northlands were also taken up progressively throughout 2003, with the number of specialty stores increasing from 65 to 135. The unique grouping of five anchor tenants, The Warehouse, Farmers, Pak’N Save, Hoyts Cinemas and Countdown, make this Centre a special one in the national retail scene. Northlands is now the largest enclosed mall in New Zealand.”

“Overall, leasing across the Trust’s retail and office portfolio was very strong and income streams will be enhanced by initiatives undertaken during the past year. The office portfolio will also be further diversified by the acquisition of Unisys House in Wellington’s CBD and government precinct. Unisys House was purchased for $44 million, and is predominantly occupied by government tenants,” Mr McNaughton said.

The Trust’s market capitalisation, calculated by multiplying the unit price by the number of units on issue, increased a further $59 million to $723 million as at 31 March 2004, up from $664 million.

Mr McNaughton said the Trust’s management team was committed to maximising income and providing stable long-term returns for unit holders. The total annual return for the Trust for the year to 31 March 2004 was 11.9%.

“Over the past three years the Trust has recorded an average annual return of 19.1% outperforming the NZSX50 Gross Index that returned 11.5% per annum.”

On 27 April 2004, after the Trust’s balance date, the Trust successfully raised NZ$50 million through a placement to fund the acquisition of Unisys House. The newly issued units rank equally with ordinary units, but will not participate in the dividend for the year to 31 March 2004, payable in June 2004. Also after balance date, the conditional purchase of NGC House for $19 million was announced. NGC House is adjacent to Unisys House, and will further diversify the Trust’s tenancy profile. Settlement is scheduled for 30 September 2004.

A final dividend of 4.345 cents per unit gross has been announced by the Trust including imputation credits of 0.524 cents per unit bringing the total gross dividend for the year to 8.569 cents per unit, ahead of the Trust’s projection of between 8.30 and 8.50 cents per unit, and also ahead of the previous year’s gross dividend of 8.538 cents per unit. The record date for the 2004 final dividend is 11 June 2004, and the payment date is 25 June 2004.


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