Kiwi Income may use note sale for $130M tower

Kiwi Income may use fundraising for proposed $130M office tower in Auckland

Nov. 10 (BusinessWire) – Kiwi Income Property Trust, the second-largest property investor on the NZX, said a proposed $130 million office tower in Auckland has been selected as preferred relocation option for a potential tenant who would occupy the entire space.

Kiwi Income’s manager presented the development proposal to the investment-grade rated company and negotiations are expected to continue through until the first-half of 2010, the trust said in a Nov. 6 statement on an offer of up to $150 million of convertible notes.

The proceeds of the sale would initially be used to repay bank debt and may be applied to new investment opportunities, it said. “There is no certainty the proposal will proceed,” the trust said.

The building would have 18,000 square meters of office space and would be expected to be leased for an initial 18-year term starting in 2013, it said.

The mandatory convertible notes offer would be to New Zealand residents and Australian institutions, with the entitlement offer to New Zealand registered unit holders.

Its existing 8% convertible notes mature on June 30, 2010. The shares last traded unchanged at $1.03 and have gained about 10% in the past 6 months.

The trust is being advised by Goldman Sachs JBWere.

(BusinessWire)