Kiwi Income raises $120m

Kiwi Income has managed to raise $120m as other IPOs have floundered

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Kiwi Income Property Trust, owner of Auckland’s Sylvia Park Shopping Centre, raised $120 million through the sale of convertible notes, showing investors are attracted to a high fixed return in a market where IPOs have faltered. 

A quarterly-paid interest of 8.95% is due on the notes for five years, which KIP will initially use to reduce net bank debt. The notes convert to KIP shares in December 2014. The notes themselves will be quoted and traded on the New Zealand Stock Exchange under the code KIPGC from Dec. 16. 

Kiwi Income Property Trust’s property portfolio is valued at $1.83 billion, including key assets such as the Sylvia Park, Auckland’s Vero Centre and Wellington’s Majestic Centre. It includes over 750 tenants across its portfolio, maintaining at least a 98.5% occupancy rate over the past five years. 

Milford Asset Management manager Alan Moore said the yield offered by Kiwi Income Property Trust is attractive. 

“Property in general has been a bit difficult and a bit of a mixed bag, with a number of distressed sales going on,” he said. “But Kiwi has good properties that are soundly managed, with a respected track record. The offer’s a good one.” 

In the past month, milk processor Synlait and property investor DNZ property Group have withdrawn their proposals to sell shares for the first time, while BioVittoria delayed the close date on its offer. 

Shares of Kiwi Income were unchanged at $1.02 today and are up about 2% in the past 12 months.

Businesswire