Northlands owner shows $18m net gain
Commercial property company Kiwi Income Property Trust has reported a net increase of $17.8 million in the value of its $2.1 billion portfolio of shopping centres and office buildings.
The stock-exchange listed company has assets including Northland Shopping Centre in Christchurch.
The valuations will be confirmed in the trust's financial results for the year to be announced on May 20.
Chairman Mark Ford said strong investor demand for prime Auckland assets had been a continuing trend.
All of its Auckland assets increased in value, with Sylvia Park Shopping Centre, Vero Centre and ASB North Wharf collectively delivering revaluation gains of $55.6m.
Sylvia Park increased in value by $21.8m to $564m.
However, the value of the trust's retail portfolio decreased $4.5m to $1.4b because of allowances made in valuations for earthquake strengthening and remedial work at three shopping centres, and a lower than anticipated valuation of Centre Place Shopping Centre in Hamilton. The value of Centre Place, at $122.5m, resulted in a $13.6m or 10 per cent loss.
In Christchurch, the value of Northlands reduced by $9m or 4.2 per cent with updated provisions for earthquake remedial works that are the subject of an insurance claim.
The value of North City Shopping Centre in Porirua reduced by $4m or 4 per cent largely as a result of a capital expenditure allowance made in the valuation for seismic strengthening to parts of the centre. The value of its LynnMall Shopping Centre in Auckland and The Plaza Shopping Centre in Palmerston North, remained essentially unchanged at $206m and $196m respectively.
The office portfolio increased in value by $19.7m or 3 per cent driven predominantly by an improving Auckland office market. Vero Centre in Auckland increased in value by $24.9m (9.1 per cent). The ASB North Wharf also firmed by $8.8m or 5.8 per cent to $162.2m. Vacancies at 205 Queen St reduced from 22.5 per cent in September to 9.2 per cent. This led to a $5.6m or 11 per cent increase in value for the trust's remaining 50 per cent.
In November, the trust announced a new 18-year government lease commitment at Unisys House in Wellington, as part of a comprehensive $67m refurbishment of the 45-year-old office complex. In recognition of the impending departure of existing tenants and the development works, the value of the building has been adjusted downwards by $15.3m or 22.3 per cent to $53.4m
Following redevelopment, and on commencement of the government's new lease in August 2016, it is projected the building's value will be about $120.5m. The building will become the Ministry of Social Development's new head office. The overall value of the office portfolio now stands at $674.6m.