Ann: GENERAL: KPG: Property portfolio value rises to $2.28 billion

• Release Date: 01/04/15 08:47
• Summary: GENERAL: KPG: Property portfolio value rises to $2.28 billion
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					KPG
01/04/2015 08:47
GENERAL
PRICE SENSITIVE
REL: 0847 HRS Kiwi Property Group Limited

GENERAL: KPG: Property portfolio value rises to $2.28 billion

Kiwi Property today reported a net increase of $57 million (+2.6%) in the
value of its portfolio of shopping centres and office buildings for the year
ended 31 March 2015, lifting the overall value of the portfolio to $2.28
billion.

Chief Executive, Chris Gudgeon, said: "Kiwi Property's portfolio has
benefited from high occupancy rates from our leasing successes, stronger
retail sales at our key assets and a general strengthening in investment
market conditions, driven by a global reduction in interest rates and strong
interest from offshore investors in New Zealand property."

"We are pleased to report an overall lift in the value of the portfolio for
our shareholders. Common market factors driving value growth include firming
capitalisation rates due to strong investor demand, and a reduction in
insurance premiums," said Mr Gudgeon.

The weighted average capitalisation rate for the portfolio firmed 26 basis
points to 6.92% and the independent valuations indicate that, overall,
portfolio rental rates are at market.

The March 2015 property valuations were determined by independent valuers.
These will be confirmed in the Company's audited financial results for the
year to 31 March 2015, to be announced on 18 May 2015.

RETAIL PORTFOLIO VALUATION
The value of the retail portfolio increased $57 million (+3.9%) to $1.53
billion.  The weighted average capitalisation rate has firmed 18 basis points
to 6.97%.

Sylvia Park Shopping Centre, the flagship asset and outstanding performer in
the Company's portfolio, increased in value by $30 million (+5.2%) to $601
million, reflecting improving rentals following strong sales growth of over
5% in the past year. The asset's capitalisation rate firmed to 6.25%,
consistent with the centre's strong trading history as well as its income
growth and redevelopment potential.  The growth in value of this asset over
the past three years has been an impressive $88 million.

Apex Mega Centre has been recorded at the independent valuation undertaken at
the time of its acquisition in December 2014.

Other positive valuations were recorded for Northlands (+7.0%), The Plaza
(+5.0%), LynnMall (+4.8%)[Note 1] and North City (+0.8%).  A valuation
decrease was recorded at Centre Place (-6.6%) due to seismic remediation
capex completed in the period, combined with a more moderate outlook for
market rental growth.

NOTE 1: The valuation methodology for LynnMall has changed since last year
following receipt of board approval for the $36 million redevelopment project
currently underway.  The independent valuer has assessed the centre's 'as if
complete' value and made deductions for costs to complete the redevelopment
and associated profit and risk to determine the current fair value.

OFFICE PORTFOLIO VALUATION
The value of the office portfolio declined marginally by $4 million (-0.6%)
to $673 million.  The weighted average capitalisation rate for office assets
firmed 43 basis points to 6.80%.

Auckland office buildings provided a value gain of $33 million, reflecting
investor demand, low vacancy rates and prospects for rental growth.  Positive
valuations were recorded at Vero Centre (+7.4%) and ASB North Wharf (+6.5%).
Over the past three years these assets have provided a combined revaluation
gain of $78 million.

Wellington office assets reduced in value by $37 million due primarily to the
$29.9 million cost increase for the seismic remediation project at The
Majestic Centre (-26.1%), as recognised in the September 2014 interim
results.  Other decreases were recorded for 56 The Terrace (-6.4%), due to a
forecast $4.8 million cost increase for the refurbishment project currently
underway, and 44 The Terrace (-14.0%), due to impending lease expiries.

VALUATION SUMMARY
The valuation summary as at 31 March 2015 has been provided to NZX.

ENDS

Contact us for further information

Chris Gudgeon
Chief Executive
Email [email protected]
DDI +64 9 359 4011
Mobile +64 21 855 907

Mathew Chandler
Investor Relations and Communications Manager
Email [email protected]
DDI +61 2 4377 1590
Mobile +61 458 110 042

ABOUT US
Kiwi Property (NZX: KPG) is the largest listed property company on the New
Zealand Stock Exchange and is a member of the NZX15 Index.  We've been around
for more than 20 years and we proudly own and manage a $2.28 billion
portfolio of real estate, comprising some of New Zealand's best shopping
centres and prime office buildings.   Our objective is to provide investors
with a reliable investment in New Zealand property by targeting superior
risk-adjusted returns over time through the ownership and active management
of a diversified, high-quality portfolio.  To find out more, visit our
website kp.co.nz
End CA:00262581 For:KPG    Type:GENERAL    Time:2015-04-01 08:47:36