Ann: GENERAL: KPG: Discretionary spending drives retail sales growth

• Release Date: 27/01/16 10:27
• Summary: GENERAL: KPG: Discretionary spending drives retail sales growth
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					KPG
27/01/2016 10:27
GENERAL
NOT PRICE SENSITIVE
REL: 1027 HRS Kiwi Property Group Limited

GENERAL: KPG: Discretionary spending drives retail sales growth

New Zealand shoppers relaxed their purse strings in 2015, indulging on
blockbuster movies, holidays, telecommunications, personal grooming, food,
home electronics and fashion.

Kiwi Property Chief Executive, Chris Gudgeon, said: "After several years of
spending restraint, New Zealand consumers enjoyed themselves, as evidenced by
a pick-up in discretionary spending over the course of 2015, capped off by a
very solid month for retail sales in December."

"Economists forecast that consumer spending would show robust growth in 2015,
buoyed by improving household incomes, low mortgage rates, strong house
prices and net migration - and we were certainly pleased to see that forecast
realised."

Analysing retail sales data on a like-for-like basis across Kiwi Property's
six New Zealand shopping centres, the big category winners of 2015 were
cinema operators, with sales surging 9.6%, along with commercial services
(most notably travel and telecommunications) up 9.4%, pharmacy and cosmetics
up 6.8%, personal services up 5.1% and fashion, a subdued performer in
previous years, showing growth of 1.6%.

"While the year was undoubtedly a stronger year for many retailers, the
standout month for retail sales came in December; this was a Christmas our
retailers could celebrate," Mr Gudgeon said.

Kiwi Property's total portfolio sales were up by 5.3% in December compared to
the same month in 2014 for its centres in Auckland, Hamilton, Palmerston
North, Wellington and Christchurch (3.8% on a like-for-like basis).

"What we have seen over the past year - and even more pronounced during the
Christmas period - is consumers approaching their discretionary spend with
less caution than we have seen in recent years," Mr Gudgeon said.

On a like-for-like basis, sales for the year to 31 December 2015 across Kiwi
Property's retail centres, which include LynnMall and Sylvia Park in
Auckland, showed:

> department stores were up 6.0% for the year, driven predominantly by double
digit growth from Kmart, where shoppers responded positively to its store
upgrade and merchandise rationalisation programme

> cinemas were up 9.6% for the year, helped along by cinematic bonanzas such
as Star Wars and Spectre, while food was up 3.5%, in step with the increasing
importance of dining and entertainment in an overall shopping centre
experience, and

> overall, specialty retail sales were up 2.7% for the year.

"The real emerging opportunity - and it has been on our agenda for some years
now - is the potential for shopping malls to be a social enabler," Mr Gudgeon
said.

"We are continually refining our retail mix, with our emphasis in recent
years on providing our shoppers with greater diversity of food - including
both indoor and outdoor dining options - as well as improving the
availability of leisure and entertainment facilities."

In November last year, Kiwi Property launched the $39 million redevelopment
of LynnMall, opening its successful 'The Brickworks' outdoor dining lane and
a new cinema precinct, returning cinemas to New Lynn after an 15-year
absence.

"Projects like this help to redefine the way communities meet and socialise,
and we've been impressed by the success of this project as our West Auckland
shoppers enjoy an urban dining experience they may have previously had to
come into the city for," Mr Gudgeon said.

Just one month after opening, LynnMall sales growth of 11.9% was recorded for
December 2015 compared to the same month in the prior year.  Similarly,
Centre Place, which Kiwi Property redeveloped in 2013 to add an outdoor
dining lane, improved retail mix and refreshed cinema offer, grew 14.3% in
the December period.

Mr Gudgeon said the New Zealand economy had entered 2016 with positive
momentum in terms of consumer spending, and expected retail sales to trend in
line with nominal GDP growth over the course of the year.

> Ends

Contact us for further information: Investors

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

Mathew Chandler
Investor Relations and Communications Manager
[email protected]
+61 458 110 042
direct +61 2 9519 5850

Contact us for further information: Media

Louise Wright
Executive Director
Porter Novelli
[email protected]
+64 9 361 2911
mobile +64 21 840313

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 $2.39 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.  Kiwi Property is licensed under
the Real Estate Agents Act 2008.  To find out more, visit our website
kp.co.nz
End CA:00276864 For:KPG    Type:GENERAL    Time:2016-01-27 10:27:30