Ann: GENERAL: KPG: Property portfolio value rises 7% to $2.7 billion

• Release Date: 01/04/16 09:18
• Summary: GENERAL: KPG: Property portfolio value rises 7% to $2.7 billion
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					KPG
01/04/2016 09:18
GENERAL
PRICE SENSITIVE
REL: 0918 HRS Kiwi Property Group Limited

GENERAL: KPG: Property portfolio value rises 7% to $2.7 billion

Kiwi Property today confirmed a net increase of $179 million (+7%) in the
value of its retail and office property portfolio for the year ended 31 March
2016, lifting the overall value of the portfolio to a record value of $2.7
billion.

Chief Executive, Chris Gudgeon, said: "This strong revaluation outcome
reflects the quality of our portfolio and our intensive asset management
approach to driving income and investment performance. Our value uplift also
reflects strong investor demand for property, from both domestic and offshore
investors, underpinned by economic growth and low interest rates."

"Firming capitalisation rates have been a common factor, driving
approximately half of the value growth across our portfolio.  Our development
projects have also added value as have successful leasing outcomes, positive
retail sales growth and high occupancy rates." said Mr Gudgeon.

The weighted average capitalisation rate for the portfolio firmed 31 basis
points to 6.61% and the independent valuations indicate that the overall
portfolio rental rates are at market.  As a result of the strong uplift in
asset values, the net tangible asset backing per share is expected to
increase by approximately 14 cents per share.

The March 2016 property valuations were determined by independent valuers.
These will be confirmed in the Company's audited financial results for the
year to 31 March 2016, to be announced on 16 May 2016.

RETAIL PORTFOLIO VALUATION INCREASES 7%
The value of the retail portfolio increased $114 million (7%), with the
weighted average capitalisation rate firming 28 basis points to 6.69%.

Sylvia Park set another record valuation, rising 11% to $704.0 million (after
allowances for costs to complete on current development works), assisted by
securing New Zealand's first retail stores for international fashion giants
Zara and H&M at that centre.  Sylvia Park's capitalisation rate compressed by
25 basis points to 6.00%, the firmest rate of any regional shopping centre in
New Zealand.

At North City in Porirua, our acquisition of the freehold interest in the
land, previously leased from council, together with positive sales growth and
leasing activity, led to its value increasing by 10% to $109.5 million.

Positive movements were also recorded at Northlands (+9%), LynnMall (+6%),
Sylvia Park Lifestyle (+3%), The Plaza (+2%) and the newly acquired Westgate
Lifestyle (+2%).

Centre Place North recorded a 5% decline in its value to $65.5 million, with
positive recent retail sales growth not yet sufficient to offset a more
moderate outlook for rental growth.

OFFICE PORTFOLIO VALUATION INCREASES 8%
All assets in the office portfolio recorded positive valuation movements,
with the portfolio value increasing $61 million (+8%) to $819 million. The
weighted average capitalisation rate firmed 36 basis points to 6.44% - the
lowest rate on record for the office portfolio.

Auckland assets provided a value gain of $40 million, benefitting from
positive office market fundamentals and investor sentiment, while Wellington
assets increased in value by $21 million as development projects near
completion and the commencement of new long-term government leases becomes
imminent.

Auckland's pre-eminent landmark office tower, Vero Centre, increased in value
by 9% to $358.0 million.  Contributing factors included a high existing
tenant retention rate, with new long-term leases to key existing tenants
including Russell McVeagh.  Improving rents and the weight of international
capital searching for premium Auckland assets contributed to a firming of the
capitalisation rate for the Vero Centre to 6.125% (from 6.50%).  The firmest
office asset capitalisation rate was achieved at ASB North Wharf, which
firmed to 6.05% (from 6.50%) with its value increasing by 6% to $187.8
million.

Across the remaining office assets, the benefits of development projects were
seen at 44 The Terrace (+15% to $35.5 million), 56 The Terrace, now named The
Aurora Centre, (+11% to $125.9 million) and The Majestic Centre (+3% to
$112.3 million.

VALUATION SUMMARY
The valuation summary as at 31 March 2016 has been provided to NZX.

> Ends

Contact us for further information

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

Gavin Parker
Chief Operating Officer
[email protected]
+64 9 359 4012
mobile +64 21 777 055

Stuart Tabuteau
Chief Financial Officer
[email protected]
+64 9 359 4025
mobile +64 21 912 247

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

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 $2.7 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:00280160 For:KPG    Type:GENERAL    Time:2016-04-01 09:18:42