Kiwi Property Group half-year result: 218% turnaround, loss becomes profit

The opening ceremony of the Resido apartment complex in Mt Wellington. From left, Hauauru Rawiri of Ngati Paoa, Housing Minister Chris Bishop, PM Christopher Luxon, Clive Mackenzie and Simon Shakesheff from Kiwi Property. Photo / Jason Oxenham

New Zealand’s largest build-to-rent apartment owner has converted a previous $36.5 million interim loss into a $43.2m half-year profit.

That’s a 218% turnaround for Kiwi Property Group after $81m devaluations previously became $9.5m gains and revenue rose 9% to $126.4m.

Kiwi said its properties including Auckland’s Sylvia Park mall were valued at $3.3 billion and announced its result for the six months to September 30, 2024.

A loss became a profit, with Kiwi citing rental growth and more income.

In an upbeat presentation, Kiwi said its $200m Resido build to rent apartments at Mt Wellington were 50% leased with 148 places rented.

Resido towers. Photo / Jason Oxenham

“We are well positioned to meet our 12 to 18 month lease-up target,” an investor presentation said, noting residents’ average age was 34, 48% had incomes above Auckland’s average and 31% of them had a pet because allowing animals is part of Resido’s draw.

Kiwi’s new town centre in south Auckland at Drury East was progressing with earthworks now completed. Kiwi plans to “execute the sell down at Drury of large format retail sites”, in the first stage of what is anticipated with other neighbouring developments to be a new town centre equivalent to the size of Napier.

As one of the largest listed property companies on the stock exchange, the business said today’s result had reinforced its conviction about its strategy, focused on curating and creating retail-led mixed-use properties.

That was building momentum as challenging recent macroeconomic conditions started to ease, it said.

Eye-catching common area outside the three-tower Resido apartments, opened by Prime Minister Christopher Luxon. Photo / Jason Oxenham

On June 11, Prime Minister Christopher Luxon and Housing Minister Chris Bishop opened the 295-unit Resido apartments beside Sylvia Park.

Back then, Kiwi had rented only 17% of the complex and was gauging occupancy before it committed to developing apartments at its New Lynn shopping centre LynnMall.

Resido apartments started at $625/week for a 43sq studio, up to $1235/week for a 111sq m three-bedroom two-bathroom unit.

Kiwi Property Group CEO Clive Mackenzie speaks at the opening ceremony of the Resido apartment complex in Mt Wellington. Photo / Jason Oxenham

Today, Kiwi chairman Simon Shakesheff described the half-year result as pleasing, given the current economic environment.

“The resilience of Kiwi Property’s assets is demonstrated through solid net rental income growth of 7% for the half-year”.

Chief executive Clive Mackenzie said the results gave the company more confidence in its strategy.

“Importantly, as the interest rate cycle begins to unwind and lift downward pressure, we are also seeing a stabilisation of Kiwi Property asset valuations that is reflected in the 1H25 results.”

It booked a fair value gain of 0.3% from March 31 and net tangible assets were stable at $1.17 per share.

This month, the company bought into Mackersy Property via a $6.5m convertible loan.

On conversion, Kiwi’s investment will result in a 50% shareholding.

Mackersy has more than $2b property under management, specialising in finding, funding and managing properties for wholesale investors across New Zealand.

Kiwi’s gearing is 38% which is below the 50% gearing (debt to equity) ratio covenant. A ratio below 50% is generally not regarded as cause for concern.

The company plans to sell land and a finished building to Ikea in that Scandinavian retailer’s debut to New Zealand beside Sylvia Park.

It said Sylvia Park had proven to be the best proof of the Kiwi Property retail-led mixed-use strategy.

That strategy highlighted benefits of taking a long-term approach, starting with strategic land holdings near transport and population growth nodes, and adding quality retail, residential, office, and amenities to the community, the company said today.

Drury East was expected to have transport connections with the new Drury central train station next year, and residential and big-box retail to help catalyse the growth of the community, the company said.

In May, Kiwi said it planned to sell its Vero Centre to a Hong Kong business for $458m but the deal never went ahead.

Kiwi shares have been trading around 96c lately, up 14% annually.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.