Kiwi Income Property Trust, the owner of Auckland's Sylvia Park Shopping Centre, reported a 15 per cent fall in annual earnings due to a drop in rental income and expects to pay a smaller return to investors in 2014.
Distributable earnings, the favoured profit measure for property investors which strips out unrealised movements in the value of the portfolio, fell to $61.2 million in the 12 months ended March 31 from $71.7 million a year earlier, the manager of the Auckland-based trust said in a statement. Net profit rose 23 per cent to $109.8 million as revenue declined 4.3 per cent to $198.7 million.
The fall in operating earnings came from the smaller revenue stream after the sale of Beca House in Auckland, higher interest costs and a bigger fee paid to the trust's manager, Kiwi Income Properties.
The manager, a unit of Australia's Colonial First State Property, reaped a $3 million performance fee in the year, having exceeded the "total return performance fee of 10 per cent per annum" in both halves.
"From an operational perspective, we have focused on enhancing the security of future rental income streams through an active leasing programme and by making solid progress on developments and projects underway at ASB North Wharf, Centre Place Shopping Centre, the Majestic Centre, and Northlands Shopping Centre," chief executive of the trust's manager Chris Gudgeon said.
