7000 products, including their famous meatballs, IKEA plans to open a megastore in Auckland.
Kiwi Property Group is enjoying rising profits and larger dividend payouts while advancing plans for a Drury town centre for 60,000 people.
But the large listed landlord is yet to conclude the sale of 3.2ha land at Sylvia Park to Swedish homeware giant Ikea.
The company, which boasts $3.6b ofassets, announced its full-year result for the March 31 year, making 14 per cent more than last year in net after-tax profit.
Kiwi has so far only reached a conditional agreement to sell the site across the railway line from the Sylvia Park mall at the back of Farmers. Ikea agreed to buy, subject to Overseas Investment Office approval.
That state entity's site shows no application processed yet from owner Inga Ikea and a Kiwi spokesman said today: "We've reached a conditional agreement with Ikea to sell the retailer 3.2 hectares of land."
A new image in the investor presentation out with the result showed Ikea's blue store with distinctive yellow signage on the Mt Wellington site. A car park and landscaping featured out the front.
The Ikea sale was listed under "intensifying mixed-use assets: transforming Sylvia Park".
Toitū Te Whenua Land Information NZ confirmed it had received an overseas investment application from Ikea New Zealand to buy the land but didn't go on to say if that was approved yet or when it would be.
"We release decision summaries on our website the month after decisions are made, with this decision summary expected to be released on May 31," a spokesperson said.
Asked about the status of the Ikea deal after the results, chief executive Clive Mackenzie said: "It's still conditional. We're just working through a number of items like OIO and resource consent and we're making great progress. We're applying jointly to Auckland Council. OIO is for them."
Resource consent was a "work in progress but all's going well."
The large format retail centre to be built beside it would be complimentary to Ikea.
Carpark numbers there had not been decided.
Kiwi Property Group chief executive Clive Mackenzie. Photo / Dean Purcell
Kiwi has many property projects planned or progressing.
"Kiwi Property's current pipeline of development opportunities is one of the most exciting in the company's history," Mackenzie said.
Dividend payout is up 9 per cent annually and shareholders were told that it would rise yet again, from the latest 5.6cps to 5.7cps.
On the share price, Mackenzie said the whole sector was down "and we're in the middle of the pack of terms of property companies. We're not happy. We'd like to see our company correctly valued but it is where it is in the market right now."
At Drury further south in Auckland, Kiwi is progressing plans for a new town centre where around 60,000 people might live in the next quarter-century. The company got its private plan change approved by independent hearing commissioners for its 53ha greenfields site near the motorway.
That is to be a transit-oriented development with shops, offices and residential and near the new Drury Central Train Station, scheduled to open in 2025.
Auckland Council issued an earthworks consent so digging is now underway, with the construction of the first homes and large format shops possibly starting early next year, pending funding.
Mackenzie said Drury could be a transformative project for the business.
"Kiwi Property's strategy centers on the creation of connected mixed-use communities in key growth nodes. Drury will be the location of the third Auckland Metropolitan Centre in our portfolio, alongside Sylvia Park and New Lynn, offering an exciting range of future possibilities. The development is expected to unlock thousands of houses and new jobs, and generate significant value for the company for years to come," he said.
Tenants aren't getting such generous pandemic rent abatements: $19.5m in 2021 dropped to $17m in the March 31, 2022 year. Alert level 3 and 4 restrictions prevented Auckland retail centres from trading for about 12 weeks and at Hamilton centres for seven weeks.
"The overall result is really strong, we're very happy with how we've grown income and profit and values," Mackenzie said.
Kiwi is in Auckland (85 per cent) Hamilton (7 per cent) and Wellington (8 per cent).
"We still own Northlands at Papanui but that's up for sale currently," Mackenzie said of that property valued previously at around $170m.
"We're working through the process of sale at the moment. We'll come back to the market with an announcement in due course. We're positive," he said of the Christchurch deal.
"The reason we're getting the capital is we have a really exciting pipeline of opportunities, in Auckland, particularly around Drury and obviously our build to rent at Lynnmall and Sylvia Park."
Sylvia Park precinct's net rent income rose from $54.4m previously to $60.4m after Kiwi opened many new shops on a level one addition.
Lynnmall rent rose from $17.2m to $17.3m and The Base in Hamilton from $11.8m to $12.4m.
Shortland St's Vero Centre produced $23.5m rent, up from $22.7m and all up, rent income rose from $173.6m to $187.1. ASB North Wharf rent was only up $400,000 to $13.5m.
"From Vero in our offices, we're 70 to 80 per cent back. There'll always be elements of flexible or remote working but there's a need to return to the office to build culture. We're very positive around the office," he said, referring to Kiwi building new offices at Sylvia Park.
The annual report showed Mackenzie's pay went from $1.41m last year to $1.5m in the latest year.
Shareholders will get a final cash dividend of 2.85cps for the six months to March 31, up from the 2.75 cps interim dividend.
The payment is on June 22.
The total cash dividend for the year is 5.60cps, up 8.7 per cent on the 5.15cps paid previously. The company is targeting a FY23 cash dividend of no less than 5.70cps
Shares traded up from $1.01 on Friday to around$1.04.
