The $1.2 billion landlord and developer Kiwi Income Property Trust has given its manager - Kiwi Income Properties - a $1 million-plus pay rise.
"But don't go on a witch hunt," said Angus McNaughton, chief executive of the trust's Commonwealth Bank of Australia-owned manager. "The manager has performed well and
we've just had the strongest year since the trust was set up."
The trust's annual report, due to arrive in unitholders' hands today, shows the manager was paid $8,056,000 in the March year, up on last year's $6,716,000.
The fees are based on the gross value of assets under management.
Kiwi's portfolio has expanded in the last year, breaking the $1 billion barrier.
The manager charged 0.85 per cent of the average gross value of the trust fund up to $750 million, plus 0.65 per cent after that.
But in response to criticism of its charges, the manager lowered its base fee to 0.55 per cent of the average gross value of the trust fund, plus a performance fee.
McNaughton promised lower fees next year but emphasised that the $8 million paid to the manager had to cover increased costs including more payments to staff and a larger portfolio of properties.
The pay rise comes at a time when the manager is locked in a struggle with some of the trust's institutional investors, angered by Kiwi's $538 million development punt at Sylvia Park without a joint-venture partner and last year's purchase of a cornerstone holding in rival landlord Capital Properties of Wellington.
Exactly how much the manager pays McNaughton or any other powerful Kiwi executives remains a secret, declared only in the manager's accounts and not in the trust's public document.
The annual report also shows a new aerial perspective of how Sylvia Park will look on completion. The buildings are digitally projected into the existing surrounding landscape.
McNaughton said the trust was in discussions with institutional investors who were unhappy with the forecast initial 7 per cent projected yield from Sylvia Park.
"They're disappointed in the yield and the fact we didn't get a joint-venture partner, but we're having constructive dialogue which has resolved a lot of concerns."
