KEY POINTS:
Kiwi Income Property Trust says it may be facing the prospect of property devaluations in the future.
Chairman Sean Wareing told the trust's annual meeting today that the outlook for the trust, remained positive.
The trust's portfolio includes New Zealand's largest shopping centre at Auckland's Sylvia Park and the Vero Centre, Auckland's tallest office block.
Anticipated solid demand for high-quality office and retail space would result in high occupancy levels and rental growth across the trust's portfolio, said Wareing.
"The trust's defensive qualities will ensure that it is well placed to perform strongly in the more challenging environment we face with uncertainties in global financial markets and high interest rates.
"There is some evidence to suggest that property values around the world are coming under pressure and it is therefore possible that the trust may face asset devaluations in the future," he said.
"We expect that any downward movement in the trust's property values would be reasonably contained, given the quality of the trust's portfolio."
Any devaluation was not expected to adversely affect distributions to unit holders, although it would reduce the trust's net asset backing.
While cautious in the current economic environment, based upon the outlook for the trust, and subject to a continuation of reasonable economic conditions, a cash distribution for the year to the end of March 2009 of about 9 cents per unit was being projected.
For the year to the end of March 2008, the trust reported a distributable profit up 4.9 per cent to $62.1m, with a full year cash distribution of 9cpu.
The $123m net profit under new accounting rules was 51.7 per cent lower than the restated net profit under the 2007 financial year.
That was largely due to a net revaluation gain across the portfolio of $64.7m in the latest year, compared to a revaluation gain a year earlier of $226.2m, said Wareing.
At year end, the trust's total assets stood at $2.1b, an increase of $144.9m over the previous year, with bank debt of $571m.
- NZPA
