Kiwi Income's shares slide on Sylvia Park news 

Shares in Kiwi Income Property Trust slumped 5c this morning as institutional investors quit them on concerns over its Sylvia Park property venture.

Shortly after 10am, shares in Kiwi were down 5c at 113, on turnover of $19.9 million. The 17.1 million shares that changed hands equated to 2.4 per cent of Kiwi's issued equities.

The share price fall comes after Kiwi yesterday said it would open a funding offer to raise $143m for its $538m Sylvia Park development in Auckland.

On Tuesday next week, it will go to the market with a mandatory convertible notes offer to raise the money for the first stage of the park, where Multiplex Constructions (NZ) is putting up a large shopping centre.

The deal has angered some unitholders, including powerful institutional investors, who believe it may be too risky.

Hamilton Hindin Greene broker James Smalley said the volume in Kiwi today was likely a risk element being factored into the shares.

Large bundles of the shares were being crossed, including 11.4 million by First New Zealand Capital before the market opened. JB Were crossed 2.4 million of the shares.

"Kiwi Income Property Trust was set up to be a low risk property investor, and maybe there's a few long term investors...that are concerned about the shift into property development," Mr Smalley told NZPA.

"This is a pretty good price from where they (the shares) were a year ago and they (institutions) have decided to take some profits and reduce their exposure to the stock.

"However, a number of institutions are taking opposing views, some are wanting to buy the stock, some are wanting to sell."

Forstyth Barr analyst Jeremy Simpson said Kiwi's limited foray into property development had caused some concern.

"Since they've announced they're going to take all that Sylvia Park development on board themselves, which was a bit of a surprise to the market, there is more development risk (attached to the stock)," he said.

"Today, maybe you've got some people buying back in (at a lower level) than (they) sold yesterday...but also some people selling and looking to switch into the notes."

Meanwhile, Kiwi's new financing offer will be lead-managed by Goldman Sachs JB Were and will close on July 1.

The $143m must stay with Kiwi until June 2010, when the notes will convert to Kiwi units.

The note offer is in two tranches -- a primary offer of $110m and an entitlement offer of up to $33m. The entitlement offer is for a renounceable rights issue of one note for every 23 ordinary units held already.

The investment will be fixed for five years at 8 per cent or the applicable five-year swap rate, plus a 1.3 per cent margin.

NZX today granted Kiwi and its manager a waiver from listing rules so it is not required to extend the offer to overseas unit holders.

The offer investment statement and prospectus will be unavailable until next week.

- NZPA