KPG - Kiwi Property Group

[Dolcile]

Hey Basil, where can I buy this for 93cents? I'm assuming that's what you paid.

[lorraina]

Last
Change
Buy
Sell
Open
High
Low
VWAP
Volume
Turnover
$0.925
0*  0%   
$0.925
$0.930
$0.930
$0.930
$0.925
$0.929
68,019
$63,176
Buyers
Buy Quantity
Prices
3   35,838   $0.925
7   55,934   $0.920
8   33,238   $0.915
8   29,141   $0.910
2   20,524   $0.905
5   2,512   $0.900
5   201,150   $0.890
2   5,800   $0.885
4   150,683   $0.880
2   65   $0.870
46   534,885   
Prices
Sell Quantity
Sellers
$0.930   15,567   3
$0.935   3   1
$0.945   17,046   3
$0.950   14,500   2
$0.955   32,930   1
$0.960   540   1
$0.975   30,000   1
$0.980   70,000   1
$0.995   3,318   1
$1.000   12,543   2
196,447   16

[Shareguy]

KPG has guided to a FY27 DPS of 5.75cps which KPG expect to be at the upper end of its 90%-100% AFFO payout range. Yes I think it's been good buying and have been adding. They don't have a good track record though of EPS growth. Hopefully Drury will be a gold mine for them. Might be time for them to consider a buy back?

[Basil]

Might be time for them to consider a buy back?

LOL I'm not so sure mate.  93 cents isn't all that far away from NTA of $1.12.
I'll be asking the board of ARG about a buyback at next weeks annual meeting though.  Share price of about $1.06 and NTA at $1.60 gives an immediate NTA return on capital invested of 51% for shares bought back.

[Basil]

Hey Basil, where can I buy this for 93cents? I'm assuming that's what you paid.

Yes mate, that is almost exactly my average entry price.  Technically this is incorrect, but I treat these as a quasi bond and with their PIE structure they're returning me an effective, equivalent 9.25% gross yield.  (6.2% net / 0.67 = 9.25% gross equivalent yield for a 33% taxpayer).

[Dolcile]

Thanks Basil.  I also view these REITs as a quasi bond, I can't bring myself to make any meaningful allocation to real bonds. The rates are too low and the tax is too high!

In terms of REITs, my preferred approach is not to by any particular company (such as KPG) but to buy the entire sector via the Kernel Commercial Property Fund. 

[Basil]

I also view these REITs as a quasi bond, I can't bring myself to make any meaningful allocation to real bonds. The rates are too low and the tax is too high!

I hear you mate !  I haven't got any exposure at all for those two reasons.  By the time you take tax out of the low bond returns its simply not plausible that you have any chance of beating inflation over time with bonds.  Even matching inflation after tax is a challenge !

The classic 60/40 share / bond portfolio allocation model, (Jim Cramer reckons 50 / 50 for people over 60 years of age), has very little appeal to me but 40% in quasi bonds like REIT's and utilities such as GNE makes sense to me.  I'm currently only 24% in quasi bonds which feels too low to me now.  I took 20% portfolio chips off the table during the war and went to 20% cash during the heightened geopolitical period but now face the dilemma of when and where to invest that and what percentage of cash to retain.  I suppose its a good problem to have.

With Netanyahu, Trump, the Iranians, the Houitts and Hezzbollah involved as well as enriched Uranium...what could possibly go wrong with the memorandum of understanding lol.  When can you be sure the geopolitical situation is more settled ?  That's a rhetorical question obviously, a bit like asking how long is a piece of string ?  Anyway...stocks like GNE and KPG probably reasonably good to gradually accumulate at these prices and maybe some more of my other favorite stocks as hopefully things gradually continue to settle down.

[winner (n)]

Nz 10 Govt yield down 40bps in last month .....hasnt flowed through to ARG or KPG share prices yet