KPG - Kiwi Property Group

[BlackPeter]

From Morningstar data a $1,000 invested in KPG in mid 2014 is now worth $93.67 .....that's TSR with all dividends reinvested.

Not much of an invested ......and that's not inflation adjusted

Are you sure, you got the decimal point in the right place? Sometimes small things can make big differences ;

[winner (n)]

Are you sure, you got the decimal point in the right place? Sometimes small things can make big differences ;

decimal point in right place ...just too many 0s and an unnecessary comma

$100 to $93.67

Thanks for correcting me

[Waltzing]

Just how much rstoration work is needed on DJOSER...

[Onemootpoint]

Kiwi Property turns Sylvia Park into '20 minute city'

https://www.stuff.co.nz/business/pro...20-minute-city

[Basil]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/413805/397286.pdf

Growth in dividends in the future.  Hmmm....I'll believe that when I see it.  In the meantime, the 9.5% gross yield for 33% taxpayers is probably as good a place to hide in this recession as most other places.

[Alekhine]

Good AGM today. I am pleased that I ask them about whether they benefit from the increased sales of their retailers, and not just from base rents- which it turns out that they do. The answer was that the contract includes:

1) Base rent
2) An annual Increase
3) A metric to benefit from increase sales

It does not seem to be something that they publicize.

They have had a rough run, having seen some real damage to shareholder returns, even if it was not entirely their fault ($250,000,000 spent on seismic strenghting of buildings, with zero return, as well as the Covid trend to move from offices to WFH).

It looks like they have some good long-term prospects, but I think it will be a few years until the economic climate truley changes and they see any significant increase to their share price.

[Waltzing]

YEEEeees...

SP last seen in 2001.... amazing...

[winner (n)]

YEEEeees...

SP last seen in 2001.... amazing...

You're kidding .....must be a losers stock if true

Great divie though

[Waltzing]

Oh !  ok shall we try and load the data then? havnt tried to load that many stock prices on an SP before..

are there enough rows? or will have to split the Query up into years..

great what?

[Basil]

Good AGM today. I am pleased that I ask them about whether they benefit from the increased sales of their retailers, and not just from base rents- which it turns out that they do. The answer was that the contract includes:

1) Base rent
2) An annual Increase
3) A metric to benefit from increase sales

It does not seem to be something that they publicize.

They have had a rough run, having seen some real damage to shareholder returns, even if it was not entirely their fault ($250,000,000 spent on seismic strenghting of buildings, with zero return, as well as the Covid trend to move from offices to WFH).

It looks like they have some good long-term prospects, but I think it will be a few years until the economic climate truley changes and they see any significant increase to their share price.

Welcome to the forum, an excellent first post.

[KW]

YEEEeees...

SP last seen in 2001.... amazing...

Actually Jan 2000 according to Google, and that's as far back as Google goes.  What on earth happened to it?

Not alone though, Argosy is at its 2004 share price.   Boy, you really dont invest in the NZX for capital growth do you?

[Waltzing]

Jeee ....  KW.... i dont think we are supposed to have noticed... does it say something about management and that they dont think anyone is noticing....

all those incentive packages... well havnt actually checked if they have them but they are probably there as think GMT has them..

think you will find that 2001 sept had a 88 or something. Havnt loaded the data tables with a date that far back....as i dont think its supported..

[BlackPeter]

Actually Jan 2000 according to Google, and that's as far back as Google goes.  What on earth happened to it?

Not alone though, Argosy is at its 2004 share price.   Boy, you really dont invest in the NZX for capital growth do you?

Well, actually - you do. The trick is to buy cyclicals at their respective lows (something like now) and sell them some years later before they lose too much of their cyclical gains.

Predicting the cycles of REITS, btw - is pretty easy: When interest rates are high, REITS are cheap. when interest rates are low, REITS are dear.

Amazing thing is - you don't even need to do a lot of TA. Just look into the newspaper to check what the RB does to the interest rates.

Discl: Currently buying REITS ;

[KW]

Well, actually - you do. The trick is to buy cyclicals at their respective lows (something like now) and sell them some years later before they lose too much of their cyclical gains.

Predicting the cycles of REITS, btw - is pretty easy: When interest rates are high, REITS are cheap. I interest rates are low, REITS are dear.

Amazing thing is - you don't even need to do a lot of TA. Just look into the newspaper to check what the RB does to the interest rates.

Discl: Currently buying REITS ;

Yup, I had a 5 year run of owning AREITs where I made 30% pa.  Those were the days 
I'm thinking of doing it again too, just to lock in a decent income stream at high yields.  Cap gains a bonus.

[Buzz]

Yup, I had a 5 year run of owning AREITs where I made 30% pa.  Those were the days 
I'm thinking of doing it again too, just to lock in a decent income stream at high yields.  Cap gains a bonus.

KPG has completely revised their strategic direction, which in plain english translates to a development profile that is ambitious and sets up a whole new revenue stream, in a different market ... think Drury, but it's still property.

Though it will take a few years to realise and expand, it is a growth strategy, this in itself is different for the company, and I think they have the nous and expertise to make it work. That's the gamble on growth that an investor in KPG has to factor into their assessment of them as a part of their portfolio.

They are also a very large property company with recurring revenues on an established long term asset base. With pricing power. This part is already known, and has returned decent dividends for investors for a long time, but has never been seriously re-rated by the market for the growth that it has achieved.

You might say KPG has always been a good buy for income, but has never realised significant capital gains on their share price. It may be some time, perhaps longer than those with short or even medium term horizons (even though handsomely rewarded in the meantime), that KPG finally is recognised for it's return on assets and capital value re-rated.

They have a lot of shares on issue as well, and I'd prefer that their ambition is not encumbered by further capital raises, which has been a factor in suppressing their share price. Growth funded by profit, great, even if it reduces the returns to shareholder on income.

In any event, whether a re-rate ever occurs or not, that's probably not the reason many investors have a position in the first place, it would just be an unrealisable bonus to have a re-rated SP as realising that by selling would of course cut-off the purpose of holding the stock for income.

Anyway, this is most certainly not and has never been an attractive capital traders stock, it is and can only be attractive to income investors. That might change but for the foreseeable future it most likely won't change and that's alright with me. I'm happy to park a sensible % of portfolio into KPG and at this time use the recently re-instated DRP to grow my holding.

If the time ever comes that the market re-rates, maybe then I'll consider whether the capital gains vastly exceed the earnings (like 'x' years earnings), at which time I might consider just quitting it and taking the capital gain and forego the earnings.

Honestly, KPG is the absolute least worry of my portfolio, it does what it's always done and one day, with the new strategy, it might present some incremental value that I had not expected when I bought it. Then and only then, I'll have to consider my position and make a decision whether to remain an investor, or not.

Focus on the SP is, at this point and in the past, folly, except getting a good entry or accumulation price, for the projected returns. It has never been a SP market play. It may be one day, but it's not now and has really never been. This belongs in your solid foundation income earner portion of a portfolio. Nothing more, nothing less.

Any other expectations lead to disappointment.