The strength of the rental market was not enough to offset the volatile economic conditions, the company said. Photo: RNZ / Rebekah Parsons-King
Commercial property rental growth is strong despite current economic conditions which have seen the value of its diversified portfolio drop, Kiwi Property says.
The draft value of the company's mixed-use, office, retail and other properties fell nearly 6 percent or by $212.5 million to $3.4 billion in the six months ended September, from the period ended March.
Kiwi Property chief executive Clive Mackenzie said the drop in value was not unexpected given the high inflation, high interest rate environment.
"Kiwi Property's investment portfolio continues to perform well, with increases in occupancy, as well as passing and market rents, driving robust rental income growth."
However, the strength of the rental market was not enough to offset the volatile economic conditions, which saw capital valuations drop, he said.
"By actively managing our assets and tightly managing costs, we will help accelerate the resurgence of our asset values as the financial climate improves."
Kiwi Property's operating earnings were not affected by the draft valuation movement, and its cash dividend outlook is unchanged at not less than 5.70 cents per share.
The company said it would provide a full update on rental growth when it announces its half-year result next month.
