By Chris Hutching
Friday 14th June 2002 |
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The money will fund an $80 million expansion that will double the size of Northlands Shopping Centre in the northwest Christchurch suburb of Papanui by early 2004.
But a local analyst questioned whether the redevelopment plans are based on natural growth of the Northlands catchment or are a defensive move to retain national and local retailers who are being wooed by competing redevelopments in Christchurch.
For example, The Palms in Shirley is undergoing a $50 million expansion that will include an investment in new movie theatres by Reading Entertainment. Eastgate in Linwood, owned by listed National Property Trust, is also undergoing a similar expansion and will launch a major marketing drive later this month. Meanwhile, Westfield has announced plans for a $100 million expansion at Riccarton.
The proposals by KIPT and Westfield at Northlands and Riccarton are ambitious, with plans for over 100 specialty shops - a commitment some retail specialists believe may be difficult to deliver even though Canterbury is one of the regions leading a consumer splurge. Retail sales nationally during April were much stronger than economists had predicted.
KIPT told retailers at Northlands about the plans a few weeks ago in a move that competitors believe may have been designed to discourage movement to other shopping centres.
But KIPT shareholders will be able to judge for themselves the rigour of the company's market research when they receive details about the rights issue soon. The underwritten issue will offer one new unit at 82c for every six held. The shares have been trading steadily at around $1 in recent months.
KIPT last week posted an after-tax profit of $43.3 million ($35 million last year) on revenue of $72 million ($53 million) in the year to March 2002. The lift in revenue is attributable to the new 95%-leased 38-level Royal & SunAlliance Centre in Auckland, refurbishment of Hamilton's Centre Place retail centre and improved leasing at the PricewaterhouseCoopers Centre 24-level office tower in Christchurch. Property revaluations lifted the result by $1.7 million.
KIPT also confirmed its proposed $300 million Sylvia Park retail and office development in Mt Wellington in Auckland would be funded via the Colonial Group, which recently bought the management contract for KIPT for $57 million, according to Overseas Investment Commission information.
The total dividend for the year was 9.99c (10.54c last year).
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