Kiwi Income manager mulls Commonwealth Bank proposal to internalise contract

The manager of Kiwi Income Property Trust says it has received a proposal from ultimate parent Commonwealth Bank of Australia to internalise its management contract.

Kiwi Income Properties Ltd is a unit of Australia's Colonial First State Property, which is in turn owned by the Australian lender. The manager reaped a $3 million performance fee from Kiwi Income Property Trust last year.

The manager has hired First NZ Capital as adviser and formed a sub-committee of independent directors to consider the proposal. The committee is seeking further information from the bank over what it called "a non-binding, indicative, incomplete and conditional proposal."

The trust's property portfolio includes Auckland's Sylvia Park Shopping Centre. If it internalises the management contract it would join a growing number of listed property investors that have sought to slash costs by bringing the role in-house.

In 2011, Argosy Property Trust spent $21.6 million internalising its management contract, which had been held by ANZ Bank's OnePath unit. The bank turned down an opportunity to do the same with Vital Healthcare, selling that contract to a Canadian firm.

Kiwi Income Property Trust units were last unchanged at $1.125 and have declined 2 percent this year.

BusinessDesk.co.nz

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Related News:

Kiwi Income Property Trust
Kiwi Income sells Queen St building to Australian firm
Kiwi Income Property may need to sell assets or raise equity to exit management contract
Kiwi Income manager stays mum on internalisation proposal, sees retail, Auckland office improving
Kiwi Income Property sees smaller payout in 2014 as annual earnings fall 15 percent
Kiwi Income Property first-half pretax earnings fall 16 percent
Wellington's commercial property market to remain subdued: KIP
Kiwi Income Property Trust
Write-downs hurt Kiwi Income Property Trust but 1H distributable profit rose 9.1%
Daily ShareChat: Kiwi Income Property Trust