Strong economy flows through to Kiwi Income

The trust made a profit of $21.22 million for the six months ended September, up from $16.31 million last year. Total revenue jumped to $36. 24 million from $25.83 million previously.

KIP says trading conditions during the first half of the financial year proved to be sound and were sustained by a stronger economy and higher consumer and business confidence.

"From the provincial economy, which was exceptionally optimistic, income flowed into the cities, creating fairly stable and positive conditions," the trust says.

"Following the tragic events of September 11th, consumer and business confidence has fallen steeply, but so far without any discernible impact on retail activity in the regions. In Auckland, a more immediate impact has been felt and the level of interest in commercial leasing has slowed significantly."

Retail sales in the trust's four shopping centres are reported to be have been very strong throughout the period, including September, and net income from the retail portfolio was up by 17% over the period.

This was primarily as a result of the increase in rental income from the expansion and redevelopment of Centre Place in Hamilton last year.

"Kmart has confirmed its intention to stay in New Zealand, and reinforced its position as an anchor tenant within Plaza Palmerston North and North City in Porirua," the trust says.

The trust's commercial portfolio has also continued to improve and the vacancy rate has dropped to 3.7% from 5.2% at the end of March.

"The Wellington office market remains very strong. The Christchurch CBD has experienced continued demand for A grade space, with a vacancy rate of less than 5% in quality buildings."

An interim dividend of 5.46 cents per unit has been approved, slightly above last year's interim payout of 5.2 cents per unit.

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