Can’t Buy A House; How About Investing In Property Shares-KPG, PLP, IPL?

Summary

  • An alternative to investing in your own property is investing in companies that purchase and lease property to productive parties.
  • Kiwi Property Group exposes investors to real estate within NZ’s commercial and retail sectors.
  • Investing in Investore Property provides exposure to the Company’s 43 large format retail assets leased to the most recognisable brands in the country.

The price of housing in New Zealand prohibits many Kiwis from owning or investing in New Zealand property.

This issue has got us thinking about alternatives that could provide investors exposure to the New Zealand property market without the excessive upfront deposit and million-dollar mortgage. Although, we of course understand there will be no substitute for the security provided by owning and living in your own home.

Source: © Artistashmita | Megapixl.com

The following three NZX-listed companies own property across New Zealand. Owning a piece of these companies is a relatively cheap alternative for investors to ‘get on the property ladder’.

READ MORE: Property values in NZ witness strong price growth in last 10 years

Kiwi property Group

Kiwi Property Group Limited (NZX:KPG) own and manage a mixed portfolio of real estate assets.

Source: © Hannamariah | Megapixl.com

The company owns $3.2 billion worth of NZ property across Auckland, Hamilton, Palmerston North, Wellington, and Christchurch. The property is leased to businesses from many different industries providing a diversified and robust client base. Property under the Company’s ownership include Sylvia park, Vero Centre, and Aurora Centre.

The company also manages property on behalf others. The value of the property under management exceeds $400 million and provides a substantial cash flow for the group.

Kiwi Property Group’s objective is to provide investors with a dependable stake in NZ property while returning solid dividends year on year. The last dividend issued by the company was $0.022 per share in December last year reflecting the group’s resilience in the face of the challenges posed in 2020.

KPG shares last traded at $1.25 on 12 February 2021.

Private Land and Property Fund

Private Land and Property Fund (NZX:PLP) primarily invests in rural agricultural and horticultural property. While the fund expects to diversify overtime, the funds’ assets are currently concentrated in vineyards. The fund’s portfolio of property is worth approximately $61 million.

The fund receives a regular income via the lease of the properties in their portfolio. The return provided to investors is currently running at 6.7% annually.

On 15 February, PLP last traded at $1.051, down 0.85% since the market opened this Monday morning.

Investore Property Limited

The assets that Investore Property Limited (NZX:IPL) is interested in are large format retail estates located in the urban areas of NZ.

The Company owns 43 properties valued at around $1 billion dollars. Its assets include Takanini, Bay Central, and Mt Wellington shopping Centres.

In line with the Company’s strategy, the properties are occupied by highly recognisable brands such as Countdown, New World, Briscoes, and McDonalds. The occupants of their properties can typically withstand market trends and cycles ensuring a resilient cash flow for the Company.

Source: © Jovannig | Megapixl.com

The income derived from leasing the properties are returned to investors via annual dividends. It is currently returning 4.01% annually to investors.

IPL shares last traded at the price of $2.230 on 12 February 2021.


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