Kiwi Property Group Limited (KPG) Earnings Call Transcript & Summary

[Foreign Language] Thank you for joining us for the 2021 Kiwi Property Annual Meeting of Shareholders. Today's meeting is being conducted both in person and online, something that we've all come much more used to over the last 18 months or so. My name is Mary Jane Daly, and I'm a Director and Chair of the Audit and Risk Committee for Kiwi Property. Unfortunately, due to the current Sydney lockdown, Mark Ford and Simon Shakesheff are unable to join today's meeting in person. However, they will be joining us virtually. Before I hand over to Mark to formally open today's event, I'd just like to cover off a few housekeeping matters. Firstly, can I ask you to check that you've put your mobile phone on silent? The toilet facilities are located in the landing area behind the entrance to the room where you came in today. In the unlikely event a fire alarm goes off, please follow staff in an orderly fashion down the stairs, and we'll congregate in the car park at the front of the building just out here. If you are participating in the meeting online via the Link platform and you encounter any issues, please refer to the virtual meeting online portal guide or you can find the Link helpline on 0800 200 220. I'm now delighted to hand you over to our Chair, Mark Ford.

Welcome to our 2021 Kiwi Property Annual General. My name is Mark Ford, as introduced by MJ. I'm an Independent Director and Chair of the Board. I'm pleased to advise you that we do have a quorum today, and I declare this Annual Meeting of Shareholders open. As MJ mentioned, Simon and I are unfortunately in lockdown in Sydney and unable to be with you in Auckland. We were looking forward to meeting you in person today having a chat after the meeting and even perhaps a sausage roll and a cup of tea. But unfortunately, COVID has put paid to that. Rest assured, though, we'll do our best to make this meeting with plenty of opportunity for questions and engagement, and you will certainly have an opportunity to catch up with our Auckland-based directors at the end of the meeting. I'd like to start today's meeting by introducing my colleagues on the Board, and perhaps you might just give a wave to indicate who you are. I have it in an order differently to where your sitting does. So Jane Freeman. Jane was appointed to our Board in August 2014, is an Auckland-based professional director who has extensive retail experience in the field of customer-driven technology. Jane also serves as Chair of our Remuneration and Nomination Committee, and Jane is standing for reelection today. Mark Powell. Mark is an Auckland-based professional director following -- and following a successful career as an executive in retail, wholesale and logistics. Mark is Chair of our Environmental, Social and Governance or ESG Committee. Mary Jane Daly, who you had already met. Mary Jane was appointed to our Board in September 2014. She's an Auckland-based professional director with a strong background in banking and finance. And as Mary Jane said, she's Chair of our Audit and Risk Committee. Richard Didsbury. Richard was one of the founding directors of Kiwi Property, in fact, a founder in more ways than one and has had a profound impact on the company. After almost 30 years as a director, Richard will be stepping down from the Board today. And I'll have a little bit more to say about that later on, and we'll also give Richard the opportunity to say farewell. 30 years is a long stint anywhere. It's more than a life sentence, Richard. Simon Shakesheff. Simon is an Australian-based professional director and joined our Board in November 2019. Sadly, this is Simon's second AGM. And both, he has had to be online rather than there in person. Simon brings a wealth of property and finance experience to the role, and he's a member of both the Audit and Risk and ESG Committees. Chris Aiken. Chris is our newest Director. He's professionally based, sorry -- an Auckland professionally based director and only joined our Board in June this year. Chris has significant property experience, spanning both the public and private sectors. Chris will be a member of our Remuneration and Nominations Committee and will be standing for election today. We're focused on ensuring a smooth and effective director succession, and Chris' appointment is an important step in this process as we continue to add a complementary mix of skills and experience to the Board. In accordance with the NZX Listing Rules, the Board has determined that all directors are independent. The Notice of Meeting that you received recently also contains further information on the director independence. We also have joining us today Clive Mackenzie, our Chief Executive Officer; and Gavin Parker, our Chief Financial Officer. I also extend a warm welcome to the team from our registrar, Link Market Services. They will help us conduct the voting of the formal business later in the meeting and will act as scrutineer. And finally, I'd like to welcome Jonathan Skilton from PwC, our group's auditor. Just running through the agenda for today. I'll start with a brief address and then invite Clive to provide an update on some of the key opportunities before outlining the company's financial results for the year ended 31 March 2021. At the conclusion of these presentations, I will then hand over to MJ to chair the meeting while we take questions and conduct the formal business for today. The formal business is to reelect Jane Freeman to the Board, to reelect Mark Powell to the Board, to elect Chris Aiken to the Board and to authorize the Board to fix the auditor's remuneration. In regards to questions, shareholders present at today's meeting will be able to ask questions as will those participating through the virtual meeting website. [Operator Instructions] We will be answering general questions at the conclusion of reports from both myself and Clive and then specific questions relating to each resolution before voting on them. I encourage shareholders who are attending online to send their questions in as early as possible to make sure that we can coordinate and get every question asked at the appropriate time. As this is a shareholders' meeting, only shareholders or appointed proxies can ask a question. So you'll be prompted to input your shareholder or proxy number before completing the process. Let me move now to my comments for the day. It's been a strange year or 18 months. COVID-19 has had a significant impact on Kiwi Property and the world around us over the last 18 -- sorry, 18 months, more than 12. Despite this, New Zealand's low rate of infection, coupled with significant government intervention, has enabled the retail and office property sectors to perform better than we initially anticipated. As lockdowns became shorter and more localized during the year, trading conditions stabilized across the country, enabling Kiwi ordinary operating performance to do the same. This contributed to a stronger result through the second half. Throughout the year, we continued to put people first. This approach has helped to keep our employees, our customers and our communities safe and seen us act as a partner to our tenants, supporting them through the financial and operational challenges caused by COVID-19. While Kiwi Property clearly did not escape the impact of the pandemic, the steps taken to safeguard our tenants and our balance sheet has helped the company end the 2021 financial year in an improved position. COVID-19 has accelerated a number of significant trends in the property sector with implications for us and our business strategy. Firstly, the retail landscape has undergone a significant change, including a pronounced bifurcation in the sector. Leading shopping centers -- sorry, in the sector. Leading shopping centers such as Sylvia Park and The Base continue to get stronger, while in contrast, many regional centers are under pressure. Major retailers are focusing on fewer flagship stores at the best locations and using other locations more likely to serve online business. The flight to quality in the retail sector also extends to office, where premium grade buildings, including our Vero Centre, are continuing to achieve higher rents and strong occupancy. The rise of flexible working has also created demand for hub and office spoke configurations, where tenants retain an inner-city presence but also support that with suburban offices such as our ANZ Raranga office at Sylvia Park. Finally, in this respect, and I'm sure you're all aware, house prices in New Zealand have grown rapidly over recent years, placing homeownership out of the reach of many. It takes the average Kiwi more than a decade to save for and purchase their own home, making renting a reality for over half of Aucklanders. New housing models, including potential build-to-rent, will be required to address this shortfall and ensure tenants have secure, quality accommodation. Clive will comment further on build-to-rent and the future for build-to-rent in his presentation. Our business strategy tries to be at the forefront, but sometimes we do have to respond to things that are happening in the market. And as much as possible, we try and take advantage of that. Many of the trends I've just outlined have led to our having to tweak with our strategy. We believe strongly that we have a plan in place to deliver a step-up in business performance in the years ahead. We began our mixed-use journey 2 years ago with a focus on rebalancing our portfolio and positioning the company for long-term growth. While COVID-19 temporarily disrupted our plans, we are focused on once again accelerating progress in the 2022 financial year with a commitment to creating value for our shareholders. We'll do this in 3 key ways. We'll intensify our mixed-use assets. We'll grow with third-party capital, and I'll talk a little bit about that in a moment, and we'll empower the success of our customers. I'll actually take you through each of those 3 very briefly. With respect to mixed-use, we continue to regard mixed-use community creation as the core of our business. Our strategy of intensifying our large, transport-oriented landholdings with a range of complementary asset types remains as relevant, if not more so, today as it did before the pandemic. These mixed-use communities will be thriving destinations with outstanding transport infrastructure, where people will work, shop, connect, live and play. By extension, they could feature a range of uses, including retail, office, build-to-rent residential, medical, logistics, dining, entertainment and potentially hotel accommodation. And as you know, a number of those features are already in existence at our major shopping centers. By owning a group of assets offering complementary economic benefits, we will increase income diversity and encourage smoother returns throughout the property cycle. As you can see from the slide before you, our mixed-use portfolio includes a number of significant assets with the necessary size, location and zoning to support further intensification. Our mixed-use portfolio comprises Sylvia Park; LynnMall; The Base, which we hold in joint venture with Tainui Group Holdings; and when ultimately developed, our Drury asset will also be a mixed-use asset. With our focus on mixed-use and the strong performance of our office portfolio, we see these assets -- asset classes as the future of our company, alongside a potential move into build-to-rent and perhaps other opportunities as they raise themselves. With this in mind, we stepped up our portfolio rebalancing efforts in financial year '21. We listed The Plaza for sale in Palmerston North in October 2020 and subsequently also have listed Northlands in Christchurch for sale. We expect the sale process to take some time, but it's important to get things moving. The rationale for our portfolio rebalancing program is clear. The sale of our regional shopping centers will recycle capital to fund the development of mixed-use opportunities that we believe will deliver greater growth and lower risk over time. The proposed sale of both The Plaza and Northlands will have a temporary impact on earnings. By reinvesting the proceeds into mixed-use, we expect to ultimately drive higher total returns and create a higher quality portfolio. Our aim will be to move through this transition phase and deploy the capital as quickly as prudently possible. The second pillar of our value creation strategy is to grow with third-party capital. Kiwi Property has a large and exciting growth pipeline, including Drury, where the company's 53-hectare site is set to become the town center for a community that is expected to grow to around 60,000 people within the next 20 years. This pipeline is a source of significant competitive advantage and will unlock value for you, our shareholders. Funding the company's exciting growth plans will require a range of sources of capital, including funds management and joint ventures, such as those we currently have with Tainui Group Holdings at The Base and now also at Centre Place North. By using third-party capital, we'll be in a strong position to accelerate growth and create additional revenue streams. The third pillar of our strategy is to empower customer success. In order for Kiwi Property to be successful over the long term, so too must our tenants. This has never been more apparent than over the past year when COVID-19 has placed many of our retailers and small business enterprises under significant pressure. We acted as a partner through this period, helping to safeguard their physical and financial well-being. The support provided evolved in step with the pandemic, including providing rent relief during the initial lockdown and assisting stores to establish click and collect facilities in the weeks that followed. Our commitment to empowering the success of our tenants is not simply a response to COVID-19, though. Given the breadth of the company's footprint, we are well placed to aggregate information and services to create value for Kiwi Property, its customers and tenants. While the company is still early in its digital journey, we are currently investing in this space and see it as a source of future competitive advantage. As our mixed-use communities continue to develop and evolve, digital will ultimately play a key in delivering connected experiences for those working, playing or living at our assets. I'd now like to talk a little about sustainability. Sustainability has been a key focus for Kiwi for almost 20 years. And today, it's become part of our DNA. Over the past year, we've achieved a number of important milestones in this space, including a 59% reduction in emissions compared to our 2012 baseline measurement and also being awarded an A rating in the Carbon Disclosure Project. And we're the only New Zealand company to achieve this standard. We're very proud of that. In May, we also released our refreshed 2021 to 2025 sustainability strategy, including new targets and our commitment to becoming net carbon negative in our operations by 2030. This is built around the 3 pillars of people, places and partnership. The strategy extends Kiwi Property's traditional environmental focus to include an additional emphasis on enhancing the well-being of our communities. And as you know, we, last year, established an ESG Committee to specifically focus on these matters. I'd now like to hand over to Clive for his remarks today. Thank you.

Thanks, Mark, and kia ora, everyone. After last year's fully virtual annual meeting, it's great to be connecting with everyone and shareholders face to face once again. And so thank you for joining us today. And to everyone viewing this event online, we appreciate you taking the time to log in today as well. As Mark mentioned, Kiwi Property faced a number of challenges in FY '21 fueled by COVID-19 and the impact on New Zealand. Despite this, we finished the year strongly and have begun the FY '22 with positive momentum. Our aim is to maintain that trajectory throughout the year and focus on delivery. Kiwi Property is in a period of transition, including rebalancing our portfolio, reducing our retail exposure and increasing our focus on mixed-use. By making this strategic pivot, we will help bring and drive higher growth and total returns for shareholders over the medium to long term. In addition, we have a number of exciting opportunities ahead that have the potential to unlock significant value for you, our shareholders. Let's take a look at some of them now. Sylvia Park's 20,000 square meter Level 1 expansion has traded strongly since its launch in October of 2020 and is fueled by exciting new flagship stores such as H&M, Sephora, Superdry, North Beach and Under Armour. Last week, high-profile beauty retailer, MECCA, opened its largest New Zealand store, featuring 2 floors of the latest cosmetics. I was at the center on the weekend, and it was packed. In parallel, The Terrace at Sylvia Park dining precinct has exceeded expectations with restaurants such as Master Bao and Daruma Sushi attracting significant followings. With the launch of The Terrace at Sylvia Park, the center's food and beverage offering has never been stronger. Elsewhere at Sylvia Park, major international sportswear retailers JD Sports and Culture Kings have announced their first New Zealand stores at the center's new urban athleisure precinct at the former H&M site. These exciting brands will offer unique customer experience and previously unseen brands at the center, giving Kiwis even more reason to visit the country's favorite shopping center. We stepped up our development program late in FY '21, announcing plans to proceed with a second office building at Sylvia Park known as 3 Te Kehu Way. The $63 million 6-story development will target a 6 Green Star rating and is set to begin construction in October of this year. Following on the success of ANZ Raranga, we're continuing to receive strong interest in office space at Sylvia Park due to its convenience, amenities and its excellent links to public transport links. As you heard from Mark earlier, hub-and-spoke office networks have risen in popularity following COVID-19, and the construction of this new building will help us to capitalize on this trend. The development of 3 Te Kehu Way is an important step in Sylvia Park's mixed-use journey and evolution, providing the core of an attractive office and commercial precinct at the site that we'll be able to build on years to come. Also on the development front, we're making strong progress at Drury, including advancing our plans to develop our landholding into a master-planned mixed-use community. Working alongside a consortium of property companies, we intend to create a thriving transport-orientated development with our site acting as the new town center. Drury will be an attractive place to live, work and play south of Auckland as the city's geographic boundaries continue to expand. The government has recently announced a significant increase in funding for a new train station adjacent to our land, further enhancing its connectivity. The Minister for the Environment is currently processing a fast-track application for the project under the COVID-19 resource act, sorry -- Recovery Act. In parallel, we have also submitted a private plan change, which is due to be heard next month. If either of these applications is successful, there is the potential for earthworks to begin on our site at Drury as early as 2022, and this is up to 3 years ahead of schedule. We continue to make progress planning for our build-to-rent or BTR residential accommodation and are making final preparations for this exciting new asset class. We have now secured resource consent for our build-to-rent development at Sylvia Park and have submitted an application for a subsequent build-to-rent tower at LynnMall, which is just down the road from where we are today. Detailed design is underway for both of these projects. With houses becoming increasingly expensive and people taking longer to save for a deposit, we see significant opportunity for build-to-rent. The asset class has undergone rapid growth in the U.S., the U.K. and Australia, and we expect the same to happen here, if the right legislative settings are in place. With our large landholdings serviced by excellent transport infrastructure, we believe that Kiwi Property is well placed to become a leader in build-to-rent in New Zealand. Not only is the asset class complementary to our mixed-use strategy, it also offers less volatility and helps further diversify our company's earnings. We're closely monitoring the proposed law changes around interest deductibility for new build developments and will await the outcome of the consultation process before deciding if and when we will move forward. Please note that as we're undertaking -- sorry, moving now on to our financial results. Please note that as we're undertaking a sale process for The Plaza and Northlands, these assets, along with 50% of Centre Place North, have been reclassified as assets held for sale and are, therefore, excluded from the sales and leasing metrics shown in today's presentation. As you can see from this slide, COVID-19 had a material impact on Kiwi Property's financial performance in the 2021 financial year. The level 3 and 4 lockdowns early in the year had a significant effect on our mixed-use assets, contributing to a 7.3% decrease in net rental income or NRI. Pleasingly, our office portfolio remained resilient, however, delivering NRI growth of 2.1%. The cash impact of COVID-19 also resulted in reductions in both full year AFFO and operating profit before tax, which declined 12.5% and 10.3%, respectively. In contrast, an increase in the fair value of our property portfolio contributed to net profit after tax of $196.5 million in FY '21, up $383.2 million on the year before. The company's property portfolio was worth $3.3 billion at 31 March 2021, up from $3.1 million the year before. This includes a fair value gain of circa $100 million, partially reversing the negative valuation movement that followed the arrival of COVID-19. While the uncertainty caused by the pandemic continues to impact property valuers' assumptions, recent transactions suggest investor confidence has returned to the commercial property markets. We hope to see this trend continuing, resulting in a further firming of the capitalization rates across our mixed-use and office assets. The $100 million revaluation gain also contributed to an improvement in our gearing ratio, which decreased to 31.2% and remains well within our self-imposed target range of 25% to 35%. Net asset backing per share is $1.36, up from $1.26 at the end of FY '20. Despite the challenging year, we achieved pleasing rental growth of 3.2% in FY '21 across our investment portfolio. Our mixed-use leasing spreads were up 2.7% for the year, while several strong deals at Vero Centre with a catalyst to a 3.5% increase for the office portfolio. At the year-end, our mixed-use and office assets were 99.7% occupied for the year, up 20 basis points on the prior comparable period. This is an impressive achievement given the impact of COVID-19 and reflects the strength and the quality of our portfolio. Our weighted average lease expiry has also increased to 5.3 years, up from 4.9 years in FY '20. And this was driven by new leases at Sylvia Park's Level 1 expansion, in particular. Unsurprisingly, retail sales and production counts declined in FY '21 with a number of stores unable to trade during the level 4 lockdown, in particular. Total sales at Sylvia Park, LynnMall and The Base were down 11.4% on the prior year and 5.4% across our mixed-use and large format retail centers combined. We've also calculated adjusted sales based on the actual days stores were able to trade to provide a more accurate comparison against the prior year. A high-level snapshot is shown here. As you can see on the adjusted basis, sales were actually up significantly on FY '20 with the postlockdown retail rush contributing to an increase in total sales at Sylvia Park, LynnMall and The Base and an impressive 13.9% rise across both our mixed-use and large format retail assets. That concludes my review of FY '21. As we look ahead to FY '22, the management team and I are squarely focused on delivery. That includes moving ahead with the development pipeline, progressing our portfolio rebalancing program and getting ready to go on build-to-rent. Kiwi Property is in a period of transition, but we believe strongly that we have the plan and the people and the drive to grow and increase our returns. Over the next year, we look forward to making substantive progress on our strategy as we continue striving to create value for you, our shareholders. Thank you for your continued support. And with that, I'll now hand back to Mark. Thank you.

Thanks, Clive. I'd just like to make a few comments regarding our dividend and dividend guidance. We paid a final cash dividend of $0.0295 per share for the 6-month period ended 31 March 2021. This takes the total cash dividend for FY '21 to $0.0515 per share, equivalent to 90% of our AFFO. AFFO guidance for 2022 will be provided once the sales of The Plaza and Northlands have been concluded. However, based on current projections, next year's dividend is expected to be no less than $0.053 per share. This is contingent on the financial performance of the company and barring material adverse effects or unforeseen circumstances such as further COVID-related lockdowns. The disposal of our regional shopping centers, coupled with last year's change to the dividend policy, will likely contribute to rebasing of dividends in the short term. Ultimately, though, we expect these steps to contribute to a higher quality asset portfolio and more stable income stream. That concludes our review of the company's activities for FY '20. I'm going to step off script for just a minute. As you know, Sydney is now in a lockdown. New Zealand and Australia have been at the forefront of treating COVID over the last 12 months, but Sydney's new situation shows us that this nasty little bug will not likely be going away anytime soon. And without meaning to get involved in politics or any other personal matter, I would suggest that the sooner that New Zealand and Australia can become -- get to high levels of vaccination, the better off we will all be as we go forward. So off script, but something I had to say. And with that, I'd now like to hand over to MJ, who's going to chair this part of the meeting. Thanks, MJ.

Thanks, Mark, and a very important message there for us all about vaccinations. Before we move to the formal business for the day, we're now going to open up for questions. We ask that you limit your questions at this time to the company's activities. You will have an opportunity to ask questions relating to the formal business of the meeting when we actually start to deal with those agenda items. As this is a shareholders' meeting, only shareholders or appointed proxies can ask a question. When I call for questions, can shareholders that are present in the room please wait until a microphone comes to you? And the reason that's important is because for our shareholders who are online, they won't be able to hear your question unless they hear it through the microphone, so just to save you having to repeat it. And then if we could also ask that you clearly state your name and then your actual question. I'm going to take questions from those present in the meeting before moving to questions from shareholders that we have online. So on that note, I'd like to open up and ask, do we have any questions from shareholders in the room? One over here.

My name is [ Robert ], and I'm a shareholder. I don't get around very well anymore. During level 3 lockdown, I was very distressed when I went to Sylvia Park and found I could not get access to PAK'nSAVE. I also sometimes show up at the new market in Westfield, access there with security guards all the time that let you through but -- and you had to go through -- you sped through all the shops and half the shops in the place to get to downtown. But PAK'nSAVE at Sylvia Park, from the train station, it's a very short distance through and [indiscernible] for instance, the train station. But if you had to walk the whole length of Sylvia Park and then around again to get to PAK'nSAVE, and it was a nightmare. Eventually, I got lost. I was on the point of collapse when finally, a security guard did come and lead me through it. It was a very long time before I went back to Sylvia Park again.

So Clive?

Yes. [ Robert ], sorry to hear that you had a poor experience at Sylvia Park during that lockdown process. Obviously, without knowing the exact details of why you weren't able to get access because you should have been able to have access because obviously, the supermarket was trading, it is something that we'll follow up and make sure that when we have any subsequent lockdowns that we make sure that doesn't happen. But thank you for that feedback and sorry about the poor experience you had.

Thank you for that question. Have we got any more questions? Sorry, we'll just go here, and then we'll go over there. Thank you.

[ Janet White ], shareholder. I noticed in the compendium that Kiwi Properties has no assets in the South Island other than The Plaza, which is up for sale. Two questions: Why is that? And second question is, are you looking to invest in South Island?

So Mark, I might hand over to you as Chair to answer that question.

Yes. We obviously have Northlands in Christchurch. Look, our strategy revolves around the golden triangle, which is Auckland and surrounding areas. We see that as the area where there is -- there are most growth opportunities. We will look at other opportunities, and we'll look -- certainly look at opportunities in the South Island. But at the moment, it is not high on our agenda, unfortunately. And that's from a point of view of being able to provide high-quality, sustainable income stream to our investors.

Cool. Thank you. And we have a question at the stair step.

Thank you. [ Jim Taylor ], shareholder. Chairman made reference to dividends and [indiscernible]. Not long ago, we were doing $0.07 a share. for reasons we all know, that's been reduced to $0.0515 in the current year, 90% of the AFFO. Guidance, of course, is $0.53, and I'm not sure what the calculation is behind that. But from where I sit, I can't see a compelling reason why only 90% is being paid out on the AFFO. 100% would perhaps lift the dividend to -- guidance to maybe $0.058. Of course, dividends are one of the major drivers of share price. And there's a gap currently between the net tangible asset value of $1.36 and what the market is reading. This might go somewhere to closing what I see as not healthy gap and also reward shareholders a little bit more for the sacrifices that they made over the last couple of years. So could I make that suggestion to directors when they sit down and look forward? I know the $0.053 is a guidance and subject to asset sales and other things, but I'd like to make that suggestion, too. There is a compelling reason why it cannot be 100% of a sustainable AFFO. Thank you.

Thank you. And I'll ask -- I know that Mark will probably want to make a few more comments around it. So Mark, I'll hand over to you.

Yes. look. Thanks for the question, [ Jim ]. And I think it's a very appropriate question to ask because you guys have seen your dividends reduced. Let me say a couple of things. Firstly, when we are looking to the future, we are rebasing. If you look at Kiwi over the last 10 years, we've had significant expenditure where there was no return. So for instance, we spent over $150 million on remedial works around earthquake damage and earthquake strengthening and particularly in our Christchurch and Wellington assets. That has clearly had an impact over time, and we're now feeling the aftereffects of that. With respect to the 90% payout of AFFO, we do need to fund ongoing CapEx requirements. We have operational capital expenditure in all our assets that needs to be funded, but we -- sorry, we will take on board your comments, and we will continue to refine our dividend policy in the coming years.

Thank you.

[ Mohan ], shareholder. I was just wondering whether the development of data centers and warehouse spaces by huge technology and multinational companies is on the radar of our company. So the land we hold could be leased out or even used for these multinational companies to come in and develop data centers. I know Microsoft is already doing something in Auckland. And maybe the South Island is a good opportunity to develop some things like that, if this is the way the retail space is going, huge technology-oriented sales. And the companies would definitely require spaces for data centers and warehouses. And I know it was announced, we opened up New Zealand for -- recently New Zealand for Australia. And maybe they may like to open up in New Zealand also. It is a potential for the company.

Thank you, [ Mohan ]. Data centers are a different asset class to what we have, but I'll get Clive to make a couple of comments about what our focus is around the sorts of assets that we look to invest in.

Sure. Yes. Thank you. Good question. As MJ alluded to, we're looking at building mixed-use communities, and we're also looking to build relationships with some of our key stakeholders. One of the ones that springs to mind is Zara, which is a great fashion retailer in New Zealand. And they have -- only have 1 store in New Zealand, their space at Sylvia Park. We have recently done a transaction with them where we provide all the back-of-house logistics space, which allows them to do their online fulfillment for the whole of New Zealand. Likewise, we have relationships with our banks, where ASB and ANZ, for example, have significant office holdings with us or tenancies with us and as well as their retail tenancies as well throughout our portfolio. So there could well be the opportunity for us to link them down the line and build those partnerships, particularly with some of the banks around some of the data warehousing strategies as well. So it is something that we have on our radar. But primarily, we're focused on building the relationships and the assets that we have. And if that does include data centers and one of our partners wants us to partner with them, that would certainly be an opportunity we could look at, yes. Thank you.

Okay. Do we have any more questions from shareholders in the room? I've got one here.

First time as a shareholder. I was somewhat surprised at your positive comments about the development at Drury. And I was just wondering if you have reason to believe that this should be optimistic not only in the past but [indiscernible].

Clive, are you happy to answer that?

Okay. Look, Drury is a long-term investment. It's not about the next 2 or 3 years. It's really about the next 5, 10, 15 and 20 years as you build a new town. Auckland will need to grow. And whether it's this government, the next government or the government after that, we need land to be able to develop. And so I think the previous government and the current government have all focused on Drury as an opportunity. We're uniquely positioned there with 53 hectares that actually is the town center. There is investment being made around public infrastructure. There's the 3-laning of the motorway to Drury, which is currently underway. So yes, it is a long-term objective. And I think it will see many governments come and go. But ultimately, it's a great opportunity for us to build a brand-new town and a brand-new mixed-use community with our company being at the center of that.

And we've got the train station, which makes it quite unique and very climate-friendly.

Yes.

Yes.

Will it have a train station?

Well, we hope we have a train station, yes.

As much as we can. Okay. So have we got any other questions from the room? I've got another one here.

Another couple of things. When you go to Sylvia Park, there's not much in the way of seating. It's a very long -- more -- when you get down there, the way of seating -- if you go to Westfield, our new market, there are seats everywhere. If you go and do -- go and do [indiscernible] down there. But if you go there and buy [indiscernible] or anything, there's seating everywhere, tables and chairs. Another thing, I'm also wondering what the company actually plans to do with the land they bought at Sylvia Park between the shopping mall and Carbine Road.

Okay. So I think we -- you've got some really feedback on Sylvia Park. And today, we have Linda with us, Linda Trainer, who we won't get you to answer the question, Linda. But Linda will come and have a talk to you after the meeting to just get a bit more full of perspective around your experiences at Sylvia Park so that she can have the benefit of that and her thinking around that center. Specifically about the land around Carbine Road, Clive, can you answer that question, please?

Yes. Sure. We obviously have been, over a number of years, buying up some strategic landholdings adjacent to Sylvia Park, which you could see on the slide today. That land allows us to be able to transition it from its current use, which is sort of light commercial, through to other high and better users over time. So we're currently working on plans for additional office buildings to be situated there. And so when the time comes, we will be able to make some announcements around some of those opportunities. But it's a great development site for us. And we're fortunate enough to own the land on both sides of the rail line, which gives us unique access to that public transport hub. So it basically sets the center up and that asset up for the next 10, 15 years with available land for development. And it is a significant growth hub for Auckland. Thank you.

Right. Thank you. I think we've probably dealt with all the questions in the room. Thank you very much for those. We really appreciate them. I'd now like to move to our shareholders who are online. And Trevor, just wondering, have we got some questions from our shareholders online?

Yes. We do. So the first question is from [ Ronald Kean ]. And the question is, what is Kiwi Property's view of the expected impact of the business from a rise in interest rates?

Okay. Thank you for that. I think I'll move to Gavin for that question. Gavin is our CFO. I'm just -- can we do something about this noise? Did everybody hear the question in the room? Yes, you're all good. Okay.

Sure. Thanks, MJ. A couple of comments. Firstly, we take a very active approach to capital management. We maintain a mix of fixed and floating rate debt and a good spread of maturities. Currently, 70% of all of our debt is fixed. So it's not subject to movements in the floating rate. Currently, our weighted average cost of debt is 4.2%. So there is room for our debt to fall further because we have some more expensive fixed rate debt that will mature. For example, we have our KPG010 bonds maturing on the 20th of August, next month. They're paying a coupon of 6.15%. And you may be aware we just closed a new bond issue on Friday paying a coupon of 2.85%. So some of that fixed rate debt is getting cheaper, which will offset any potential increases in floating rates. So we're well buffered for that.

Okay. Trevor, do you have another question from shareholders online?

Yes. The next question is from [ Carrie Drummond ]. If the regional properties that are currently offered for sale, Northlands and The Plaza, don't sell, what impact will this have upon earnings and also upon the development of the land at Drury and built-to-rent?

Okay. I'll ask Mark as Chair to answer that question. Did you hear it?

I'm sorry. Sorry, MJ, but I actually didn't hear the question. I can't hear Trevor.

Okay. The question was, if we are unable to sell Plaza or Northlands, what will be the impact on earnings? And will that affect the timing of our developments around Drury -- sorry? Around Drury.

BTR.

And our building at Sylvia Park.

Okay. Well, interestingly, the impact if we can't sell those assets is that short-term income will be higher because there's high-yielding assets. But as we've discussed, they're high yielding for a reason. They have higher risk, and we are looking to reinvest the proceeds into higher-quality, long-term, more sustainable assets. With respect to other alternative finance opportunity -- sorry, financing opportunities to pursue build-to-rent, our new office building at Sylvia Park and in the future, Drury, we constantly work on a whole range of funding opportunities. We -- as we've discussed, we -- part of our strategy is funds management, and it may be that we will bring third-party capital in for some of those developments. But I guess all I can say in summary is that there are other funding opportunities. These sales are -- clearly, as you will have gathered and have been talked about a lot today, are high on our priorities. But we do have other funding opportunities that will be available to us.

Thanks, Mark. Trevor?

The next question is from [indiscernible]. And the question is, is it possible to cover the overhead railway/bridge walkway at Sylvia Park given the number of trains arriving and departing?

So Clive, I'll ask you to -- are you okay on that one?

Yes. Sure. Look, the original rail station and access way was actually, I think, built as a sort of a stopgap as Auckland's rail network was sort of coming up to speed. Clearly, it's become a busier and busier train station as time has passed. In fact, I believe on the weekend, it's now the third busiest train station on the network, which is just testament to how popular the center is and how popular public transport is to the center. We are in discussions with Auckland Transport about how we redevelop that train station, a, to give us linkage onto our landholdings on the other side of the rail line, but also to make it a much better customer experience whether you are a shopper, whether you're an office worker or ultimately, you're going to be living at the site. So there's definitely room for improvement, and we'll be working hand in glove with AT to improve that experience as much as we can.

Thank you, Clive. Trevor, do you have another question?

Yes. The next question is from [ Dennis Gostrell ]. The question is, the share price is some 15% below NAV. Most, if not all, of the other property companies are trading at a premium to NAV. Indeed, some are at a significant premium to the NAV. What is being done to close this gap?

Cool. That's a question for Mark. Can you -- did you hear the question, Mark?

Yes. I'd like [indiscernible].

Yes.

Okay. So look, as mentioned today, we are going through a transition. We have introduced a new strategy about 2 years ago. And until -- I think until we implement that strategy, people are seeing -- they're wondering, "Well, is it going to happen?" It is going to happen. We had setbacks with COVID and other things around the place that have caused a few delays. But we will look -- we are always looking at how we can improve the share price. It's a very good question, but I think it comes down to implementation of our strategy. And 2022 is a year of implementation. Do you want to add anything, MJ?

I think the key message is that we're very consciously aware of where our share price is trading, and we believe our strategy and execution of that strategy will improve the performance of the share price and will ultimately deliver higher returns for our shareholders both in terms of dividend and capital growth. So for us, the key focus is getting on and executing that strategy that we have in place. And hopefully, that's the key message that you're taking out of today. So Trevor, do you have another question from shareholders online?

Yes. The next question is also from [ Dennis ]. The question is, dividend paid has fallen quite significantly. When can we expect to see the dividend restored to previous levels? And when will the dividend then start to grow again?

Okay. So Clive, do you want to talk to it or should...

Yes. Sure. Yes, clearly, the dividend has been impacted by a number of the things that Mark has highlighted around COVID, that had a significant impact on our business and also as we transition out of some of our high-yielding retail assets such as Palmerston North and Northlands. So that's going to take a little time as we work through that. But once all the new assets that we are committing to or going to be committing to in terms of build-to-rent or office, et cetera, start coming on stream, then our income will be able to rise up again, and we believe we'll have a much stronger growth trajectory than we had prior to the existing sell-down of those assets and COVID as well. So we just -- as Mark called out, it's a period of transition as we go through this. And we need to build the new assets so we can get the income and get the growth that we're projecting from them, yes. Thank you.

Okay. Thank you. Do you have any more questions from shareholders online, Trevor?

No, there are no more questions at this time.

Okay. So thank you again for your questions. We appreciate that. We will now move on to consider the formal resolutions for the meeting today. So just to talk a little about how we will do the voting. Voting on each resolution will be by poll. Each person voting at the annual meeting and each shareholder who has cast a vote directed by proxy has one vote for each share held. I will put each resolution to the meeting and provide an opportunity for you to ask questions in relation to that particular resolution. I ask that you keep the questions focused just on that resolution that we're considering at that point in time. In respect to proxies received, if as Chair of the meeting, I have been appointed to act as proxy and I'm not directed how to vote in respect of that particular resolution, I will be voting in favor of the resolution. For shareholders joining us here today, you should have a voting card, which was given to you when you registered. If you don't have a voting card, can you please put up your hand and someone will assist you to give you one. Please mark your voting intention for each resolution, and the voting cards will be collected at the conclusion of the meeting. Shareholders joining online will be able to cast their vote using the electronic voting card received once online registration is validated. To vote, you will need to click on Get Voting Card within the online meeting platform. You'll be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way that you wish to vote by clicking for, against or abstain on the voting card. Once you have made your selection, click Submit Vote on the bottom of the card to formally lodge your vote. Please refer to the virtual meeting online portal guide or use the help line, which is 0800 200 220, if you require any assistance. Note voting will remain open until 5 minutes after the conclusion of the meeting. Results of the votes will be declared and announced via the NZX. So now moving to the actual resolutions, and we're going to be moving to resolutions 1, 2 and 3, all of which are ordinary resolutions. In accordance with the company's constitution and the NZX Listing Rules, Jane Freeman, Mark Powell and Chris Aiken will retire at this meeting. Jane and Mark offer themselves for reelection, and Chris offers himself for election. The Board has determined that if Jane Freeman or Mark Powell are reelected and/or Chris Aiken is elected, they will each be independent directors for the purposes of the NZX Listing Rules. I will now ask Jane, Mark and Chris to provide a brief bio and comment supporting the reelection. So firstly, to Jane. Here or do you want to come up?

Thanks, MJ, and thank you so much, everybody, for reconsidering my reelection today. My background is in the area of customer-driven technology and digital disruption. And I've had a lot of experience over the years in those sorts of industries and very focused on meeting customer needs. I've been a director now for some 20 years or so, believe it or not, it's flown, and on companies such as Air New Zealand, ASB Bank, Foodstuffs North Ireland and other companies that equally were customer-focused. I'm very excited about the future of Kiwi Property and our connected community strategy. I think in the increasingly digital and technology-focused world, where we are really on point about meeting customer needs at all times, we need to be thinking about the role of technology in our business and how we use it to keep our customers connected with each other and with ourselves. And having also been Chair of the Remunerations Committee for Kiwi, I'm very focused on making sure that our incentives and remuneration are lined up with shareholder value. So I have some of the skills I hope that you will see as being helpful in this direction and meeting our vision, and I thank you for your support today. I'll pass over to Mark.

Thank you, Jane, and good morning. I'm Mark Powell. I'm an Auckland-based professional director. I currently sit on the Boards, as well as Kiwi Property, seeking reelection today, of 2 ASX-listed companies: JB Hi-Fi, the technology electronics retailer; and Bapcor, an automotive parts distributor. And I'm also on the Board of a number of not-for-profit charities. I'm a former Chief Executive of The Warehouse Group, and I've got extensive experience in customer-focused strategy setting and execution, cultural and digital transformation, property development, logistics, mergers and acquisitions and joint venture management in publicly listed companies. I'm currently Chair of Kiwi Property's Environmental, Social and Governance Committee, the ESG Committee, that we formed last year. I feel privileged and honored to put myself forward for reelection. I believe my skills, background and perspective add and help in this transition of Kiwi Property Group that's been talked about today. I'll now pass over to Chris.

Thanks, Mark. And thank you for considering my election to this Board. Look, it's a privilege and a responsibility to stand up here and something that I'm well aware of. I'm also aware that exiting stage left is Richard, which is a very, very big pair of shoes. And hopefully, with your agreement, entering stage right is me. So here we go. Look, we've got a changing world. It's obvious. You've heard the conversations, and it's something that I've had considerable amount of experience in the last 10 years with some very large complex projects that the government has been trying to unlock, including Drury and others. The confluence of digital community changes place-based development, which is driving mixed-use and building great places for people to live, work and play. And climate change responses as well as the burning question of social equity are all driving a fundamental change, which I think Kiwi's strategy is right at the heart of that. So I'm very, very excited about the opportunity to be doing something in there. I use the word do. I'm actually a delivery person. I'm involved with a construction business. So I know what a program is and the cost plan, and I'm well aware of deadlines and getting performance in that respect. So I'm really looking forward to working with the delivery team at Kiwi to drive that. But more importantly, I'm looking forward to serving you as a director in the coming year on this exciting journey. Thank you.

Thank you, Jane, Mark and Chris. The Board is committed to ensuring it possesses the appropriate mix of skills, knowledge, experience and diversity to discharge its roles and responsibilities for you as shareholders. The Board supports the reelection of Jane and Mark and the election of Chris as it considers these candidates have the expertise to contribute to the overall skill set required by the Board to execute on our strategy. The Board, other than Jane, Mark and Chris, each in respect of their own positions, recommends that you vote in favor of these resolutions. So I'll now move to resolution 1. This resolution is that Jane Freeman be reelected as a Director of the company. So firstly, I'd like to ask, are there any questions from shareholders on this resolution in the room? Thank you.

Thank you. [ Jim Taylor ]. My question is, why have you chosen not to be a shareholder?

Is this working? Yes, it is working. Well, it's a good question. And I think there's 2 arguments for it. One is that, and this is the way I think, not having shares actually keeps me as independent as anybody. And on the other side, we've got other people that choose to be shareholders. So I've chosen the first one.

Okay. Thank you, Jane. Do we have any other questions from shareholders on this resolution?

[ Janet White ], shareholder. I have the same question for all 3 seeking reelection. All of you are professional directors. So my question is, what have you done in the past 20-odd years or so to maintain your up-to-dateness [indiscernible] in the specialties that you claim to have.

Okay. So how we'll deal -- we're just dealing with resolution 1. So that's asking questions in respect of Jane. So I'll ask Jane to answer that question in respect of itself. And then if you would like to ask the same question as we move through the resolutions, then we can deal with it for each person at that time. So Jane, do you want to talk about profit development?

It might be [indiscernible] for everybody. Well, I certainly am a member of the Institute of Directors, and we have to annually submit evidence that we have kept up to date with training and development across various forms of governance. And the other thing, as a director over many years, you have experience over a number of different industries. And you see a lot of different but similar situations that you generally learn as you -- across industries. So I think that's also helpful.

Thank you. Are there any more questions from people in the room on this resolution? So Trevor, do you have any questions online?

There are no questions at the moment.

Okay. Sorry, just let me get through my notes. Right. Thank you. For this resolution to be passed, it must be approved by a simple majority of votes of those shareholders or appointed proxies entitled to vote and voting on the resolution. I will now put the motion. Please now select either for, against or abstain for resolution 1 on your voting card. So I'll just pause for a moment while you complete your voting. [Voting]

Okay. That concludes resolution 1. I will now move to resolution 2, and I'll read this out for you. And this resolution is that Mark Powell be reelected as a Director of the company. So firstly, I'll ask if there's any questions from shareholders on this resolution in the room. Yes, that's fine.

Same question to Mark. What have you done to maintain your up-to-dateness in the specialties and deliveries and stuff that you claim to have?

Thank you. So Mark, do you want to talk to your professional -- you'd had a little bit more time to think about your answer. So that should be better than the last one.

It's a good question and I think an important question. I think there's the general things I think all directors do, reading, subscription to many different types of e-mails from consultancies and industry forums. I think the membership -- I'm a member of the IoD, Institute of Directors. I'm also a member of the Australian Institute of Company Directors and receive all their materials. And I do think being on the boards of other companies as well is ongoing education as well. Interestingly, as someone who finished being a CEO 5 years ago, I think in many ways, as a nonexecutive director, you have more opportunity to sit back and read and educate and monitor what's going on in the landscape. When you're a CEO, you're down in the trenches, and you don't get a lot of time to sit back sometimes. So there is that benefit. But also, when a particular topic comes up, I think on us as directors to say, "Should we get more knowledge?" So when we were setting up the ESG, the Environmental, Social and Governance Committee, last year, even though I was a former CEO of The Warehouse Group, which is a company, I think, that has led in the sustainability space for many, many years, I didn't think I needed to step back. So I actually did a 6-week program with the London Business School, an executive education program online. So that's just an example of how you keep up to date as well. So yes, as a director, you're constantly scanning to keep up to date, see what's going on. And there's no shortage of avenues to be able to do that with.

Thank you, Mark. Trevor, are there any questions online?

There are no questions.

Okay. So I think there are no further questions on this matter from shareholders. So thank you. Now again, for this resolution 2 to be passed, it has -- must be approved by a simple majority of votes of those shareholders or appointed proxies entitled to vote and voting on the resolution. I will now put the motion. Please now select either for, against or abstain for resolution 2 on the voting card. And again, I'll pause for you to cast your vote. [Voting]

Thank you. Right. I will now read resolution 3. This is that Chris Aiken be elected as a Director of the company. So are there any questions from shareholders on this resolution? So I think I'll let you ask your question. You can sit down for it.

[ Janet White ], shareholder. Same question to Chris.

Okay. Thank you. Chris, do you want to talk about professional development as a new director? That will be -- what are you planning?

Your diligence is remarkable. Congratulations. Yes, I think it's a really important question. And look, as my 2 colleagues have said, I won't repeat them, but it's incumbent upon any director or any of company officer to keep themselves fully informed. I think there is just one interesting angle that is a particular interest to me is understanding what won't change is pretty important, that we're building places that are going to build people and future communities in the years and the years to come when we'll be photos on the wall. And I have a particular interest in really trying to look and understand where the future is going to be and what sort of world my children and grandchildren will be living in. And I think that's really exciting and interesting. And I've never seen such a rich environment of information, some of which is incredibly confusing and will be completely wrong and some of which is disturbingly accurate as we adapt and grow. So I think looking forward and listening to the whispers that are out there is a very, very important part of any director's professional development.

Okay. Do we have any other questions from people in the room? Yes? [ Tim ]?

Yes. A repeat of my earlier question. I was a bit abrupt perhaps, I apologize for that. But I believe that a director should be all us as well as for us. It's common practice for executives to have share incentive schemes and show [indiscernible] along. So I think it's appropriate for directors as well. That's my own personal view. But do you intend to become a shareholder?

Yes. And the paper work's in the mail as we speak. Yes, I think it's a good investment. I think Kiwi is a very good investment. That's my reason. I don't have an ideological position, and there could be some positions where I would agree with Jane. But in this particular case, I think it's a good investment.

Great. Thank you, Chris. So I think that concludes the questions in the room. Trevor, do you have any questions online?

No other questions.

Okay. Thank you very much for those questions. So we'll now move to actually casting your votes. So for this resolution to be passed, resolution 3, it must be approved by a simple majority of votes of those shareholders or appointed proxies entitled to vote and voting on the resolution. I will now put the motion. Please now select either for, against or abstain for resolution 3 on the voting card, and I'll just pause for a moment while you vote. [Voting]

Right. We'll now move on to resolution 4, which is auditor's remuneration. This resolution is sought to authorize the directors to fix the remuneration of the auditor pursuant Section 207(S)(a) of the Companies Act 1993. During the 2021 financial year, $297,000 was paid to PwC for audit and assurance-related services. $14,000 was also paid for advisory services, and these primarily related to remuneration benchmarking. The Board recommends that you vote in favor of this ordinary resolution. I will now read the actual resolution, which I think is on screen, and that the directors be authorized to fix the auditor's remuneration. Do we have any questions from shareholders in the room on this resolution? Okay. Do we have any questions from shareholders online, Trevor?

There are no questions.

There are no questions. Okay. Thank you. We'll now move to -- moving this motion. For this resolution to be passed, it must be approved by a simple majority of votes of those shareholders or appointed proxies entitled to vote and voting on the resolution. I will now put the motion. Please now select either for, against or abstain for resolution 4 on the voting card. [Voting]

Right. Thank you very much. That completes voting on the resolutions. At this time, I'd like to advise the outcome of proxy votes that were lodged in respect of each of the resolutions, and they are appearing on screen behind me. I will not read the proxy results for each resolution, but you can read them for yourselves. The registrar, Link Market Services, will now move through the room to collect your voting cards. For those shareholders online, you can now submit your vote. Voting will be open until 5 minutes after the conclusion of the meeting. Let's see those get collected. And just to give you a bit more information, Link will complete the counting of all votes and complete their duties as scrutineer for the purposes of the poll. We will make an announcement of the results of the voting to the NZX once this process has been completed. I don't think you can see the room, Mark. But we're just finishing off collecting up the votes. Great. Everybody has been able to hand in their voting cards? Lovely. Thank you. Right. I'd like to hand you back to our Chair, Mark Ford.

Thanks, MJ. Before I close this meeting, I'd just like to say a few words about our retiring director, Mr. Richard Didsbury, nearly 30 years of exemplary service as a director of Kiwi. It's pretty amazing. And just before I do talk about Richard, in my time here as Chair, particularly in recent years, every year when we come out and say that Richard is independent, institutional shareholders ask me, "How can he be independent? He's been here so long." And my response has always been independence isn't a number of years. It's an attitude. It's in your head, and there's no question that Richard sitting around the table has continued through this time to be fiercely independent in representing the shareholders of Kiwi. As you all probably know, Richard was a founder of Kiwi Income Property Trust, as it was called in 1992. In the years since, he's had a greater impact on the company than any other individual. Richard was a driving force behind many of our most successful projects, including what is now Vero as well as the development of Sylvia Park. And I wasn't around at the time, but I expect at the time of development of Sylvia Park, people were saying, "What are you doing?" It's in the middle of nowhere at the time, and I think Richard was proved to be absolutely correct. Richard has demonstrated his unwavering dedication to our business, our people and our shareholders for the better part of 3 decades. He always challenges us to be better, to aim higher and to be more innovative. My screen froze there for a minute. I hope you could still hear what I was saying, yes. Richard has asked that I don't make a long speech today, which I'll say for his farewell when we can -- when Simon and I can come across and we might even have a glass of wine with Richard. So what I'd like instead is just to say thank you to Richard, not just for his unparalleled contribution, but on a personal note, for his friendship and support in the 10 years that we've worked together. There were questions about training before. I have to say, sitting in a boardroom with Richard, we all learn constantly. So Richard, big shoes to fill. It will take a number of us to do that and step up. So we do thank you. Please join me in a round of applause to Richard. And then I think Richard would probably like to say a couple of words. So thank you, Richard.

Well, thank you, everybody. And look, it's just wonderful to see faces that have been here for decades. And it's very moving that people have invested for their retirement, their nest eggs. And they have been investors in Kiwi, for many years. In fact, there are some here today who were here right at the beginning virtually 30 years ago. Isn't that amazing? And it was people like you that were -- that enabled Kiwi to be launched back in the early 1990s because there was no institutional support for an investment property. And it was the moms and dads, as we called you, who were the first shareholders. There were no institutions when we first started. And so I always reflect that you are the backbone of this company. The institutions, of course, might be the majority of our shareholder base, but it's truly the families of New Zealand that have supported us for all this time. And that is what the Board thinks about. We think about the impacts of our decision on your savings, and we're trying to do our best for you at all times. So we started all these years ago, and it's beyond belief really. We started with 3 properties. I can't remember the value. It might have only been $20 million, and here we are today with a portfolio of $3 billion in 30 years. It's astounding. And today, this morning, I made a point of popping into the Vero building, I still call it Sun Alliance, because we developed -- we started to develop at the 1990s. And the risk profile was a little bit too much for the investment trust, the Kiwi investment trust, when we formed the development trust. So I think some of you might remember that, and we finished it. But the point I want to make about that building was we completely revolutionized what an office building was and its role with its tenants. We've called that -- I see some gray here. And if I use the word the big pinky, do you remember the [indiscernible] white building in Queen Street? Because those were the types of buildings that used to be the case, with enormous marble foyer that you used to sort of -- you couldn't speak as you walk through it. And we turned the concept around where the foyer was an extension of the businesses because the law firms, the accounting firms and the occupants of the buildings were moving into open plan. And they wanted to enjoy -- to be able to meet close friends because your clients become friends over a period of time, and you want to meet them in an informal environment. And we certainly -- we moved the concept of an office foyer into something that is an extension of the business and one with soul. And you saw -- and I think all of you that go into Vero realize that, that foyer has got some magic to it. And I went in this morning because I wanted to look again at the Wall of Words. And for those of you who don't get into the city very often, please go and have a look because the Wall of Words does talk a lot about who we are as a country. We had -- there were 4 I was going to quickly mention. I mean, I love Rutherford. Rutherford's words were, "If we haven't got the money, we have to think." And then -- but Peter Blake said, "If it's not hard, it's not worthwhile doing." And more recently, we have put Jacinda's quote up, "They are us." But the one that I like the most -- well, perhaps I can't say the most. But one I was reflecting on this morning was this, and it was by Maurice Shadbolt. "What is he then, this human Kiwi who can climb Everest first or run the world's fastest mile, who can shear more sheep in a day than any other man in the world, who are offering themselves up for export, who can split the atom or send a rocket to Venus? A man of action then, yes, but a dream or 2." And I want to talk about this concept of dreaming because just as we had to wrestle with the change in the role of offices 20 years ago when we opened Vero in 2001, we're going through an enormous shift in the role of businesses and the workplace. Now COVID has brought on the concept and -- about what is the need for people to go into work. We're also going to be wrestling with what is the role of a CBD. Now we need to move fast and past the disruption we've got at the moment, but I think everyone in the room knows that the CBD will be, in another decade, an entirely different place than it used to be. And so -- and offices will be entirely different. And so the Board and executive of Kiwi, I'll use that word dream, but in a constructive sense, we dream about the future. And these were very good questions that you were posing today about upskilling the directors because, in fact, this business requires us all to puzzle and dream about what is society going to be in the future and how can we create its built form so that we can support it as it grows. And so offices are going to change. And the -- and as our CEO indicated, we're very -- we believe there will be a diversification of offices around the transport nodes and into the metropolitan hubs, and so we got the hub and spoke. And therefore -- and that's why at Sylvia Park, we are building office buildings. It was only 15 years ago that we started -- we opened Sylvia Park, 15 years ago. We bought -- again, you'll remember, before that, 20 years ago, it was old army sheds sitting there. There was nothing else there. Now right now, right today, after 15 years, the government has decided there are 10 metropolitan centers in Auckland, and they are the obvious ones. They're Takapuna and Albany and Westgate and Henderson and New Lynn, a new market, and Sylvia Park and Botany, Manukau and Papakura. So in 15 years, you have built a metropolitan center in 1 place. 15 years is an incredibly short period of time. And yet -- and we have only just started because the -- it will change. And we all get frustrated when we talk about a retail center. A metropolitan center or a mixed-use center, it will be entirely different in the future to what it is today that we met all the things that Clive has talked to you about and you see in our annual reports, that have diversification into all sorts of different activities. So I want to move forward and think about the next 15 years because in 15 years, out of those 10, this -- you are investing in the only group that is in the heart of 2 of those existing metropolitan centers, and that was Sylvia Park and LynnMall. And in another 10 years, you'll have Drury. There will be 11 metropolitan centers, and you will be investing in 3 of them. And you will be the only investor who has got a comprehensive view about a mixed-use development and is championing the evolution of those metropolitan centers for the community. The other -- none of the other centers have that commitment of a single investor who is looking over the horizon and thinking about what society wants and how to shape an asset to suit the needs of their children and grandchildren coming forward. And so I think in 15 years, which we will transition, we'll go past some of the short-term problems, and we've got to solve the dividend, I understand. But take heart, we are poised -- we've got some assets. And 15 years actually is a remarkably short period of time for Sylvia Park. And so I'm incredibly optimistic that this -- in that period, you will find Sylvia Park will be regarded as an exemplar of urban development. And governments and local governments might draw -- describe pictures of what they want. But finally, they won't -- the parties that will deliver those social outcomes and those community outcomes have to be the businesses invest and the people invest in those businesses, which is you. So hang in there. It's going to be a fun time. And for those of you that can be here in 15 years, I think you'll be incredibly proud of the assets that you own at that time. So thank you. It's been an amazing time. And I've had 3 amazing CEOs with Angus McNaughton, Chris Gudgeon and now Clive. Because, of course, as a Board, we do try and provide some direction, but the day-to-day activities are driven by management. You're totally dependent on the quality of the management team. And within the management group, we -- I have staff that joined us almost -- well, not quite 30 years ago. But certainly, we still have staff who have had -- have got more than 20 years working at Kiwi, just tremendous loyalty by everybody. The Board is a very -- it's a wonderful attitude we have on our Board, there's free and frank conversation, a robust debate and a great skill mix of people looking forward and shaping the organization. But fundamentally, at the end of the day, it's all about you. And as I look around the room, actually, it's almost as if this was the very first AGM. People like yourselves that joined us on the journey, and we're trying to make a difference and do high-quality buildings. I'm so proud that Kiwi is the very first organization to do -- report our carbon. We used to have the largest solar array in Sylvia Park, but we lead the way in our sustainability. And we're very aware of our social responsibilities as a group. So as you see, I've got my tie off. So unlike my colleagues, I'm in retirement. I'm going to be on your side shortly. So thank you. Thank you. Thank you. Stick with us. It's -- the assets are fantastic, and the opportunities are wonderful. Thank you very much.

I'm sure you can all see Richard's compelling enthusiasm and passion for this company, and we just cannot thank him enough. So Richard, thank you, and great words, well spoken. I'll now draw the event to a close. Thanks for your attendance and participation today. A copy of the presentation and our addresses are available on our website and also in the NZX website. So I thank you. I think I'm going to be cut off right now, and I'll hand back to MJ. Please don't all have one, but somebody can have a sausage roll for me. That will be good. So thank you and enjoy the day.

Cool. Thank you, Mark. So ladies and gentlemen, we will now serve drinks and light refreshments at the back of the room. And as Mark mentioned, we've got sausage rolls. The Board and management will be available if there's anything you'd like to discuss or ask about, and we look forward to catching up with you over a cup of tea or coffee shortly. Thank you very much. [Foreign Language]

Thank you.