Glossary

KIP common terms explained

Accretive
A term that when used in conjunction with an asset or transaction implies a positive contribution to earnings.

Amortisation
The systematic and regular write-down of an asset over its projected life.

Capital expenditure
Expenditure on non-routine works to improve the value and/or performance of an asset.

Capitalisation rate
A market derived rate or yield applied to a property’s net income to determine its value at a specific date.

Distributable profit
Operating iprofit before income tax, less current tax, excluding rental income resulting from straight-lining fixed rental increases and other non-cash adjustments.

Distribution
The amount paid by the Trust to Unit Holders. The Trust pays distributions for the periods ended 31 March and 30 September. See Calendar of key dates for distribution dates.

Distribution reinvestment plan (DRP) 
The Trust's Distribution Reinvestment Plan dated 29 October 2008.  The plan provides Unit Holders with the option of reinvesting distributions without incurring any transaction costs.

Divestment
Sale of an asset.

DPU
Distribution per unit paid to Unit Holders.

Earnings per unit (EPU)
Calculated as profit after income tax for the period divided by the weighted average number of units on issue for that period, adjusted for the conversion of the Trust’s MCNs.

Imputation credits
Credits that represent tax paid by the Trust. By attaching imputation credits to distributions, the tax paid by the Trust effectively flows through to Unit Holders to offset any New Zealand tax liability.

Independent valuation
A valuation of a property undertaken by an independent registered valuer for the purposes of determining market value.

Internal rate of return (IRR)
The average annual total return from a property investment over a specified time period.

KIP and KIPGC
The New Zealand Stock Exchange (NZSX) codes for Kiwi Income Property Trust’s units (KIP) and 8.95% Mandatory Convertible Notes (KIPGC).

8.95% Mandatory Convertible Notes (2009 MCNs)
The Kiwi Income Property Trust unsecured subordinated mandatory convertible notes issued pursuant to the Offer Document dated 10 November 2009. The 2009 MCNs can be bought and sold on the NZSX.

Market capitalisation
The market value of the Trust calculated by multiplying the number of units on issue by the unit price (as quoted on the NZX).

Net absorption
The difference between the space supplied in a market and space leased in that market over a set time period.

Net lettable area (NLA)
The floor area of a building for which rent can be charged.

Net rental income
Represents gross rental income less property operating expenditure including the amortisation of lease incentives and rental income resulting from the straight-lining of fixed rental increases.

Net tangible asset backing (NTA)
The value of assets less all debts and other liabilities, normally divided by the number of units on issue and expressed as an amount per unit.

New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS)
Accounting standards approved by the New Zealand Accounting Standards Review Board which are required to be applied in the preparation and presentation of financial statements.

NZSX and NZX
The New Zealand Stock Exchange (NZSX) operated by the New Zealand Exchange (NZX).

NZX 10
Benchmark index produced by the New Zealand Exchange (NZX) comprising the top 10 companies listed on the NZSX by free-float market capitalisation.

NZX 50
Benchmark index produced by the New Zealand Exchange (NZX) comprising the top 50 companies listed on the NZSX by free-float market capitalisation.

Occupancy
The amount of space occupied measured against the total amount of space.

Over-renting
Where the contract rental being paid under the lease exceeds the market rent achievable on the open market.

Portfolio investment entity (PIE)
An entity, such as the Trust, that qualifies for the PIE tax regime introduced from 1 October 2007. Under this regime, no further New Zealand tax is payable by Unit Holders when they receive distributions from the Trust.

Record date
The date fixed by the Manager for determining Unit Holders’ entitlement to distributions and MCN Holders’ entitlement to interest payments.

Registrar
The Registrar is responsible for maintaining Unit and MCN Holder records. Contact details for the Trust’s registrar, Link Market Services Limited, are included under Contact us.

Rent review
A date stipulated in a lease at which the landlord and tenant review the contracted rental being paid under the lease.

Swap
An agreement involving two parties to exchange one entitlement for another. The Trust may enter into swaps to exchange a floating interest rate obligation with a fixed interest rate obligation.

The Manager
Kiwi Income Properties Limited is the Manager of the Trust. Please refer to the Corporate governance section for further details on the role of the Manager.

The Trust
Kiwi Income Property Trust. A unit trust registered under the unit Trusts act 1960 and governed by the terms of the Trust Deed.

Total return
The return to Unit Holders calculated by adding together the return on income (distribution) and the return on capital (unit price movement).

Trust deed
The Trust Deed under which Kiwi Income Property Trust was formed.

Trustee
The Trustee for Unit and MCN Holders in Kiwi Income Property Trust is New Zealand Permanent Trustees Limited. Please refer to the Corporate governance section for details on the role of the Trustee.

Under-renting
Where the contract rental being paid under the lease is less than the market rent achievable on the open market.

Unit
An undivided share in the equity of the Trust. All units carry equal voting rights and participate in distributions from the Trust. Units can be bought and sold on the NZSX.

Unit price
The price transacted for a unit in Kiwi Income Property Trust recorded by the NZSX.

Weighted average lease term (WALT)
The average lease term weighted by gross income.

Yield
The annual income of an asset expressed as a percentage of value, cost or purchase price.