According to Kiwi Income Property Trust, in the coming years, Auckland's and Wellington's office markets will experience pressure because vacancy rates have been increased by new buildings and they are exerting pressure on rents.

In the annual unit holder meeting, Chief Executive Manager of the trust, Chris Gudgeon said that in the next three years, significant amount of new offices will be developed in the office markets of Auckland and Wellington.

The current vacancy rate of Auckland is 13.3% and of Wellington is 6.1%; and it may increase in the coming two to three years. Currently, the vacancy rate within the trust sits below 5%.

According to the Chairman, Sean Wareing, being very cautious the trust was projecting a cash allocation for the year ending March 31, 2011 of nearly seven cents per unit, which represents an after tax yield of about 7.5% in a year at current unit prices for domestic investors.

Unitholders got to know that the trust had faced a reduction in portfolio value of 14% during the last two years because of which gains made by them were reversed during the two years prior to that.

"Looking ahead, it is important to note that the movement for the latest six-month period was a reduction of approximately only 0.5% of the portfolio value", said Mr. Gudgeon said.