New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Thematic (Sector/Industry)

<ul><li>The listed property sector had a weak month in February, continuing a challenging start to 2024.</li><li>Listed property vehicles (LPVs) that reported in February came broadly in-line with expectations, with higher corporate costs and lower net interest costs being the key differences to our forecasts.</li><li>While operational metrics remain solid there were signs of slowing market rent growth. </li></ul>

The listed property sector had a weak month in February, continuing a challenging start to 2024.Listed property vehicles (LPVs) that reported in February came broadly in-line with expectations, with higher corporate costs and lower net interest costs being the key differences to our forecasts.While operational metrics remain solid there were signs of slowing market rent growth. 

Real Estate Reflections - A Challenging Start to the Year

<ul><li>Following a torrid few months, a fall in long bond rates provided relief for the property sector in November.</li><li>1H24 results were generally uneventful, with the major surprise being Investore (IPL) cutting its dividend ahead of the tax changes next year.</li><li>We expect a few others will follow suit when guidance for FY25 is issued in May. On the positive side, Auckland Council approved the sale of the Downtown Carpark to Precinct (PCT). </li></ul>

Following a torrid few months, a fall in long bond rates provided relief for the property sector in November.1H24 results were generally uneventful, with the major surprise being Investore (IPL) cutting its dividend ahead of the tax changes next year.We expect a few others will follow suit when guidance for FY25 is issued in May. On the positive side, Auckland Council approved the sale of the Downtown Carpark to Precinct (PCT). 

Real Estate Reflections - On the Interest Rate Roller Coaster

Equity Bottom-Up

<ul><li>Asset Plus (APL) reported a slight loss for 1H24; but it is largely irrelevant, with the market's focus on the sell down of the final assets in the vehicle and a potential capital return.</li><li>Munroe Lane, APL's last asset not contracted for sale, is now complete but leasing of the 36% vacant space remains challenging.</li><li>With the settlement of Graham St now in November 2024, APL has some time on its side to lease up Munroe Lane to maximise its value on sale. </li></ul>

Asset Plus (APL) reported a slight loss for 1H24; but it is largely irrelevant, with the market's focus on the sell down of the final assets in the vehicle and a potential capital return.Munroe Lane, APL's last asset not contracted for sale, is now complete but leasing of the 36% vacant space remains challenging.With the settlement of Graham St now in November 2024, APL has some time on its side to lease up Munroe Lane to maximise its value on sale. 

Asset Plus - 1H24 Result — Leasing Up to Sell Down

<ul><li>It has been a bleak couple of months for the listed property sector.</li><li>The one-two punch of the proposed tax changes and higher for longer interest rates has seen the sector sell off -14% over the last three months.</li><li>This was the fourth largest three month correction since 1996, behind only the Asian debt crisis, the rapid rate hiking cycle in June last year, and the start of the COVID pandemic. </li></ul>

It has been a bleak couple of months for the listed property sector.The one-two punch of the proposed tax changes and higher for longer interest rates has seen the sector sell off -14% over the last three months.This was the fourth largest three month correction since 1996, behind only the Asian debt crisis, the rapid rate hiking cycle in June last year, and the start of the COVID pandemic. 

Real Estate Reflections - The Storm Before the Storm

<ul><li>It hasn't been a great couple of months for the property sector. After being hit with political promises of higher taxes in August, rising interest rates saw the sector sell off in September.</li><li>With the NZ 10 year Government bond yield now c.5.5%, sector valuation metrics, which already looked full versus history, have come sharply back into focus.</li><li>Persistently high interest rates remain a headwind for the sector, particularly given higher taxes and interest costs are likely to see dividends cut (we forecast -3% on average by FY26). </li></ul>

It hasn't been a great couple of months for the property sector. After being hit with political promises of higher taxes in August, rising interest rates saw the sector sell off in September.With the NZ 10 year Government bond yield now c.5.5%, sector valuation metrics, which already looked full versus history, have come sharply back into focus.Persistently high interest rates remain a headwind for the sector, particularly given higher taxes and interest costs are likely to see dividends cut (we forecast -3% on average by FY26). 

Real Estate Reflections - Here We Go Again?

New Zealand

Asset Plus Limited carries on the business of a property company that invests in and manages commercial, industrial and retail properties. The Company's investment property portfolio consists of retail, commercial, and industrial properties located in New Zealand.

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Asset Plus (APL NZ)

Real Estate Reflections - A Challenging Start to the Year

Listed property vehicles (LPVs) that reported in February came broadly in-line with expectations, with higher corporate costs and lower net...

Forsyth Barr

Real Estate Reflections - On the Interest Rate Roller Coaster

1H24 results were generally uneventful, with the major surprise being Investore (IPL) cutting its dividend ahead of the tax changes next year.

Forsyth Barr

Asset Plus - 1H24 Result — Leasing Up to Sell Down

Asset Plus (APL) reported a slight loss for 1H24; but it is largely irrelevant, with the market's focus on the sell down of the final assets in...

Forsyth Barr

Real Estate Reflections - The Storm Before the Storm

The one-two punch of the proposed tax changes and higher for longer interest rates has seen the sector sell off -14% over the last three months.

Forsyth Barr

Real Estate Reflections - Here We Go Again?

It hasn't been a great couple of months for the property sector. After being hit with political promises of higher taxes in August, rising interest...

Forsyth Barr

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