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>Upcoming results should highlight robust portfolio occupancy, continued rent growth, declining debt costs, and improved distributions in FY26.</li><li>The NZ listed property sector continued its relative outperformance, with high yields deemed sustainable and valuations at attractive levels.</li><li>Solid net rental income growth is expected, but higher leasing incentives and maintenance capex may weigh on earnings.</li></ul>

Upcoming results should highlight robust portfolio occupancy, continued rent growth, declining debt costs, and improved distributions in FY26.The NZ listed property sector continued its relative outperformance, with high yields deemed sustainable and valuations at attractive levels.Solid net rental income growth is expected, but higher leasing incentives and maintenance capex may weigh on earnings.

Real Estate Reflections - Attractive Valuations

<ul><li>The Property sector accounts for around 37% of global carbon dioxide emissions, with variations in sustainability progress across New Zealand's listed property companies.</li><li>Disclosures broadly meet regulatory requirements but often lack a clear narrative on how climate risks and opportunities may affect future outlooks.</li><li>Greenhouse gas inventories reflect the maturity of reporting practices more than climate transition risks, with inconsistencies in Scope 3 emissions reporting.</li></ul>

The Property sector accounts for around 37% of global carbon dioxide emissions, with variations in sustainability progress across New Zealand's listed property companies.Disclosures broadly meet regulatory requirements but often lack a clear narrative on how climate risks and opportunities may affect future outlooks.Greenhouse gas inventories reflect the maturity of reporting practices more than climate transition risks, with inconsistencies in Scope 3 emissions reporting.

Insights from Climate Disclosures Property Sector

<ul>
<li>January was a solid start to 2025 for the listed property sector.</li>
<li>While we had expected 2024 to be an inflection year for the sector, sticky inflation and higher-for-longer interest rates had other ideas.</li>
<li>We still remain constructive on the sector in 2025. </li>
</ul>


January was a solid start to 2025 for the listed property sector.
While we had expected 2024 to be an inflection year for the sector, sticky inflation and higher-for-longer interest rates had other ideas.
We still remain constructive on the sector in 2025. 


Real Estate Reflections - Five Themes for 2025

Macroeconomics

<ul><li>November was a soft month for the property sector as interest rate volatility continued.</li><li>1H25 results were largely as expected with most companies seeing: (1) slight vacancy rise, softening tenant demand and slowing market rent growth, reflecting the economic backdrop, (2) debt costs beginning to decline, and (3) asset values and cap rates stabilising. We expect these themes will continue to play out over the next year.</li><li>While the property sector continues to trade at compressed spreads to long-bond yields, it is trading on wider yields than some defensive peers and a lower earnings multiple than the broader market. </li></ul>

November was a soft month for the property sector as interest rate volatility continued.1H25 results were largely as expected with most companies seeing: (1) slight vacancy rise, softening tenant demand and slowing market rent growth, reflecting the economic backdrop, (2) debt costs beginning to decline, and (3) asset values and cap rates stabilising. We expect these themes will continue to play out over the next year.While the property sector continues to trade at compressed spreads to long-bond yields, it is trading on wider yields than some defensive peers and a lower earnings multiple than the broader market. 

Real Estate Reflections - From One Cycle to the Next

Equity Bottom-Up

<ul><li>Investore (IPL) reported a soft (as expected) 1H25 result. Adjusted funds from operations (AFFO) fell -12% in 1H25, as top line growth was more than offset by higher debt costs and a higher effective tax rate, as changes to building depreciation rules took effect.</li><li>IPL is taking steps to improve its portfolio, moving away from regional assets with higher capex requirements, towards newer Auckland assets with better growth profiles. However, gearing is above its target range.</li><li>As such, new acquisitions will need to be funded via divestment of non-core assets. While IPL is offering an attractive yield (8.8%) this remains in line with its historic relationship to long-term bond rates. NEUTRAL.</li></ul>

Investore (IPL) reported a soft (as expected) 1H25 result. Adjusted funds from operations (AFFO) fell -12% in 1H25, as top line growth was more than offset by higher debt costs and a higher effective tax rate, as changes to building depreciation rules took effect.IPL is taking steps to improve its portfolio, moving away from regional assets with higher capex requirements, towards newer Auckland assets with better growth profiles. However, gearing is above its target range.As such, new acquisitions will need to be funded via divestment of non-core assets. While IPL is offering an attractive yield (8.8%) this remains in line with its historic relationship to long-term bond rates. NEUTRAL.

Investore - 1H25 Result — No Change to the ’Store-Y

New Zealand

Investore Property Limited operates as a real estate investment company. The Company invests in retail property assets. Investore Property also provides leasing services. Investore Property serves clients in New Zealand.

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Investore Property (IPL NZ)

Real Estate Reflections - Attractive Valuations

Upcoming results should highlight robust portfolio occupancy, continued rent growth, declining debt costs, and improved distributions in FY26.

Forsyth Barr

Insights from Climate Disclosures Property Sector

The Property sector accounts for around 37% of global carbon dioxide emissions, with variations in sustainability progress across New Zealand's...

Forsyth Barr

Real Estate Reflections - Five Themes for 2025

While we had expected 2024 to be an inflection year for the sector, sticky inflation and higher-for-longer interest rates had other ideas.

Forsyth Barr

Real Estate Reflections - From One Cycle to the Next

While the property sector continues to trade at compressed spreads to long-bond yields, it is trading on wider yields than some defensive peers and...

Forsyth Barr

Investore - 1H25 Result — No Change to the ’Store-Y

Adjusted funds from operations (AFFO) fell -12% in 1H25, as top line growth was more than offset by higher debt costs and a higher effective tax rate

Forsyth Barr

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