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>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

Equity Bottom-Up

Precinct Properties New Zealand / Equity Bottom-Up

<ul><li>We reinstate our rating on PCT at OUTPERFORM with a NZ$1.30/share 12 month target price.</li><li>Following the issuance of its convertible notes, PCT has one of the lowest geared balance sheets in the sector and has capital to invest in opportunities within its growing capital partnerships.</li><li>PCT has c.NZ$1.8bn (built value) of assets under management and believes it has a pathway to &gt;NZ$4.0bn, with the Auckland Downtown Carpark redevelopment a significant driver.</li></ul>

We reinstate our rating on PCT at OUTPERFORM with a NZ$1.30/share 12 month target price.Following the issuance of its convertible notes, PCT has one of the lowest geared balance sheets in the sector and has capital to invest in opportunities within its growing capital partnerships.PCT has c.NZ$1.8bn (built value) of assets under management and believes it has a pathway to &gt;NZ$4.0bn, with the Auckland Downtown Carpark redevelopment a significant driver.

Precinct Properties NZ - Growing the Partnerships

<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?

<ul><li>After seven months of outperforming the broader NZ market, the listed property sector experienced a sharp correction in August.</li><li>This was driven by both National and Labour proposing to remove structure depreciation for commercial landlords to part fund their respective election promises.</li><li>Given the depreciations changes are proposed by both major political parties, we have lowered our forecasts to reflect the high likelihood that the sector will be paying more tax from 1 April 2024. </li></ul>

After seven months of outperforming the broader NZ market, the listed property sector experienced a sharp correction in August.This was driven by both National and Labour proposing to remove structure depreciation for commercial landlords to part fund their respective election promises.Given the depreciations changes are proposed by both major political parties, we have lowered our forecasts to reflect the high likelihood that the sector will be paying more tax from 1 April 2024. 

Real Estate Reflections - Tax Man Coming for Commercial

<ul>
<li>Precinct Properties (PCT) is making an offer of up to NZ$150m of subordinated convertible notes (Notes) (plus the ability for PCT to issue an additional NZ$50m at PCT's discretion across the two series of Notes).</li>
<li>The Notes can be converted into ordinary PCT shares after fixed terms of three and four years (subject to a cash election).</li>
<li>The notes will pay a fixed rate of interest above the three and four year swap rates and, if the PCT share price is above the individual Notes strike price at the end of their term, convert (or be cash settled) at a premium to their face value. </li>
</ul>


Precinct Properties (PCT) is making an offer of up to NZ$150m of subordinated convertible notes (Notes) (plus the ability for PCT to issue an additional NZ$50m at PCT's discretion across the two series of Notes).
The Notes can be converted into ordinary PCT shares after fixed terms of three and four years (subject to a cash election).
The notes will pay a fixed rate of interest above the three and four year swap rates and, if the PCT share price is above the individual Notes strike price at the end of their term, convert (or be cash settled) at a premium to their face value. 


Precinct Properties NZ - Offer for up to NZ200m of Convertible Notes

New Zealand

Precinct Properties New Zealand Ltd. invests in manages and leases commercial office properties. The Company invests in properties in Auckland and Wellington.

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Precinct Properties New Zealand (PCT NZ)

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

Precinct Properties NZ - Growing the Partnerships

PCT has c.NZ$1.8bn (built value) of assets under management and believes it has a pathway to >NZ$4.0bn, with the Auckland Downtown Carpark...

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

Real Estate Reflections - Tax Man Coming for Commercial

After seven months of outperforming the broader NZ market, the listed property sector experienced a sharp correction in August.

Forsyth Barr

Precinct Properties NZ - Offer for up to NZ200m of Convertible Notes

The Notes can be converted into ordinary PCT shares after fixed terms of three and four years (subject to a cash election).

Forsyth Barr

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