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

Equity Bottom-Up

Vital Healthcare Property Trust / Equity Bottom-Up

<ul><li>Vital Healthcare (VHP) provided a largely uneventful 1H24 result, with a small adjusted funds from operation (AFFO) decline driven largely by higher interest costs and asset sales.</li><li>Over the last 12 months VHP has been busy selling non-core assets (c.NZ$220m) to help fund its development pipeline and support its balance sheet.</li><li>With c.NZ$210m to spend on committed developments and gearing close to its 40% top end, more work needs to be done. </li></ul>

Vital Healthcare (VHP) provided a largely uneventful 1H24 result, with a small adjusted funds from operation (AFFO) decline driven largely by higher interest costs and asset sales.Over the last 12 months VHP has been busy selling non-core assets (c.NZ$220m) to help fund its development pipeline and support its balance sheet.With c.NZ$210m to spend on committed developments and gearing close to its 40% top end, more work needs to be done. 

Vital Healthcare - 1H24 Result — Recycling for Growth

<ul><li>Following a turbulent few years the listed property sector had a solid year, returning +5.6% in 2023.</li><li>After a strong first-half of the year, proposed tax changes and higher long bond rates derailed the sector, before a drop in bond rates in the final quarter drove a strong finish to the year.</li><li>The sector lost some of these gains through January as long bond rates ticked higher on solid economic data.</li></ul>

Following a turbulent few years the listed property sector had a solid year, returning +5.6% in 2023.After a strong first-half of the year, proposed tax changes and higher long bond rates derailed the sector, before a drop in bond rates in the final quarter drove a strong finish to the year.The sector lost some of these gains through January as long bond rates ticked higher on solid economic data.

Real Estate Reflections - Five Themes for the Year Ahead

<ul><li>Vital Healthcare (VHP) announced its 1H24 revaluations which saw the value of its property portfolio decline by -4% or -NZ$145m.</li><li>This was driven by a +16 bps expansion in cap rate to 5.21%, with the share price implying cap rates will expand further.</li><li>The declines were larger in Australia (-5%) than NZ (-3%), which is a reversal of recent trends where NZ valuations reacted faster to higher interest rates. </li></ul>

Vital Healthcare (VHP) announced its 1H24 revaluations which saw the value of its property portfolio decline by -4% or -NZ$145m.This was driven by a +16 bps expansion in cap rate to 5.21%, with the share price implying cap rates will expand further.The declines were larger in Australia (-5%) than NZ (-3%), which is a reversal of recent trends where NZ valuations reacted faster to higher interest rates. 

Vital Healthcare - 1H24 Valuation Check-Up

<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

New Zealand

Vital Healthcare Property Trust is a property trust that invests in and manages healthcare facilities in New Zealand and Australia.

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Vital Healthcare Property Trust (VHP 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

Vital Healthcare - 1H24 Result — Recycling for Growth

Vital Healthcare (VHP) provided a largely uneventful 1H24 result, with a small adjusted funds from operation (AFFO) decline driven largely by...

Forsyth Barr

Real Estate Reflections - Five Themes for the Year Ahead

After a strong first-half of the year, proposed tax changes and higher long bond rates derailed the sector, before a drop in bond rates in the...

Forsyth Barr

Vital Healthcare - 1H24 Valuation Check-Up

Vital Healthcare (VHP) announced its 1H24 revaluations which saw the value of its property portfolio decline by -4% or -NZ$145m.

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

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