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>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

<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>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

Equity Bottom-Up

<ul><li>Winton's (WIN) FY23 result was slightly below our expectations with lower unit prices and higher costs more than offsetting better than expected gross margins.</li><li>The highlight was strong pre-sales at Northbrook Wynyard where the sales suite opened two months ago.</li><li>We view this as validation of the Northbrook concept, and with Northbrook Wanaka to begin selling in September we expect further momentum. </li></ul>

Winton's (WIN) FY23 result was slightly below our expectations with lower unit prices and higher costs more than offsetting better than expected gross margins.The highlight was strong pre-sales at Northbrook Wynyard where the sales suite opened two months ago.We view this as validation of the Northbrook concept, and with Northbrook Wanaka to begin selling in September we expect further momentum. 

Winton Land - FY23 Result — Northbrook Momentum Building

<ul><li>Strong month for the property sector: The NZ LPV sector had a strong June, rising +3.7% and outperforming the NZX 50 which was up +0.8%. </li><li>A flurry of annual shareholder meetings: There were a number of annual shareholder meetings in June where FY24 distribution guidance was reiterated.</li><li>Mixed valuation signals: The property sector continues to look attractive relative to other yield stocks but fully priced vs. bond yields.</li></ul>

Strong month for the property sector: The NZ LPV sector had a strong June, rising +3.7% and outperforming the NZX 50 which was up +0.8%. A flurry of annual shareholder meetings: There were a number of annual shareholder meetings in June where FY24 distribution guidance was reiterated.Mixed valuation signals: The property sector continues to look attractive relative to other yield stocks but fully priced vs. bond yields.

Real Estate Reflections: Property Jumps Ahead of the Pack

New Zealand

Winton Land Limited operates as a real estate company. The Company develops resident lots, dwellings, apartments, and retirement units. Winton Land serves customers in New Zealand.

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Winton Land Ltd (WIN NZ)

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

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 - 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

Winton Land - FY23 Result — Northbrook Momentum Building

Winton's (WIN) FY23 result was slightly below our expectations with lower unit prices and higher costs more than offsetting better than expected...

Forsyth Barr

Real Estate Reflections: Property Jumps Ahead of the Pack

June was a strong month for the property sector despite a slight lift in long bond yields - NZ-listed property vehicles (LPVs) have now...

Forsyth Barr

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