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>Property sector softer through reporting season: The NZ LPV sector was down -0.7% in May, outperforming the NZX50 which was down -1.7%.</li><li>Dust settles on May reporting season: Six property companies reported full year results in May. The results were broadly in line with our expectations as solid tenant demand continues to drive strong operational outcomes.</li><li>Sector valuation remains mixed: The property sector continues to look attractive relative to other yield stocks but still remains above its long-run valuation metrics relative to bond yields.</li></ul>

Property sector softer through reporting season: The NZ LPV sector was down -0.7% in May, outperforming the NZX50 which was down -1.7%.Dust settles on May reporting season: Six property companies reported full year results in May. The results were broadly in line with our expectations as solid tenant demand continues to drive strong operational outcomes.Sector valuation remains mixed: The property sector continues to look attractive relative to other yield stocks but still remains above its long-run valuation metrics relative to bond yields.

Real Estate Reflections: Reporting on Property

Equity Bottom-Up

Goodman Property Trust / Equity Bottom-Up

<ul><li>Strong industrial market underpins rental growth: GMT reported FY24 cash earnings +7% to NZ$99.6m.</li><li>Gearing tracking towards top end of range: GMT's committed gearing of 29.1% is at the upper end of its 20–30% target range but management indicated that gearing could go above target if opportunities arise or market conditions dictate</li><li>Valuation remains challenging as demand shows signs of softening</li></ul>

Strong industrial market underpins rental growth: GMT reported FY24 cash earnings +7% to NZ$99.6m.Gearing tracking towards top end of range: GMT's committed gearing of 29.1% is at the upper end of its 20–30% target range but management indicated that gearing could go above target if opportunities arise or market conditions dictateValuation remains challenging as demand shows signs of softening

Goodman Property Trust: Solid FY23 Result but Still Expensive

<ul><li>Goodman Property Trust (GMT) has reported a solid FY23 result, with cash earnings +7% yoy to NZ$99.6m, which was in line with our forecast but with slightly lower administrative and tax expenses offsetting higher than expected interest.</li><li>Auckland industrial has had another strong year; GMT believes its portfolio is now c.25% under-rented and achieved spreads of +23% vs. prior rents on leasing completed through the year.</li><li>Based on the lease rent review profile in FY24, we estimate lease events should lift underlying rents by c.8% through the year.</li></ul>

Goodman Property Trust (GMT) has reported a solid FY23 result, with cash earnings +7% yoy to NZ$99.6m, which was in line with our forecast but with slightly lower administrative and tax expenses offsetting higher than expected interest.Auckland industrial has had another strong year; GMT believes its portfolio is now c.25% under-rented and achieved spreads of +23% vs. prior rents on leasing completed through the year.Based on the lease rent review profile in FY24, we estimate lease events should lift underlying rents by c.8% through the year.

Goodman Property Trust: FY23 Result – Initial Thoughts

<ul><li>Flat month for the property sector: The NZ LPV sector was broadly flat in April, underperforming the NZX50G which was up +1.1%.</li><li>Looking ahead to the May reporting season: Low vacancy, solid tenant demand, and the high cost of new supply all continue to underpin solid rent growth.</li><li>Sector valuations track sideways: The property sector continues to look attractive relative to other yield stocks, however, spreads remain compressed when compared to long-term relationships to bond yields</li></ul>

Flat month for the property sector: The NZ LPV sector was broadly flat in April, underperforming the NZX50G which was up +1.1%.Looking ahead to the May reporting season: Low vacancy, solid tenant demand, and the high cost of new supply all continue to underpin solid rent growth.Sector valuations track sideways: The property sector continues to look attractive relative to other yield stocks, however, spreads remain compressed when compared to long-term relationships to bond yields

Real Estate Reflections: Gearing Up for Reporting Season

<ul><li>Property sector underperforms the broader market: The NZ LPV sector was down -1.2% in March, underperforming the NZX50G which was broadly flat.</li><li>Cap rates starting to creep higher: Goodman (GMT), Investore (IPL), Kiwi Property (KPG) and Stride (SPG) have all reported 2H23 valuation movements ahead of their full year results in May</li><li>Balance sheets remain in the spotlight: Portfolio valuation changes also lifted loan-to-value ratios</li></ul>

Property sector underperforms the broader market: The NZ LPV sector was down -1.2% in March, underperforming the NZX50G which was broadly flat.Cap rates starting to creep higher: Goodman (GMT), Investore (IPL), Kiwi Property (KPG) and Stride (SPG) have all reported 2H23 valuation movements ahead of their full year results in MayBalance sheets remain in the spotlight: Portfolio valuation changes also lifted loan-to-value ratios

Real Estate Reflections: Cap Rates Creep Higher

New Zealand

Goodman Property Trust is a property trust that invests in, manages and develope portfolio of diversified property assets in Auckland. The Trust's portfolio comprises of office, industrial and retail properties.

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Goodman Property Trust (GMT NZ)

Real Estate Reflections: Reporting on Property

The results of listed property vehicles (LPVs) that reported in May was largely in line with expectations; Strong tenant demand underpinned strong...

Forsyth Barr

Goodman Property Trust: Solid FY23 Result but Still Expensive

Goodman Property Trust (GMT) reported a solid FY23 result that was in line with our expectations; Upward reversion of rents to market levels and...

Forsyth Barr

Goodman Property Trust: FY23 Result – Initial Thoughts

Goodman Property Trust (GMT) has reported a solid FY23 result, with cash earnings +7% yoy to NZ$99.6m, which was in line with our forecast but with...

Forsyth Barr

Real Estate Reflections: Gearing Up for Reporting Season

April was a flat month for the listed property sector; Long-bond yields have been range bound for the last eight months, as tight yield spreads...

Forsyth Barr

Real Estate Reflections: Cap Rates Creep Higher

March was a mixed month for the property sector where interest rates are typically a key driver of LPV sector performance, but despite a -40bp fall...

Forsyth Barr

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