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.

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

Thematic (Sector/Industry)

<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

<ul><li>Strong rental growth offsets the impact of cap rate softening on asset valuations</li><li>Asset valuation spreads to long term bond yields remain compressed</li><li>Benchmark for other listed portfolio valuations: GMT, KPG and PFI have all now provided the outcome of independent portfolio revaluations​​​​​​​ within the last three-months</li></ul>

Strong rental growth offsets the impact of cap rate softening on asset valuationsAsset valuation spreads to long term bond yields remain compressedBenchmark for other listed portfolio valuations: GMT, KPG and PFI have all now provided the outcome of independent portfolio revaluations​​​​​​​ within the last three-months

Goodman Property Trust: Cap Rates on the Rise

New Zealand

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

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

Kiwi Property Group Ltd is a property trust that invests in, manages and develops a portfolio of diversified properties throughout New Zealand. The Trust's properties include office, retail and industrial properties.

Property for Industry Limited is a property company that invests in New Zealand industrial properties. The Company's property portfolio includes sites in Auckland, Hamilton, Tauranga, Wellington and Christchurch.

Argosy Property Limited invests in and manages retail, commercial and industrial properties in New Zealand.

Stride Stapled Group operates as a real estate investment company. The Company invests in a portfolio of places with enduring demand, as well as acquires retail properties. Stride Stapled conducts business in 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.

Asset Plus Limited carries on the business of a property company that invests in and manages commercial, industrial and retail properties. The Company's investment property portfolio consists of retail, commercial, and industrial properties located in New Zealand.

CDL Investments New Zealand Limited operates as a property investment and development company.  The Company, through its subsidiaries, provide land-based investment and development, management and the provision of property services. CDL Investments New Zealand serves clients in New Zealand.

Japan Prime Realty Investment Corporation is a real estate investment trust (REIT) which mainly invests in office buildings and commercial-use facilities nationwide.

Retail Opportunity Investments Corp. is a fully integrated and self-managed real estate investment trust ("REIT").  The Company specializes in the acquisition, ownership and management of necessity-based community, and neighborhood shopping centers in the western and eastern regions of the United States anchored by national and regional supermarkets and drugstores.

Retail Opportunity Investments Corp. (ROIC US)

Industrial & Infrastructure Fund Investment Corporation is a a real estate investment trust (REIT). The Company invests in real estate properties such as facilities for industry and infrastructure institution.

Industrial & Infrastructure Fund Investment (3249 JP)

Industrial & Infrastructure Fund Investment

Nippon Accommodations Fund Inc. is a real estate investment trust (REIT), which invests in income producing properties.  The Company invests in residential buildings.

SPH REIT is a Singapore-based REIT established principally to invest, directly or indirectly, in a portfolio of income-producing real estate which is used primarily for retail purposes in Asia-Pacific, as well as real estate-related assets.

Equity Commonwealth is a real estate investment trust, or REIT. The Company primarily owns office buildings located in Central Business District and suburban areas of major metropolitan markets in the United States, and has a large concentration of properties leased to the U.S. Government and medical related tenants. Equity CommonWealth also owns industrial lands in Hawaii.

Activia Properties, Inc. is a real estate investment trust (J-REIT). The company mainly invests in commercial and office buildings in the Tokyo metropolitan area.

DiamondRock Hospitality Company is a self-advised real estate investment trust. The Company owns, acquires, and invests in upper scale and upscale hotel properties located in North America.  DiamondRock also invests in premium limited-service and extended-stay hotel properties in urban locations.

Sunstone Hotel Investors, Inc. is a hospitality and lodging real estate investment trust that owns primarily upper scale and upscale hotels in the United States. The Company's hotels are operated under various branded names.

Empire State Realty Trust Inc. is a real estate investment trust. The trust owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area.

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)

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

Goodman Property Trust: Cap Rates on the Rise

Goodman Property Trust's (GMT) FY23 valuations have resulted in a preliminary -5% reduction in the fair value of its property assets; A +60bp...

Forsyth Barr

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