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

<ul><li>Investore (IPL) reported a soft (as expected) 1H25 result. Adjusted funds from operations (AFFO) fell -12% in 1H25, as top line growth was more than offset by higher debt costs and a higher effective tax rate, as changes to building depreciation rules took effect.</li><li>IPL is taking steps to improve its portfolio, moving away from regional assets with higher capex requirements, towards newer Auckland assets with better growth profiles. However, gearing is above its target range.</li><li>As such, new acquisitions will need to be funded via divestment of non-core assets. While IPL is offering an attractive yield (8.8%) this remains in line with its historic relationship to long-term bond rates. NEUTRAL.</li></ul>

Investore (IPL) reported a soft (as expected) 1H25 result. Adjusted funds from operations (AFFO) fell -12% in 1H25, as top line growth was more than offset by higher debt costs and a higher effective tax rate, as changes to building depreciation rules took effect.IPL is taking steps to improve its portfolio, moving away from regional assets with higher capex requirements, towards newer Auckland assets with better growth profiles. However, gearing is above its target range.As such, new acquisitions will need to be funded via divestment of non-core assets. While IPL is offering an attractive yield (8.8%) this remains in line with its historic relationship to long-term bond rates. NEUTRAL.

Investore - 1H25 Result — No Change to the ’Store-Y

<ul><li>Investore (IPL) announced the sale of two regional supermarket assets and the purchase of Bunnings Westgate.</li><li>We view this transaction as positive, given: (1) the two assets sales were in line with current book values, (2) the portfolio is improved by swapping two older regional assets, with higher capex requirements, for a well-located new build with a more attractive lease structure, and (3) all with a minor impact on earnings. </li><li>The transaction does little to appease balance sheet pressure, but we are comfortable with higher gearing given the stage of the cycle. </li></ul>

Investore (IPL) announced the sale of two regional supermarket assets and the purchase of Bunnings Westgate.We view this transaction as positive, given: (1) the two assets sales were in line with current book values, (2) the portfolio is improved by swapping two older regional assets, with higher capex requirements, for a well-located new build with a more attractive lease structure, and (3) all with a minor impact on earnings. The transaction does little to appease balance sheet pressure, but we are comfortable with higher gearing given the stage of the cycle. 

Thematic (Sector/Industry)

<ul><li>October was a solid month for NZ listed property vehicles (LPVs).</li><li>The Fast-track Approvals Bill breathed some life into Winton's (WIN) Sunfield project, after having its initial approval pathway declined, while Kiwi Property's (KPG) Drury development and Precinct's (PCT) downtown carpark project were both included in the bill.</li><li>Six companies are reporting interim results in November, where we expect higher interest and tax bills to outweigh top-line rental growth across most of the sector. </li></ul>

October was a solid month for NZ listed property vehicles (LPVs).The Fast-track Approvals Bill breathed some life into Winton's (WIN) Sunfield project, after having its initial approval pathway declined, while Kiwi Property's (KPG) Drury development and Precinct's (PCT) downtown carpark project were both included in the bill.Six companies are reporting interim results in November, where we expect higher interest and tax bills to outweigh top-line rental growth across most of the sector. 

Real Estate Reflections - Fast Track to Reporting Season

<ul><li>Following a historically strong two months in July and August, the NZ listed property vehicles (LPVs) gave back some of their gains in September.</li><li>We continue to expect the sector to perform well in what is likely to be a period of sustained interest rate cuts.</li><li>There will be some bumps along the way, as prior cycles have shown weak economic activity eventually flows through to higher vacancy and lower rents. </li></ul>

Following a historically strong two months in July and August, the NZ listed property vehicles (LPVs) gave back some of their gains in September.We continue to expect the sector to perform well in what is likely to be a period of sustained interest rate cuts.There will be some bumps along the way, as prior cycles have shown weak economic activity eventually flows through to higher vacancy and lower rents. 

Real Estate Reflections - Snakes and Ladders

<div><div><div><div><ul><li>August was another strong month for listed property vehicles (LPV) as the RBNZ cut the official cash rate mid-month.</li><li>Over the last two months the sector has returned +13%. This is the largest two month return since August 2009 (+12%).</li><li>Reported results and forward guidance delivered during the month were largely in line with expectations, though some outlook comments were tempered by the economic backdrop.</li></ul></div></div></div></div>

August was another strong month for listed property vehicles (LPV) as the RBNZ cut the official cash rate mid-month.Over the last two months the sector has returned +13%. This is the largest two month return since August 2009 (+12%).Reported results and forward guidance delivered during the month were largely in line with expectations, though some outlook comments were tempered by the economic backdrop.

Real Estate Reflections - Road to Recovery

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.

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Investore Property (IPL NZ)

Investore - 1H25 Result — No Change to the ’Store-Y

Adjusted funds from operations (AFFO) fell -12% in 1H25, as top line growth was more than offset by higher debt costs and a higher effective tax rate

Forsyth Barr

Investore - A Bit of DIY

We have adjusted our forecasts for both this transaction and the lower forward interest rate track. We now forecast IPL to deliver c.+2% per year...

Forsyth Barr

Real Estate Reflections - Fast Track to Reporting Season

Our preferred LPVs are hospital landlord Vital Healthcare (VHP) and premium office owner PCT. We are also OUTPERFORM rated on Asset Plus (APL)...

Forsyth Barr

Real Estate Reflections - Snakes and Ladders

Following a historically strong two months in July and August, the NZ listed property vehicles (LPVs) gave back some of their gains in September.

Forsyth Barr

Real Estate Reflections - Road to Recovery

August was another strong month for listed property vehicles (LPV) as the RBNZ cut the official cash rate mid-month. Over the last two months the...

Forsyth Barr

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