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>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

Equity Bottom-Up

<ul><li>Revaluations see FY23 NTA of c.NZ$2/share: SPG's net book value is impacted by not only changes in its balance sheet portfolio but also the value of its co-investments</li><li>Gearing weighing on SPG's share price: SPG expects FY23 gearing to be 36%</li><li>SPG does have options to lower gearing: The slow reset of SPG's asset book values and its solid debt hedging position provides time to execute on debt reduction initiatives</li></ul>

Revaluations see FY23 NTA of c.NZ$2/share: SPG's net book value is impacted by not only changes in its balance sheet portfolio but also the value of its co-investmentsGearing weighing on SPG's share price: SPG expects FY23 gearing to be 36%SPG does have options to lower gearing: The slow reset of SPG's asset book values and its solid debt hedging position provides time to execute on debt reduction initiatives

<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>Looking at the unlisted property syndicate sector: Property syndicates have become increasingly popular over the last decade as falling interest rates have (1) driven strong commercial property asset returns, and (2) made alternative yield-focussed investment more attractive</li><li>Syndicates could be a source of distress this cycle: Our analysis is based on 24 syndicates where financial information is publicly available</li><li>Prior cycles have resulted in new listed entities: In prior commercial property downcycles onerous debt obligations resulted in the merger and listing of some underperforming syndicates</li></ul>

Looking at the unlisted property syndicate sector: Property syndicates have become increasingly popular over the last decade as falling interest rates have (1) driven strong commercial property asset returns, and (2) made alternative yield-focussed investment more attractiveSyndicates could be a source of distress this cycle: Our analysis is based on 24 syndicates where financial information is publicly availablePrior cycles have resulted in new listed entities: In prior commercial property downcycles onerous debt obligations resulted in the merger and listing of some underperforming syndicates

Property Insights: Syndicates — All in This Together

<ul><li>Dust settles on February reporting season: Four property companies reported in February; Precinct Properties (PCT), Property for Industry (PFI), Winton (WIN) and Vital Healthcare (VHP). </li><li>Solid month for the property sector: The NZ LPV sector was up +1.6% in February, outperforming the NZX50 which was down -0.6%</li><li>Relative valuations looking attractive but only back to fairer value vs bond yields</li></ul>

Dust settles on February reporting season: Four property companies reported in February; Precinct Properties (PCT), Property for Industry (PFI), Winton (WIN) and Vital Healthcare (VHP). Solid month for the property sector: The NZ LPV sector was up +1.6% in February, outperforming the NZX50 which was down -0.6%Relative valuations looking attractive but only back to fairer value vs bond yields

Real Estate Reflections: Refurbishing the Monthly

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.

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Stride Property (SPG NZ)

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

Stride Property: Walking Back the Debt

Stride Property's (SPG) high gearing is weighing on its share price with the perceived risk of a potential capital raising; At its 1H23 result SPG...

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

Property Insights: Syndicates — All in This Together

Our discussions with commercial property market participants highlighted syndicates as a particular area of concern in the current higher interest...

Forsyth Barr

Real Estate Reflections: Refurbishing the Monthly

Listed property companies that reported in February saw strong operational results; While results were broadly in line with our expectations, we...

Forsyth Barr

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