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

<ul><li>Strong operational result but portfolio devaluations and reduced activity weighs on management fees</li><li>Balance sheet overhang largely put to bed: SPG's FY23 bank covenant gearing was 36.3% and we estimate c.39% including its capital commitments. </li><li>Focus moving back to asset management strategy execution: With the balance sheet under repair investor attention will shift back to progress on SPG's strategy of becoming a real estate asset manager which has also hit a speed bump.</li></ul>

Strong operational result but portfolio devaluations and reduced activity weighs on management feesBalance sheet overhang largely put to bed: SPG's FY23 bank covenant gearing was 36.3% and we estimate c.39% including its capital commitments. Focus moving back to asset management strategy execution: With the balance sheet under repair investor attention will shift back to progress on SPG's strategy of becoming a real estate asset manager which has also hit a speed bump.

Stride Property: FY23 Result — Steps in the Right Direction

<ul><li>Stride Property Group (SPG) delivered a solid FY23 result with adjusted funds from operations +3% to NZ$51.6m and in line with our expectations.</li><li>SPG recorded solid rent growth with no COVID abatements in the period and rent reviews delivering solid outcomes for balance sheet portfolio with Office +6% and Town Centre +8% for both CPI linked reviews and releasing.</li><li>Asset management income was -5% with higher base fees being offset by a drop off in activity fees.</li></ul>

Stride Property Group (SPG) delivered a solid FY23 result with adjusted funds from operations +3% to NZ$51.6m and in line with our expectations.SPG recorded solid rent growth with no COVID abatements in the period and rent reviews delivering solid outcomes for balance sheet portfolio with Office +6% and Town Centre +8% for both CPI linked reviews and releasing.Asset management income was -5% with higher base fees being offset by a drop off in activity fees.

Stride Property Group: 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>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

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: 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

Stride Property: FY23 Result — Steps in the Right Direction

SPG's balance sheet is being repaired with non-core assets either being marketed for sale or under contract to be sold; With gearing issues almost...

Forsyth Barr

Stride Property Group: FY23 Result – Initial Thoughts

SPG recorded solid rent growth with no COVID abatements in the period and rent reviews delivering solid outcomes for balance sheet portfolio 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

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

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