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>Following a turbulent few years the listed property sector had a solid year, returning +5.6% in 2023.</li><li>After a strong first-half of the year, proposed tax changes and higher long bond rates derailed the sector, before a drop in bond rates in the final quarter drove a strong finish to the year.</li><li>The sector lost some of these gains through January as long bond rates ticked higher on solid economic data.</li></ul>

Following a turbulent few years the listed property sector had a solid year, returning +5.6% in 2023.After a strong first-half of the year, proposed tax changes and higher long bond rates derailed the sector, before a drop in bond rates in the final quarter drove a strong finish to the year.The sector lost some of these gains through January as long bond rates ticked higher on solid economic data.

Real Estate Reflections - Five Themes for the Year Ahead

<ul><li>It has been a bleak couple of months for the listed property sector.</li><li>The one-two punch of the proposed tax changes and higher for longer interest rates has seen the sector sell off -14% over the last three months.</li><li>This was the fourth largest three month correction since 1996, behind only the Asian debt crisis, the rapid rate hiking cycle in June last year, and the start of the COVID pandemic. </li></ul>

It has been a bleak couple of months for the listed property sector.The one-two punch of the proposed tax changes and higher for longer interest rates has seen the sector sell off -14% over the last three months.This was the fourth largest three month correction since 1996, behind only the Asian debt crisis, the rapid rate hiking cycle in June last year, and the start of the COVID pandemic. 

Real Estate Reflections - The Storm Before the Storm

<ul><li>It hasn't been a great couple of months for the property sector. After being hit with political promises of higher taxes in August, rising interest rates saw the sector sell off in September.</li><li>With the NZ 10 year Government bond yield now c.5.5%, sector valuation metrics, which already looked full versus history, have come sharply back into focus.</li><li>Persistently high interest rates remain a headwind for the sector, particularly given higher taxes and interest costs are likely to see dividends cut (we forecast -3% on average by FY26). </li></ul>

It hasn't been a great couple of months for the property sector. After being hit with political promises of higher taxes in August, rising interest rates saw the sector sell off in September.With the NZ 10 year Government bond yield now c.5.5%, sector valuation metrics, which already looked full versus history, have come sharply back into focus.Persistently high interest rates remain a headwind for the sector, particularly given higher taxes and interest costs are likely to see dividends cut (we forecast -3% on average by FY26). 

Real Estate Reflections - Here We Go Again?

<ul><li>After seven months of outperforming the broader NZ market, the listed property sector experienced a sharp correction in August.</li><li>This was driven by both National and Labour proposing to remove structure depreciation for commercial landlords to part fund their respective election promises.</li><li>Given the depreciations changes are proposed by both major political parties, we have lowered our forecasts to reflect the high likelihood that the sector will be paying more tax from 1 April 2024. </li></ul>

After seven months of outperforming the broader NZ market, the listed property sector experienced a sharp correction in August.This was driven by both National and Labour proposing to remove structure depreciation for commercial landlords to part fund their respective election promises.Given the depreciations changes are proposed by both major political parties, we have lowered our forecasts to reflect the high likelihood that the sector will be paying more tax from 1 April 2024. 

Real Estate Reflections - Tax Man Coming for Commercial

Equity Bottom-Up

Vital Healthcare Property Trust / Equity Bottom-Up

<ul><li>VHP reported a solid FY23 result underpinned by acquisitions, development completions and CPI linked rent growth.</li><li>Higher than expected tax was the key variation to our forecasts.</li><li>While FY24 DPS guidance was slightly disappointing it is a minimum, and the timing and value of asset sales could provide upside. </li></ul>

VHP reported a solid FY23 result underpinned by acquisitions, development completions and CPI linked rent growth.Higher than expected tax was the key variation to our forecasts.While FY24 DPS guidance was slightly disappointing it is a minimum, and the timing and value of asset sales could provide upside. 

Vital Healthcare - FY23 Result — Busy Developing

New Zealand

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

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Vital Healthcare Property Trust (VHP NZ)

Real Estate Reflections - Five Themes for the Year Ahead

After a strong first-half of the year, proposed tax changes and higher long bond rates derailed the sector, before a drop in bond rates in the...

Forsyth Barr

Real Estate Reflections - The Storm Before the Storm

The one-two punch of the proposed tax changes and higher for longer interest rates has seen the sector sell off -14% over the last three months.

Forsyth Barr

Real Estate Reflections - Here We Go Again?

It hasn't been a great couple of months for the property sector. After being hit with political promises of higher taxes in August, rising interest...

Forsyth Barr

Real Estate Reflections - Tax Man Coming for Commercial

After seven months of outperforming the broader NZ market, the listed property sector experienced a sharp correction in August.

Forsyth Barr

Vital Healthcare - FY23 Result — Busy Developing

VHP reported a solid FY23 result underpinned by acquisitions, development completions and CPI linked rent growth. Higher than expected tax was the...

Forsyth Barr

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