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

Vital Healthcare Property Trust / Equity Bottom-Up

<ul><li>Solid operational result: VHP reported 1H23 adjusted funds from operations (AFFO) of NZ$37.7m which was just below our forecasts due to lower performance fee add back</li><li>Healthy porfolio metrics: VHP's portfolio metrics remain strong with 98.4% occupancy and a WALT of 17.2 years</li><li>Assets sales to fund the development pipeline: Given current market conditions, VHP is focussed on the completion of its NZ$510m (NZ$369m remaining to spend) development pipeline</li></ul>

Solid operational result: VHP reported 1H23 adjusted funds from operations (AFFO) of NZ$37.7m which was just below our forecasts due to lower performance fee add backHealthy porfolio metrics: VHP's portfolio metrics remain strong with 98.4% occupancy and a WALT of 17.2 yearsAssets sales to fund the development pipeline: Given current market conditions, VHP is focussed on the completion of its NZ$510m (NZ$369m remaining to spend) development pipeline

Vital Healthcare: 1H23 — Also in the Waiting Room

Thematic (Sector/Industry)

<ul>
<li>Last year was a turbulent time for listed property vehicles (LPVs) - the sector was down -26% in the year as it adjusted to the higher interest rate environment</li>
<li>Valuations remain above historical relationships with bond yields, and the growth outlook has moderated</li>
<li>The sector is trading c-30% below its net asset backing but we consider this largely priced in.</li>
</ul>


Last year was a turbulent time for listed property vehicles (LPVs) - the sector was down -26% in the year as it adjusted to the higher interest rate environment
Valuations remain above historical relationships with bond yields, and the growth outlook has moderated
The sector is trading c-30% below its net asset backing but we consider this largely priced in.


Real Estate Reflections: Five Themes for the Year Ahead

<ul><li><p>NZ drives asset devaluation: VHP expects a 1H23 devaluation of -NZ$65m or c.10cps</p></li><li>One development paused, another one started: VHP is pausing its A$99m Tasman medical centre which was a low yield (4.5%) fund-through project</li><li>Asset sales to manage gearing: VHP expects to divest NZ$200m of non core assets.</li></ul>

NZ drives asset devaluation: VHP expects a 1H23 devaluation of -NZ$65m or c.10cpsOne development paused, another one started: VHP is pausing its A$99m Tasman medical centre which was a low yield (4.5%) fund-through projectAsset sales to manage gearing: VHP expects to divest NZ$200m of non core assets.

Vital Healthcare: Improving Its Vital Signs

<ul><li>1H23 listed property results highlighted solid operational outcomes, but we are starting to see higher interest rates impact forward earnings expectations and capital management strategies</li><li>Development is being delayed, non-core assets sold and distribution growth moderated</li><li>While results were generally in line with our expectations, we lowered our earnings and dividend forecasts for most of the sector</li></ul>

1H23 listed property results highlighted solid operational outcomes, but we are starting to see higher interest rates impact forward earnings expectations and capital management strategiesDevelopment is being delayed, non-core assets sold and distribution growth moderatedWhile results were generally in line with our expectations, we lowered our earnings and dividend forecasts for most of the sector

Real Estate Reflections: Adjusting to a Higher Rates Environment

<ul><li>High interest rates and low transactions volumes has created uncertainty around commercial property valuations</li><li>Our analysis suggests that most property balance sheets can withstand a significant decrease in asset values with Argosy (ARG), Goodman Trust (GMT), and Property for Industry (PFI) the most resilient given low current gearing and/or limited capital commitments.</li><li>Kiwi Property (KPG), Stride (SPG), and Vital Healthcare (VHP) have the least resilient balance sheets owing to either higher initial gearing and/or significant capital commitments</li></ul>

High interest rates and low transactions volumes has created uncertainty around commercial property valuationsOur analysis suggests that most property balance sheets can withstand a significant decrease in asset values with Argosy (ARG), Goodman Trust (GMT), and Property for Industry (PFI) the most resilient given low current gearing and/or limited capital commitments.Kiwi Property (KPG), Stride (SPG), and Vital Healthcare (VHP) have the least resilient balance sheets owing to either higher initial gearing and/or significant capital commitments

New Zealand

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.

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

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.

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.

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.

AIMS APAC REIT is a real estate investment trust. The Trust's principal investment objective is owning and investing in a diversified portfolio of income-producing industrial real estate assets throughout Asia Pacific, including warehousing and logistics, manufacturing, business parks and hi-tech spaces.

Cromwell Property Group is a property and funds manager. The Company, through its subsidiary, provides funds management, property transactions, property and facilities management, finance, compliance, debenture issues, and debt management.

Ichigo Office REIT Investment Corporation is a real estate investment trust (J-REIT). The Company mainly invests in office buildings in major cities in Japan. The REIT merged with FC Residential Investment Corporation in 2005.

Ichigo Office REIT Investment Corporation (8975 JP)

Ichigo Office REIT Investment Corporation

CPN Retail Growth Leasehold REIT is a closed-end fund incorporated in Thailand. The Fund invests in shopping complex projects: Central Plaza Rama II, Central Plaza Ratchada-Rama II, & Central Plaza Pinklao.

CPN Retail Growth Leasehold REIT (CPNREIT TB)

Tesco Lotus Retail Growth Freehold & Leasehold Property Fund is a closed-end fund incorporated in Thailand. The Fund's objective is to achieve good returns. The Fund invests in freehold & leasehold of 17 shopping malls anchored by a Tesco Lotus hypermarket in cities including Bangkok and tourist destinations such as Krabi.

Whitestone REIT is a real estate investment trust.  The Trust invests in and operates retail, industrial and office properties.

Cathay No.1 REIT is a property trust established in Taiwan by Cathay Financial Holding Co. The Company purchases and leases a portfolio of commercial properties in Taipei.

Hudson Pacific Properties Inc. is a real estate company focusing on owning, operating, and acquiring office properties.  The Company focuses on opportunities in Northern and Southern California.

Starhill Global REIT is a real estate investment trust.  The trust invests in retail and office buildings in Singapore and overseas.

Axis Real Estate Investment Trust is a real estate investment trust that owns and invests in a portfolio of commercial, office and office/retail real estate located in Malaysia. The portfolio includes Axis Business Park, Menara Axis, Crystal Plaza, Infinite Centre and Axis Plaza.

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)

Vital Healthcare: 1H23 — Also in the Waiting Room

Vital Healthcare (VHP) delivered a solid 1H23 result but slightly below our expectations: VHP reported 1H23 adjusted funds from operations (AFFO)...

Forsyth Barr

Real Estate Reflections: Five Themes for the Year Ahead

Last year was a turbulent time for listed property vehicles (LPVs) - the sector was down -26% in the year as it adjusted to the higher interest...

Forsyth Barr

Vital Healthcare: Improving Its Vital Signs

Vital Healthcare (VHP) announced 1) a 1H23 asset devaluation, 2) the pause of one of its low yielding development projects, 3) its first life...

Forsyth Barr

Real Estate Reflections: Adjusting to a Higher Rates Environment

1H23 listed property results highlighted solid operational outcomes, but we are starting to see higher interest rates impact forward earnings...

Forsyth Barr

Listed Property Insights: In the Balance

High interest rates and low transactions volumes has created uncertainty around commercial property valuations, which has manifested in the NZ...

Forsyth Barr

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