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 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>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

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

<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

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: 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

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

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

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