New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Asset Plus 1H21 Result – Initial thoughts</h2>
Asset Plus (APL) has reported a solid interim result with AFFO of 1.55cps +26% ahead of our forecast 1.23cps. The difference was attributable&nbsp;better net rental income with lower&nbsp;rental abatements than we had forecast. Positively, APL noted that rent relief deals related to both the national and subsequent Auckland lockdowns have been completed. APL also highlighted it completed a number of renewals at Stoddard Rd, which remains 100% occupied.
With works at Munroe Lane having now begun, our attention turns to 35 Graham Street and the upcoming Auckland Council lease expiry in June 2021. The redevelopment pathway is dependent on tenant commitment with APL actively seeking a tenant before the building becomes completely vacant in January 2022. A full redevelopment remains the preferred option, with resource consent recently being lodged and expected to be received by year end.
Key points
<ul>
<li>Revaluation gain, NTA now 44cps: APL recorded a revalution gain of +10.0% in the period, largely attributable to a +14.8% revaluation gain at Graham Street. The revaluation was partially offset by dilution at its recent capital raise.</li>
<li>Portfolio metrics largely unchanged: During the period, APL’s WALT fell from 3.2 to 2.9, reflecting a passing of time offset by new leases. Occupancy remained constant at 98%.</li>
<li>Unconditional deals: During the period APL announced that its Agreement to Develop and Lease with Auckland Council at Munroe Lane is unconditional. Ground works at Munroe Lane have since begun. APL also announced that its Agreement to Lease with Restaurant Brands is now unconditional, and it will begin developing a fast food site at Eastgate.</li>
<li>Focus turns to scaling up: APL signalled that it continues to search for new opportunities as it looks to improve the quality and scale of the vehicle.</li>
</ul>
Conference call: 10:00am NZT, register here:&nbsp;<a href="https://s1.c-conf.com/DiamondPass/10010967-uF78t4.html" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://s1.c-conf.com/DiamondPass/10010967-uF78t4.html&amp;source=gmail&amp;ust=1606349946627000&amp;usg=AOvVaw15DLPfKFfVTABk1IdUBBFv" rel="noopener">https://s1.c-conf.com/DiamondPass/10010967-uF78t4.html</a>
APL result summary
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1684275131589561268&amp;th=175fbf4efa6b8bb4&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8tVY-2Lpz-ECgFQOjh_Ut8eJ4MfvBo9np7xBiQNjLqhxVBT0AfB-XM7vhVR8_tsQC6y-GiX3cMB0eApoNMHwTX02crO5AFojOejgBMFfjTuILnSQmvvlw2wNk&amp;disp=emb" width="511" height="375" class="editor-image img-responsive" data-image-whitelisted=""></figure>
Source: Forsyth Barr analysis
Rohan Koreman-Smit&nbsp; Senior Analyst, Equities
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.2&amp;permmsgid=msg-f:1684275131589561268&amp;th=175fbf4efa6b8bb4&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ9bNNeeUrgDgpHJltALROQaoqLpm5DLpvltH8U4ND81OAFSIm2jw9CFilP9lgBS-itcgMc0KCi7c50xkusSXPr3cbEPYrE-odCh7qrh2zVpD3IxazZWte6NWDs&amp;disp=emb" class="editor-image img-responsive"></figure>
 P: +64 9 368 0085 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Asset Plus 1H21 Result – Initial thoughts
Asset Plus (APL) has reported a solid interim result with AFFO of 1.55cps +26% ahead of our forecast 1.23cps. The difference was attributable&nbsp;better net rental income with lower&nbsp;rental abatements than we had forecast. Positively, APL noted that rent relief deals related to both the national and subsequent Auckland lockdowns have been completed. APL also highlighted it completed a number of renewals at Stoddard Rd, which remains 100% occupied.
With works at Munroe Lane having now begun, our attention turns to 35 Graham Street and the upcoming Auckland Council lease expiry in June 2021. The redevelopment pathway is dependent on tenant commitment with APL actively seeking a tenant before the building becomes completely vacant in January 2022. A full redevelopment remains the preferred option, with resource consent recently being lodged and expected to be received by year end.
Key points

Revaluation gain, NTA now 44cps: APL recorded a revalution gain of +10.0% in the period, largely attributable to a +14.8% revaluation gain at Graham Street. The revaluation was partially offset by dilution at its recent capital raise.
Portfolio metrics largely unchanged: During the period, APL’s WALT fell from 3.2 to 2.9, reflecting a passing of time offset by new leases. Occupancy remained constant at 98%.
Unconditional deals: During the period APL announced that its Agreement to Develop and Lease with Auckland Council at Munroe Lane is unconditional. Ground works at Munroe Lane have since begun. APL also announced that its Agreement to Lease with Restaurant Brands is now unconditional, and it will begin developing a fast food site at Eastgate.
Focus turns to scaling up: APL signalled that it continues to search for new opportunities as it looks to improve the quality and scale of the vehicle.

Conference call: 10:00am NZT, register here:&nbsp;https://s1.c-conf.com/DiamondPass/10010967-uF78t4.html
APL result summary

Source: Forsyth Barr analysis
Rohan Koreman-Smit&nbsp; Senior Analyst, Equities

 P: +64 9 368 0085 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Asset Plus: 1H21 Result – Initial Thoughts