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>Real Estate Reflections: The 182nd Ed</h2>
March 2020 — Best Form of Attack is Defence
In a turbulent&nbsp;month for markets listed property held firm, back just -1.9%, compared with the S&amp;P/NZX50 that was down -3.9%. We had three property results which highlighted strongly performing portfolios, sound balance sheets and free cash flow coverage of dividends.&nbsp;Our preferred&nbsp;LPVs&nbsp;are&nbsp;IPL,&nbsp;KPG&nbsp;(Both OUTPERFORM), &nbsp;ARG&nbsp;and&nbsp;VHP&nbsp;( both NEUTRAL). We pulled our&nbsp;VHP&nbsp;rating back from OUTPERFORM to NEUTRAL following its strong share price move.
Little in the way of surprises
PFI,&nbsp;VHP&nbsp;and&nbsp;PCT, all delivered&nbsp;solid rental growth despite being different property sector exposures, and major developments and dividend guidance is on track. There was no major interim revaluations from&nbsp;PCT&nbsp;and&nbsp;VHP, but&nbsp;PFI&nbsp;had a large annual valuation lift that boosted&nbsp;NTA&nbsp;by +16%.&nbsp;WALTs&nbsp;remain strong, lease&nbsp;expiries&nbsp;manageable, balance sheets sound and dividends are better covered by&nbsp;AFFO&nbsp;(adjusted funds from operations), which helps with the&nbsp;defensive&nbsp;profile. See Figures 2 and 3 for a summary.
Tick up in dividend flagged by&nbsp;Argosy
Late in the month&nbsp;ARG&nbsp;provided a small lift in FY20 dividend of +1.2% with it now guiding to an FY20 dividend of 6.35cps.&nbsp;ARG&nbsp;stated that this reflects&nbsp;a positive outlook for the company and also a desire to move&nbsp;towards changing to an&nbsp;AFFO&nbsp;based dividend&nbsp;policy. Also late in the month&nbsp;VHP&nbsp;released&nbsp;its Notice of special Meeting documentation for&nbsp;unitholders&nbsp;ahead of the meeting on 31 March 2020.&nbsp;
Jeremy Simpson CFA jeremy.simpson@forsythbarr.co.nz +64 9 368 0022

Real Estate Reflections: The 182nd Ed
March 2020 — Best Form of Attack is Defence
In a turbulent&nbsp;month for markets listed property held firm, back just -1.9%, compared with the S&amp;P/NZX50 that was down -3.9%. We had three property results which highlighted strongly performing portfolios, sound balance sheets and free cash flow coverage of dividends.&nbsp;Our preferred&nbsp;LPVs&nbsp;are&nbsp;IPL,&nbsp;KPG&nbsp;(Both OUTPERFORM), &nbsp;ARG&nbsp;and&nbsp;VHP&nbsp;( both NEUTRAL). We pulled our&nbsp;VHP&nbsp;rating back from OUTPERFORM to NEUTRAL following its strong share price move.
Little in the way of surprises
PFI,&nbsp;VHP&nbsp;and&nbsp;PCT, all delivered&nbsp;solid rental growth despite being different property sector exposures, and major developments and dividend guidance is on track. There was no major interim revaluations from&nbsp;PCT&nbsp;and&nbsp;VHP, but&nbsp;PFI&nbsp;had a large annual valuation lift that boosted&nbsp;NTA&nbsp;by +16%.&nbsp;WALTs&nbsp;remain strong, lease&nbsp;expiries&nbsp;manageable, balance sheets sound and dividends are better covered by&nbsp;AFFO&nbsp;(adjusted funds from operations), which helps with the&nbsp;defensive&nbsp;profile. See Figures 2 and 3 for a summary.
Tick up in dividend flagged by&nbsp;Argosy
Late in the month&nbsp;ARG&nbsp;provided a small lift in FY20 dividend of +1.2% with it now guiding to an FY20 dividend of 6.35cps.&nbsp;ARG&nbsp;stated that this reflects&nbsp;a positive outlook for the company and also a desire to move&nbsp;towards changing to an&nbsp;AFFO&nbsp;based dividend&nbsp;policy. Also late in the month&nbsp;VHP&nbsp;released&nbsp;its Notice of special Meeting documentation for&nbsp;unitholders&nbsp;ahead of the meeting on 31 March 2020.&nbsp;
Jeremy Simpson CFA jeremy.simpson@forsythbarr.co.nz +64 9 368 0022



Real Estate Reflections: The 182nd Ed March 2020 — Best Form of Attack Is Defence

Asset Plus

Real Estate Reflections: The 182nd Ed March 2020 — Best Form of Attack Is Defence