Webbannertest v2

Real Estate Investment Trusts - Quality over quantity?

  • Real Estate Investment Trusts (REITs) have delivered an attractive return relative to their lower volatility over the longer term
  • The quality of New Zealand property returns has improved over the last 10 years with a higher weighting to industrial assets
  • New Zealand REIT dividend distributions are now more sustainable, with most dividends now based on conservative available funds from operations definition rather than accounting definitions
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Shane Solly
Shane Solly | Posted on Aug 24, 2021
webbanner6 v2

Mortgage rates rise, but households can manage.

  • ASB increased all its fixed mortgage rates yesterday, including the highly popular one year rate by 0.36% to 2.55%. We expect other major banks to follow, likely marking the end of a multi-year decline in New Zealand mortgage rates.
  • Many households will soon be exposed to these rates as almost 80% of outstanding mortgages are either floating (12%) or fixed for less than one year (65%).
  • Further increases in mortgage rates are likely as the economic expansion supports a removal of monetary policy stimulus and higher bank funding costs.
  • We think households in aggregate can manage higher rates. Debt servicing costs are historically low and there is some evidence that mortgage holders are currently paying off a greater proportion of principal, implying a buffer to rising rates.
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Harbour sails 3
Hamish Pepper & Simon Pannett | Posted on Jul 15, 2021
webbanner3 v2

Listed Property – Known knowns, and known unknowns

Key Points

  • Listed property assets have not yet fully recovered.
  • Diverse impact of COVID-19 may create investment opportunities.
  • A wide range of outcomes are possible, and we review current evidence on rental abatements and deferrals.
  • It is reasonable to assume rentals falling by between -5% for industrial assets, through to -20% plus for secondary retail malls.
  • Banks have been supportive refinancing and extending debt facilities.
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Shane Solly
Shane Solly | Posted on Apr 21, 2020