3 NZX dividend stocks to look at in property sector

Highlights

• Residential construction costs are experiencing a surge driven by increased timber prices and record building consents.
• Kiwi Property Group discloses a significant jump in its December 2021 sales.
• Property for Industry to unveil its annual performance report card in the last week of February.

According to the latest reports, NZ residential construction costs continue to witness a climb, with more surges expected in the future.

Rising timber prices and record building consents were the chief contributors to these increased costs. Further, a rise in mortgage rates will further add to affordability challenges among Kiwis. Also, increased construction costs will escalate other related costs for property owners.

However, Kiwi builders opine that they would not be much impacted by the trend as they boast having a strong pipeline of work and other development projects.

That said, let us get acquainted with the three NZX-listed property stocks that can be considered for investment.

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Kiwi Property Group Limited (NZX:KPG)

First on the list is Kiwi Property Group Limited, which boasts a huge portfolio of retail, commercial as well as mixed-use properties. Last month, the Group revealed a significant jump in its sales pertaining to December 2021 for its mixed-use shopping centres, i.e., a rise of 9.6% on pcp.

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Sylvia Park was KPG’s top-performing asset in the last month of previous year, followed by LynnMall and Te Awa The Base, with sales growth of 11.7%, 7.3% and 4.5%, respectively, in December 2021.

Moreover, it paid an interim dividend of 2.75 cps in September 2021 and is targeting to pay a total dividend of at least 5.30 cps for FY22.

On 10 February, at the time of writing, KPG was trading at $1.14, down 0.44%.

Argosy Property Limited (NZX:ARG)

Next in line is Argosy Property Limited, comprising industrial, office and large retail properties in its portfolio.

Owing to resilience shown by its business amid the ongoing pandemic, ARG posted solid FY22 interim results with an NPAT of NZ$127.0 million.

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Hence, it paid a Q2FY22 dividend of 1.6375 cps in December 2021 and has forecasted its FY22 dividend at 6.55 cps, with its new dividend policy to start from April 2022.

On 10 February, at the time of writing, ARG was trading at $1.47, up 0.34%.

Property for Industry Limited (NZX:PFI)

Last on the list is Property for Industry Limited, a property vehicle specialising in industrial properties. It will release its FY21 annual results on 21 February.

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The Company, which is regular in paying dividends, paid an interim dividend of 0.63 cps in November 2021, underpinned by a quality portfolio and smart execution of PFI’s refreshed strategy.

On 10 February, at the time of writing, PFI was trading at $2.81, up 0.54%.

Bottom Line

NZ property companies have demonstrated resilience and have fared well amid the pandemic with overall demand for property remaining robust.