- According to recent data from the REINZ, the housing market continues to improve, posting record sales numbers in July 2020.
- Properties sold in Auckland, in July 2020 rose by 30.3% YoY the highest for July in five years.
- Kiwi Property reports resilient sales growth in June, total sales in June 2020 rose by 0.5%.
- Precinct Properties New Zealand reported robust portfolio performance during COVID-19 lockdown.
- Argosy Property Limited disclosed that dividend in FY20 rose by 1.2% on the prior year.
COVID-19 pandemic has upended lives, livelihood as well as the global economy. During this time of enormous uncertainty for many of New Zealanders, the housing market has become a significant source of wealth. The property market in New Zealand has been performing better than anticipated, and some market experts are suggesting an increase in housing prices.
According to recent data from the Real Estate Institute of New Zealand (REINZ), the housing market continues its improvement, posting record sales numbers in July 2020. In New Zealand, total residential properties sold in July increased by 24.6% from the pcp. The properties sold in Auckland, in July rose by 30.3% YoY, the highest for July in the last five years.
New Zealanders are still optimistic about the property market. While some people have been forecasting that house prices in New Zealand will drop due to the impact of COVID-19, most New Zealanders believe house prices will be pretty well for the rest of the year.
With this backdrop, in this article, we will highlight 3-NZX listed property stocks:
Kiwi Property hires a new CFO, reports resilient sales growth in June
NZ-based property group Kiwi Property Group (NZX:KPG) is one of the largest listed property companies on the NZX & is a member of the S&P/NZX 20 Index. The Company own as well as manages a substantial real estate portfolio, consist of some of New Zealand’s best mixed-use, retail and office buildings.
On 19 August 2020, Kiwi Property announced the appointment of Gavin Parker as Chief Financial Officer, effective immediately. Mr Parker has more than 25 years of experience in property investment, capital management, funds management, as well as investor relations. His capabilities and sector knowledge will be invaluable for the Company, particularly during the time of COVID-19 related disruption.
Moreover, the Group stated that recruitment for a new GM Funds Management is now underway and the announcement regarding the successful candidate shall be made in due course.
On the appointment of Gavin Parker as CFO, Kiwi Property CEO, Clive Mackenzie, stated-
On 29 July 2020, Kiwi Property released its sales data for June 2020, the first full month of trading since New Zealand lifted lockdown restrictions.
- Total sales in June 2020 increased by 0.5%.
- Adjusted sales at Kiwi Property’s shopping centre portfolio increased by 7.5% on pcp.
- Sylvia Park in Auckland, The Base in Hamilton and The Plaza in Palmerston performed particularly well, recording strong sales during the month.
Moreover, the Group disclosed that it is difficult to predict how the next few months will shape up and a lot will depend on the state of the economy, but for the moment, sales remain strong.
Stock Information: On 20 August 2020, KPG share price settled at NZ$1.000, climbing by 1.01% from its previous close. The market capitalisation of KPG stood at NZ$1.569 billion.
DO READ: Why Property Stocks need attention
Precinct Properties New Zealand’s sturdy portfolio performance during COVID-19 lockdown
Precinct Properties New Zealand Limited (NZX:PCT) is New Zealand’s only listed city centre specialist investing predominately in premium and A-grade commercial office property. The Company currently offers 13,600 square metres of space in four locations in Auckland.
On 13 August 2020, Precinct Properties revealed its performance summary for the fiscal year 2020 (ended 30 June 2020).
Highlights from the financial front-
- Stable leasing levels across the portfolio has achieved increased net property income (NPI) by 2.1% to NZ$97.2 million.
- Total comprehensive income after tax was NZ$35.1 million.
- Revaluation movement fell by 2.2%.
- Per share Net Asset Value (NAV) was reported at NZ$1.45.
Precinct Properties announced dividend guidance of 6.50 cps for the fiscal year 2021, representing a YoY growth of 3.2%.
Highlights from the operational front-
- A high occupancy level of 98% was achieved with a weighted average lease term (WALT) of 8.0 years.
- Robust leasing with nearly 28 transactions, totalling more than 12,600 square metres; ~8.0% growth on contract rents.
- Strong portfolio performance during COVID-19 induced lockdown with total rental abatement 1.3% of gross annual income.
Development projects update-
- The second phase of the Wynyard Quarter, 10 Madden Street, is making progress. It is wholly leased, is on budget, and is on a programme for completion by 2020 end.
- The second phase of the Bowen Campus is under development at 40 Bowen Street.
- 30 Waring Taylor redevelopment is ongoing for the 1st Generator site in Wellington.
- Auckland’s One Queen Street redevelopment project is currently on hold.
Stock Information: On 20 August 2020, PCT share price last quoted at NZ$1.685, in line with its previous close. The market capitalisation of the Company was recorded at NZ$2.214 billion.
Argosy Property’s resilient and sustainable dividends
New Zealand’s leading property company Argosy Property Limited (NZX:ARG) holds a diversified portfolio of industrial, office as well as retail properties predominately in Auckland and Wellington. Furthermore, Argosy has modest tenant-driven exposure to certain parts of New Zealand.
On 28 July 2020, the Company updated the market with its annual general meeting presentation highlighting FY20 results and dividend.
- Argosy Property Limited stated that dividend in FY20 rose by 1.2% on the prior year.
- The Dividend Reinvestment Plan remains open and will be available for the 1st quarter dividend with a 3% discount applied.
- The reaffirmed dividend guidance for the financial year 2021 is 6.35 cents per share that reflects the Board’s wish for shareholders to share in the continued robust operating outcomes while allowing Argosy to maintain its momentum towards an AFFO based dividend policy over the medium term.
Moreover, in the fiscal year 2020, the focus of the Company remained on transforming value add assets into green developments where possible.
Argosy Property had earlier reported impressive FY20 results with 3.8% growth in net distributable income and an increase in net tangible assets per share (from NZ$1.22 in FY19 to NZ$1.30)
Stock Information: On 20 August 2020, ARG shared price ended at NZ$1.280, down by 2.29%. Argosy has a market capitalisation of almost NZ$1.063 billion.