5 NZX real estate shares amid RBNZ’s note for home loan borrowers


  • OCR changes flows to home loan borrowers within a month, but the major impact on the mortgage rates takes about 6 months.
  • Precinct Properties delivered a strong FY21 with a resilient portfolio.
  • Asset Plus finished FY21 with a profit of $15.95 million.

As per RBNZ’s analytical note released on 30 August, home loan borrowers would witness the most impact of OCR changes on mortgages rates in 6 months.

The central bank revealed in the note that an average 1% change in the OCR moves the average 2-year mortgage rate by 0.34% within a month. However, the transmission from monetary policy changes rises with time with a major impact on the mortgage rates about 6 months after OCR changes.

Image Source: © 2021 Kalkine Media

Amid this backdrop, let’s have a look at the performance of 5 NZX-listed real estate stocks.

Precinct Properties New Zealand Limited (NZX:PCT)

Precinct Properties posted a strong result for FY21, showing its portfolio resilience in the year steering through the COVID-19 challenge. White net property income increased 27.9% to $124.4 million due to completion of several development projects in the year, adjusted funds from operations (AFFO) rose by 3.1% to $85.3 million reflecting demand for PCT’s premium-grade portfolio.

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PCT will get a Q4 dividend of 1.625cps, due to be paid on 24 September 2021. PCT completed $1.5 billion of development projects over the past 6 years.

At the time of writing, Precinct Properties was trading flat at $1.71, as on 1 September 2021.

Goodman Property Trust (NZX:GMT)

On 5 August, GMT announced that the main syndicated bank facility has been extended at competitive new margins and S&P Global Ratings have reaffirmed its credit rating at BBB/stable.

Goodman also announced a cash distribution of $0.01375 per unit for the first quarter ending 31 March 2021, due to be paid on 16 September 2021.

On 1 September 2021, at the time of writing, Goodman Property was trading down by 0.04%, at $2.595.

Argosy Property Limited (NZX:ARG)

Argosy recently extended its bank facilities with the amount now at $455 million, down from $490 million previously, that are being offered by ANZ, BNZ, HSBC, CBA, and Westpac. The Group also announced a cash dividend of 1.6375cps for Q1 ended 30 June 2021, due to be paid on 29 September 2021.

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At the time of writing, Argosy Property was trading up by 0.30% in green, at $1.655, as on 1 September 2021.

Investore Property Limited (NZX:IPL)

Investore Property recently declared the acquisition of a property in Auckland for $36 million. The firm also divested its Dunedin-based property on 2 August.

The firm expects to pay an annual cash dividend of 7.9cps, assuming no further deterioration in the economic conditions due to COVID-19.

On 1 September 2021, at the time of writing, Investore Property was trading flat at $2.02.

Asset Plus Limited (NZX:APL)

Asset Plus completed FY21 with a profit of $15.95 million, up from a $14.69-million loss in the prior year. APL also reported adjusted funds from operations (AFFO) of $5.82 million versus the prior year’s $4.74 million.

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APL also secured resource consent for the proposed preferred redevelopment of 35 Graham Street in FY21 and are actively seeking tenants for the property. The Group remains well placed to navigate COVID-19 challenges, especially strong management abilities of the broader Centuria group.

At the time of writing, on 1 September 2021, Asset Plus was trading down by 1.47% at $0.335.

Bottom Line

Market reports have stated that a relentless rise in house prices is likely to cool down next year. However, affordability could stay strained or aggravate in next few years.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)



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