Are 3 NZX REIT stocks worth considering in 2022?

Highlights

• The year 2021 witnessed a record rise in the Kiwi property market; however, the trend is likely to slow down this year.
• Kiwi Property Group signs an agreement with Swedish furniture giant IKEA for establishing its future stores in the former’s shopping centres.
• Precinct Properties New Zealand announces the start of stage III relating to the Wynyard Quarter Precinct.

Reports reveal that in spite of strong gains in monthly property value, the annual growth rate in property prices is witnessing a decline, hinting at an impending market slowdown.

It is noted that 2021 reported a record jump in New Zealand’s property market, with a 27.6% growth in the said year surpassing the previous record (of 2003) of 24.4%.

Low interest rates and borrowers’ ability to secure finance were the major contributors to high residential property prices across the Kiwi nation.

However, as this year progresses, interest rates are likely to rise clubbed with reduced affordability, which is expected to decrease borrowing capacity among NZ house buyers.

Having said that, let us explore the three well-known NZX-listed REIT stocks worth looking at in 2022.

Source: © 2022 Kalkine Media® data source- EODHD/Others

Kiwi Property Group Limited (NZX:KPG)

Operating in the real estate segment for over 25 years, Kiwi Property Group Limited had recently announced signing an agreement with IKEA, the Swedish furniture giant, to sell a parcel of land for setting up the latter’s store in KPG’s Sylvia Park.

Related Read: Which 5 NZX dividend stocks under NZ$5 to consider in 2022?

It is noted that IKEA is planning to foray into the NZ market and thus, it is identifying suitable locations for its future stores, and KPG is thrilled at having IKEA's presence at its shopping centre.

On 10 January, at the time of writing, Kiwi Property Group traded flat at NZ$1.200.

Precinct Properties New Zealand Limited (NZX:PCT)

Precinct Properties New Zealand Limited is a well-known real estate developer across Auckland and Wellington. A few days ago, it announced the commencement of the third stage of the Wynyard Quarter Innovation Precinct, with an expected cost of about NZ$157 million.

The framework for the said precinct depicts the newest trend related to sustainable timber construction innovation and is likely to be completed towards the end of 2024.

Further, PCT has bagged a new bank debt facility worth NZ$300 million for a period of five years.

On 10 January, at the time of writing, Precinct Properties New Zealand was down by 1.51% at NZ$1.635.

Stride Property Ltd & Stride Investment Management Ltd (NZX:SPG)

Recently, Stride Property Group has disclosed that it had done with the refinancing of its bank debt facilities ranging between NZ$455 million to NZ$600 million.

Do Read: Stride (NZX:SPG): How did the Company fare in HY22 results?

Out of the total debt facilities, NZ$400 million are termed as green loan facilities, and its lenders include ANZ, HSBC, Westpac, and ICBC, among others.

It is noted that SPG is focusing on building a sustainable business, which is getting a boost by these green loan facilities.

On 10 January, at the time of writing, Stride Property Ltd & Stride Investment Management was up down 1.89% at NZ$2.080.

Bottom Line

The New Zealand government is trying its best to control rising house prices and make them affordable to first-time property buyers.