How are 5 NZX REIT stocks transitioning from 2021 towards 2022?

Highlights

  • The RBNZ lifted the OCR to 0.5% to tackle inflation and soaring house prices.
  • KPG procured a property next to Sylvia Park for $27.5 million.
  • PCT will hold its AGM on 4 November 2021.

NZ had been facing a relentless rise in house prices due to desperate homebuyers, making it one of the most unaffordable property markets in the world. This has been majorly due to COVID-19 government policies that led to cheaper mortgages, allowing rich Kiwis to upsize their homes while eliminating low and middle-income Kiwis from the market.

On 6 October, the RBNZ increased the OCR rate by 25 bps, taking it to 0.5% to tackle increased inflationary pressures, labour shortages and a hot housing market. Banks have followed by increasing their mortgage rates and will now be hesitant to lend people with small deposits.

Let’s glance through the performance of these 5 REITs.

5 NZX REITs, mkt cap, YTD Returns

Image source: © 2021 Kalkine Media New Zealand Ltd, Data source- Refinitiv

Kiwi Property Group Limited (NZX:KPG)

Kiwi Property affirmed on 1 October to procure 385 Mt Wellington Highway for $27.5 million. The 7,144 square metre property is next to Sylvia Park Lifestyle in Auckland will be purchased with vacant possession.

How are NZX REIT stocks transitioning from 2021 towards 2022?

The deal is expected to be settled on 24 June 2022.

KPG ended the day 1.71% in red to close at $1.15.

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

Stride Group performed remarkably in FY21, given the COVID-19 impact. Profit after tax from continuing operations grew to $132 million in the period compared to a loss of $0.1 million in FY20.

DO READ: How are NZ banks faring in October post OCR increase?

The total cash dividend for its groups- SPL and SIML stood at 9.91cps for the year ended 31 March 2021. The Group wants to grow its investment management business while monitoring market conditions.

SPG ended the day 0.82% in green to close at $2.45.

Goodman Property Trust (NZX:GMT)  

GMT's property portfolio would gain over $500 million in the first half of 2021, according to Goodman Property's draft valuation report.

The findings showed solid property fundamentals and booming investment for warehouses and logistics industry assets, according to GMT's CEO. The portfolio revaluation will contribute 36cpu to GMT’s Net Tangible Asset backing.

ALSO READ: Could these 5 NZX dividend-paying stocks help stash retirement income?

GMT ended the day 1.02% in green to close at $2.465.

Precinct Properties New Zealand Limited (NZX:PCT)       

Precinct sent out a letter to its shareholders on 6 October, inviting them to PCT’s AGM to be held on 4 November 2021. The group will hold both online and in-person meetings, subject to changes as per the COVID-19 situation in the country.

RELATED READ: How are 5 NZX REIT stocks faring amid interest limitation proposals?

PCT ended the day 2.37% in red to close at $1.65.

Argosy Property Limited (NZX:ARG)

Argosy property paid a dividend of 1.6375cps for Q1 FY22 on 29 September 2021. The cash dividend was in line with guidance for a dividend of 6.55cps for the full year.

The Group also announced that the strike price for the dividend reinvestment plan will be $1.5979 per share, working in respect of the dividend paid on 29 September.

ARG ended the day 0.62% in red to close at $1.6.

Bottom Line

It is yet to be seen if the OCR increase and a subsequent increase in mortgage rates affect the soaring and hot housing market.

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

Comment


Disclaimer

   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK