Property Stocks

[Basil]

Sep Qtr numbers all history now Basil ....no need to panic ...things on the up

Sounds suspiciously like an OCA analyst's presentation...no need to worry, we're on the improve already and everything is coming right...what could possibly go wrong lol

[Waltzing]

well Winner i dont think you spent much time in an accounting office over the decades and saw the damage to farming and retail in tough times...

it leave deep impressions in the mind...

that word recession on the front line to those people is like a war....

Well this gives us opportunities to create financial accounting movements that benefit group accounting of private companies and trusts (1995 advanced accounting research paper accounting society), most people dont have that advantage... 

the advantage people here have is that SP's are cheap again for certain sectors.. TRA and HLG have moved already showing that people arnt waiting for the good times... they knew buy 6 months ago.. and wait...

[Otago K]

partly a bit of a bump to this thread, reflective of the greater NZX market focus.
See this week Craigs IP on You Tube suggesting options to consider time for a move sooner rather than later to Interest Income alternatives.
Certainly Tuesday close for those bidding above $1.01 for IPL on day one of trading ex dividend might have been a pleasant surprise, unfortunate for the originating bidder at $1.01 to a large extent. Suspect a margin call went unsettled and shares were offered to the market, perhaps again unfortunate for someone.

[Waltzing]

This sector is being hit since maybe no one though the economy was as bad as the earnings season has suggested...

https://www.nzherald.co.nz/business/markets-with-madison/recession-rut-the-major-companies-doing-it-tough/YOOIZY3RM5GPNLOOS5TWMGGX4U/

[Waltzing]

yup its gfc prices ... weirddo stuff ...

[Basil]

Reasonably positive commentary from ARG, past the bottom of the cycle ?  https://www.argosy.co.nz/assets/documents/ARG472-Investor-Update-March-2025_web.pdf

Green shoots + 10% gross yield for 33% taxpayers + sizeable discount to NTA.  (NTA, $1.45, latest price 99 cents).
I think the bottom is in for this sector.

Disc: Hold some already / accumulating and expecting 25 bps cuts from RBNZ in April and May making 10% gross yield look absolutely stunning.
Why anyone would bother with the retirement sector which is suffering from massive oversupply when there's highly attractive metrics like this on offer from commercial property, is beyond my understanding.

[Waltzing]

thank you ...

[Turkey]

Reasonably positive commentary from ARG, past the bottom of the cycle ?  https://www.argosy.co.nz/assets/documents/ARG472-Investor-Update-March-2025_web.pdf

Green shoots + 10% gross yield for 33% taxpayers + sizeable discount to NTA.  (NTA, $1.45, latest price 99 cents).
I think the bottom is in for this sector.

Disc: Hold some already / accumulating and expecting 25 bps cuts from RBNZ in April and May making 10% gross yield look absolutely stunning.
Why anyone would bother with the retirement sector which is suffering from massive oversupply when there's highly attractive metrics like this on offer from commercial property, is beyond my understanding.

Reasonably positive commentary from ARG, past the bottom of the cycle ?  https://www.argosy.co.nz/assets/documents/ARG472-Investor-Update-March-2025_web.pdf

Green shoots + 10% gross yield for 33% taxpayers + sizeable discount to NTA.  (NTA, $1.45, latest price 99 cents).
I think the bottom is in for this sector.

Disc: Hold some already / accumulating and expecting 25 bps cuts from RBNZ in April and May making 10% gross yield look absolutely stunning.
Why anyone would bother with the retirement sector which is suffering from massive oversupply when there's highly attractive metrics like this on offer from commercial property, is beyond my understanding.

It might be that with property stocks you build or buy it, hold it for a very long time, revalue, very occasionally sell and recycle, ride the interest rate cycle up and down pay out too much in dividends to hungry beagles and don't grow much


With RV stocks you buy land, build and clip the ticket, then you sell what you built again and again and again and keep 30% everytime you sell it again, again, again...

ARG share price lower now than 5 or ten years ago SUM share price higher than 5 or 10 years ago.

A bit simplistic but you get the gist

[Basil]

Yes I get that, but RYM share price less than a third of what it was in 2014 and OCA price languishing in the toilet too, both with their already very modest dividends, suspended so stock selection is critical.  Its all about what your goals are.  If you want high yield at arguably the bottom of the commercial property cycle, I believe I've made a good case.   For me on the cusp of retirement and looking for dividend income to replace earnings, it's an attractive proposition especially at this stage of the cycle, at that yield and discount to NTA.

Younger people chasing growth should do well over the long-term having some SUM in their portfolio.

[Waltzing]

they are defensive stocks and they are very sensitive to the yield curve and the OCR.

the NZ economy will rebound as long as the country can find a business orientated mind set... it does not seem to have one yet...

logistics is supporting the economy and rest homes are not ... they are holding pens...and produce nothing ...

[Basil]

LOL Holding pens might be a bit harsh mate.  Some of them are very nice and there's a lot of happy people at the better ones but yeah, in terms of producing yield for investors, they're all absolutely hopeless.  The only one paying any dividend at all is SUM and that's only 2.15% with no imputation credits, so only 1.4% after 33% tax.  I can't put fuel in my boat or feed my big dog with that, not unless he's going on a near starvation diet lol.  As for OCA and RYM, senior management and directors are still happy to milk these companies for their full fees, (no reduction, even a token reduction of 10%, ever offered despite their truly appalling performance), all the while in recent times paying shareholders absolutely nothing.  What an absolutely disgraceful situation.

[LaserEyeKiwi]

they are defensive stocks and they are very sensitive to the yield curve and the OCR.

the NZ economy will rebound as long as the country can find a business orientated mind set... it does not seem to have one yet...

logistics is supporting the economy and rest homes are not ... they are holding pens...and produce nothing ...

Overly pessimistic mate - There has never been a recession since the depression that NZ has not recovered from in relatively short order (a year or two), regardless of the vibes of the economy or political governance.

Interest rates are back to normal, mortgage holders will all rollover to lower rates through the course of this year, and central government has done the bulk of its spending cuts. It all adds up to a fairly positive economic environment heading into 2026.

[LaserEyeKiwi]

I also think it's extraordinary that people think that the property cycle will all of a sudden no longer continue, and that listed property names will never again increase in price.

"This time is different" are usually incredibly dangerous words to enter someones brain.

[Buzz]

Overly pessimistic mate - There has never been a recession since the depression that NZ has not recovered from in relatively short order (a year or two), regardless of the vibes of the economy or political governance.

Interest rates are back to normal, mortgage holders will all rollover to lower rates through the course of this year, and central government has done the bulk of its spending cuts. It all adds up to a fairly positive economic environment heading into 2026.

Interesting take on Commercial Property investments https://www.rnz.co.nz/news/business/556320/commercial-property-increasingly-popular-with-investors

[Basil]

I also think it's extraordinary that people think that the property cycle will all of a sudden no longer continue, and that listed property names will never again increase in price.

"This time is different" are usually incredibly dangerous words to enter someones brain.

Yeap...just looking at ARG as an example. 10% gross yield and the shares are $1 and the NTA is $1.45
"Blind Freddy" can see interest rates are coming down and we are at the bottom of the cycle for commercial property.
There's a very good chance that on top of that extraordinary 10% gross yield, it gets a lot closer to asset backing over the next couple of years, like it has in every other property cycle...
I also think there's a pretty good case for KPG at 87 cents and noted in their half year presentation they are making solid moves on human resource cost reductions which has for a long time been one of my main criticisms.  I have the yield at 9.2% gross and AFFO payout at 89% based on 5.4 cps.  Not a massive fan of KPG but we are at the bottom of the retail cycle so it could be a good trade and also get a lot closer to NTA of $1.17 in the years ahead.  Yield is not shabby either when we have 2 x RBNZ rate reductions baked in as almost a certainty in the next two months on 9 April and 28 May.