Skip to main content

Show me the money; the latest from New Zealand's largest

John Polkinghorne
Value Asset

It’s financial reporting season for many of New Zealand’s largest property companies, and a good time to reflect on the twists and turns of the market.

Ryman Healthcare has always been a standout performer. They’re the largest owner and the largest developer of retirement villages in New Zealand. In fact, they’re probably our largest residential developer full stop, spending more than $300 million a year on new and expanded villages.

Ryman’s latest annual results have been very positive, but this is nothing new for the company. They’ve consistently improved their results every year, on all the measures that count. Although they’ve benefited from the property market upswing like everyone else, Ryman have built a business with a long-term focus – one which should still do well through the downturns.

At today’s share prices, Ryman is valued at a whopping $5.8 billion, making it one of the largest companies on the NZX and arguably the biggest property company.

Kiwi Property Group has also reported a great annual result. Sylvia Park, NZ’s largest shopping centre, keeps improving and now has annual sales of $550 million – miles ahead of any other Auckland centre. Most of Kiwi’s other centres also grew their sales, although Centre Place was flat and North City and Northlands saw declines (affected by the reopening of a major competitor and redevelopment, respectively). Kiwi’s office properties in Auckland and Wellington also performed well.

Goodman, Stride, Argosy and NPT are still to announce their results, but are likely to continue the strong run.

So what are the apparent trends from all this?

Retirement villages are an excellent example for the residential sector. They’ve tapped into a strong demographic trend (the ageing population), deliver environments that residents are very happy with, and have a model that performs well commercially. They develop at scale, and in places like Auckland they are major contributors to the growth of apartment-style housing.

As for commercial property, there’s a large disparity between asset values in Auckland and other cities. Auckland is attractive to the big property companies like Kiwi or Goodman, and it’s also popular with overseas investors. Other cities don’t have as wide an appeal, so two identical properties in Auckland and Christchurch would have very different values – even with the same tenant and rent.

On the one hand, this reflects confidence in Auckland’s future (and growth) – on the other hand, it can mean good cashflow opportunities in the regions.

Regardless, we don’t expect this disparity to go away any time soon.

 

Comment | Commercial Property Awards 2018

Award Night

The Commercial Project Awards were held at Sky City last Friday night. RCG and Māori Television were recognised with two National awards for Interior Fitout and Project Value, as well as recieving a gold award within their category - and we are absolutely delighted! 

Judges commented "The Client worked closely with the design and construction team to create new offices and studio spaces for Māori Television. The team’s focus on a collaborative and solutions-based approach set the foundation for the successful completion of the project. This is despite the challenges of the existing building, tight time frames, and the demands of highly technical specialist works required. The result is a project that exceeds expectations and celebrates Te Reo Māori.”

Our work with Mother Bernard Towers Science Centre at St Mary's College was also awarded silver "The new 1700m2 Science faculty has its own distinctive character and is an enlivening contribution to the Colleges Architectural DNA, both in form and function."

Congratulations to all other Winners and thank you to all those involved!

 

In the Press

Local Media Highlights Monday 14 May to Wednesday 23 May 2018

 

Budget 2018: the great Spinoff hot-take fry-up

Grant Robertson has completed his first big test as finance minister in publishing the 2018 budget. How did he fare? We asked experts from across a range of sectors to give us their verdict.

(Source: Spinoff)

 

New Zealand's energy future: It's electrifying

A major report into New Zealand's energy future finds demand for electricity will double and forecasts electric vehicles will make up 85 per cent of light vehicles by 2050.

(Source: NZ Herald)

 

Timber high-rise tower mooted for Auckland: suggestions on a number of sites

A building expert wants the Auckland waterfront area to get this country's first timber high-rise, saying the Wynyard Quarter or Britomart areas would be ideal for a significant wood tower.

(Source: NZ Herald)

 

ASB Housing Confidence Survey finds expectations in the housing market have improved sharply after a post-election slump, and Auckland house price expectations have hit a 12-month high

Looking for a strategic design and property partner?
Let's talk

Looking to buy, sell
or lease a property?
Talk to RCGR