Macquarie ANZ Essentials - Jun 12 2026

Research evidence excerpt

Macquarie ANZ Essentials - Jun 12 2026

Macquarie Equity Research

11 June 2026

Real Estate

New ZealandNZ Listed Property Sector

An option to be a little less ordinary?

Nick

Key Points Mar

• One of the key investor focuses from the latest results is why stock

buybacks are not a significant consideration given discounts to book.

• Most REITs do not have excess capital to support buybacks outside of Grossupper DPSend ofyieldthespreads5-year range,are tradingand hightowardsabsolutethe

divestments, but reallocating dividends to buybacks could be an option. yields don't appear to acting as a backstop to share

• This could allow for maintaining a strong DPS yield for retail investors prices

while taking advantage of discounts to NTA and buyback accretion. Gross yield

7.0% spread to 10-yr

6.0% bond

• The REIT sector is once again trading at an elevated discount to book 5.0%4.0%

given concerns around interest rates, while NTAs have been stable 3.0%

to growing, and divestments on average a premium to book. With 2.0%1.0%

an average discount to NTA of ~17% (range 3-36%), investors have 0.0%

increasingly focused on why share buybacks have not been established, -1.0%

especially with some continuing to deploy investment capital. -2.0% ARG GNZ IPL KPG PCT PFI SPG VHP Sector

• The main constraint is gearing, with most REITs towards the middle or 5-year range Current

upper end of targets, exercising conservatism given backdrop, and hence Source: Company data, FactSet, Macquarie Research,

focused on maintaining headroom. Divestments remain an opportunity June 2026

to provide funding for a buyback, while a number are targeting this Illustratively reallocating 25% of current dividends to

as de-leveraging over time to fund reinvestment.