OneAnswer KiwiSaver Scheme Australasian Property Fund

The Australasian Property Fund invests mainly in New Zealand and Australian listed property assets. Investments may include companies, funds or trusts that invest in property and are listed or intend to list, and cash and cash equivalents.

The Australasian Property Fund aims to achieve a return (after the fund charge and before tax) that over the long-term outperforms the relevant market index.

Minimum suggested investment timeframe is 10 or more years. The minimum suggested timeframe indicates how long to stay invested to manage short-term ups and downs and give your investment time to recover from any drops in value.

See Past updates for our funds.

Australasian listed property securities delivered negative returns over the quarter as higher interest rates and rising bond yields weighed on property valuations across both New Zealand and Australia. Inflation remained above central bank target ranges, prompting both the Reserve Bank of New Zealand (RBNZ) and Reserve Bank of Australia (RBA) to continue tightening monetary policy. Against this backdrop, investors remained cautious towards interest rate-sensitive sectors, with listed property underperforming broader equity markets despite generally stable operating fundamentals across much of the sector.

In New Zealand, the RBNZ increased the Official Cash Rate twice during the quarter as inflationary pressures remained elevated. Across the Tasman, stronger-than-expected inflation data reinforced expectations that Australian interest rates could remain higher for longer.

Reporting season was also an important driver of returns, with investors rewarding companies that delivered resilient earnings, maintained conservative balance sheets and demonstrated an ability to navigate a higher interest rate environment.

Relative performance was supported by stock selection across both New Zealand and Australian property markets. An overweight position in Australian diversified property group Stockland was the largest contributor, benefiting from continued strength in its residential development business and a solid full-year result. An underweight position in Charter Hall Group also added value after investors reacted cautiously to the company's earnings outlook despite continued growth in earnings and funds under management.

Elsewhere, overweight positions in Dexus and Oceania Healthcare contributed positively. The fund benefited from its underweight position in Goodman Group, as the company underperformed, investors became more cautious about the scale of its data centre development pipeline and the returns likely to be generated from future artificial intelligence-related infrastructure spending. A modest off-benchmark holding in DigiCo Infrastructure Real Estate Investment Trust also added value as demand for digital infrastructure assets remained supportive.

Offsetting these gains were several positions across both markets. Ryman Healthcare was the largest detractor from relative performance as higher interest rates and ongoing weakness in housing market conditions continued to weigh on sentiment towards retirement village operators. An overweight position in Arena REIT also detracted despite reporting a strong financial result, as investors responded cautiously following concerns around a key tenant.