OneAnswer KiwiSaver Scheme Australasian Property Fund

• The New Zealand listed property sector struggled over the quarter, weighed down by ongoing worries that the New Zealand economy continues to slow. Over the quarter, the New Zealand listed property index fell 1.9%, while over the year, it was 2.5% lower. These returns were behind the broader NZX 50, which rose 5.5% over the quarter, and finished 2025 up 11.4%. 
• The weakening economic data included Q3 growth, as measured by GDP, which fell 1.0% over the quarter. This followed a 1.1% slump in the previous quarter. These were the biggest quarterly falls since late 2021 – at the height of the Covid-19 pandemic and lockdowns. Meanwhile, retail sales have now registered nine consecutive quarters of decline, while unemployment rose to 4.8% in the September quarter, up from 4.6% previously. 
• The worsening economic backdrop prompted the Reserve Bank of New Zealand (RBNZ) to cut the Official Cash Rate (OCR) by 100 basis points over the quarter, and it forecasted several more rate cuts for 2025. Despite the cuts to the OCR, bond yields remained elevated – another headwind for the property sector. Over the quarter, the yield on the New Zealand 10-year government bond rose 17 basis points, to 4.41%.
• Contributing to the fund’s relative outperformance were the overweight holdings of two retirement sector companies, Ryman Healthcare and Summerset Group Holdings. Both companies saw their share price rise by nearly 10% over the quarter, benefiting from falling mortgage rates. Although government bond yields remained firm, banks began to lower mortgage rates in response to the OCR cuts, which generally support prospective buyers of retirement units. Furthermore, the sector remains supportive after September’s takeover of Arvida Group – signs that the sector is attractive from a valuation perspective. 
• Elsewhere, underweight positions to Argosy Property and Precinct Properties NZ also contributed to relative performance, with shares in the two companies finishing the quarter lower. Precinct was the worst-performing company in the New Zealand listed property index, despite there being little company news over the period. 
• Offsetting some performance was an underweight position to the strong-performing Asset Plus. Its shares rose about 18% over the quarter, making it the best-performing company in the New Zealand listed property sector. In November, the single-asset company announced it had settled on the sale of its low-rise Auckland office block at 35 Graham Street. The company added that a five-cents-per-share dividend would be paid from the net proceeds of that sale following repayment of all bank debt.
• Finally, also holding back performance was the fund’s overweight position to Stride Property Group. Its shares fell about 5% over the quarter, on little company news. 

The 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
• Cash and cash equivalents.

This chart shows the mix of assets that the fund generally intends to invest in – 100% listed property.

See the fund's actual investment mix on page 3 of the fund update.