Forsyth Barr broker Damian Foster said the November reporting season would be categorised by very low growth for the listed property vehicle sector, four of the seven reporting expected to produce negative earnings per share growth.
"The season is dominated by the property sector, with seven property companies reporting first-half 2019 results," he said.
Excluding the property sector, median earnings per share growth is forecast at more than 4.4%, he said.
"We’re forecasting slightly negative earnings per share growth for the upcoming reporting season at a median level," he said.
This is the smallest of the quarterly reporting seasons.
The season would be dominated by low property growth, he said.
Mr Foster said it appeared negative that four of the seven listed property vehicles were expected to produce negative earnings per share growth.
However, the key driver behind that was the extensive level of asset sales during the past 12 months, particularly by the Goodman Property Trust and Kiwi Property Group.
"Broadly speaking, the market viewed [those sales] favourably as this has improved portfolio quality," he said.
Fund manager Augusta Capital is expected to report the stand-out result for the sector, showing earnings up more than 28% on the same period last year, reflecting "substantial deal activity" during the half, he said.
Traditional real estate investment trusts Argosy Property and Investore Property are expected to produce the highest earnings growth, up more than 7% and 3.7% respectively, on the back of a soft result a year ago and acquisitions.
From a portfolio perspective, of interest would be the performance metrics for retail assets of the Kiwi Property Group and Stride Property, updates on key vacancies in office portfolios of Kiwi and Argosy, and market rental growth for industrial assets.
"We expect lower interest costs will continue to bolster results as historic hedging, on higher rates, roll off and higher credit costs have only a modest impact on the cost of debt," Mr Foster said.
