Future Returns: Investing in Post-Pandemic Fitness
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,526,212 (+1.41%)       Melbourne $950,600 (-0.81%)       Brisbane $848,079 (+0.39%)       Adelaide $783,680 (+0.69%)       Perth $722,301 (+0.42%)       Hobart $727,777 (-0.40%)       Darwin $644,340 (-0.88%)       Canberra $873,193 (-2.75%)       National $960,316 (+0.31%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $711,149 (+0.79%)       Melbourne $480,050 (-0.07%)       Brisbane $471,869 (+1.52%)       Adelaide $395,455 (-0.79%)       Perth $396,215 (+0.44%)       Hobart $535,914 (-1.67%)       Darwin $365,715 (+0.11%)       Canberra $487,485 (+1.06%)       National $502,310 (+0.25%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 8,985 (+170)       Melbourne 11,869 (-124)       Brisbane 8,074 (+47)       Adelaide 2,298 (-22)       Perth 6,070 (+20)       Hobart 993 (+24)       Darwin 282 (-4)       Canberra 809 (+43)       National 39,380 (+154)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 7,927 (+125)       Melbourne 6,997 (+50)       Brisbane 1,822 (+3)       Adelaide 488 (+5)       Perth 1,915 (-1)       Hobart 151 (+3)       Darwin 391 (-9)       Canberra 680 (+5)       National 20,371 (+181)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 (-$20)       Melbourne $580 ($0)       Brisbane $590 (+$10)       Adelaide $570 (-$5)       Perth $600 ($0)       Hobart $550 ($0)       Darwin $700 (+$5)       Canberra $670 (+$10)       National $633 (-$1)                    UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $700 (-$20)       Melbourne $558 (+$8)       Brisbane $590 ($0)       Adelaide $458 (-$3)       Perth $550 ($0)       Hobart $450 ($0)       Darwin $550 ($0)       Canberra $540 (-$10)       National $559 (-$4)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,224 (-134)       Melbourne 5,097 (+90)       Brisbane 3,713 (-84)       Adelaide 1,027 (-3)       Perth 1,568 (-46)       Hobart 471 (-3)       Darwin 127 (+13)       Canberra 658 (-32)       National 17,885 (-199)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 8,171 (-343)       Melbourne 5,447 (-170)       Brisbane 1,682 (-22)       Adelaide 329 (+3)       Perth 561 (-11)       Hobart 159 (-6)       Darwin 176 (+16)       Canberra 597 (-12)       National 17,122 (-545)                HOUSE ANNUAL GROSS YIELDS AND TREND         Sydney 2.56% (↓)       Melbourne 3.17% (↓)     Brisbane 3.62% (↑)        Adelaide 3.78% (↓)       Perth 4.32% (↓)     Hobart 3.93% (↑)      Darwin 5.65% (↑)      Canberra 3.99% (↑)        National 3.43% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND         Sydney 5.12% (↓)       Melbourne 6.04% (↓)       Brisbane 6.50% (↓)     Adelaide 6.02% (↑)        Perth 7.22% (↓)     Hobart 4.37% (↑)      Darwin 7.82% (↑)        Canberra 5.76% (↓)       National 5.79% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 1.0% (↑)      Melbourne 0.7% (↑)      Brisbane 0.8% (↑)      Adelaide 0.4% (↑)        Perth 0.4% (↓)       Hobart 1.2% (↓)     Darwin 0.5% (↑)      Canberra 1.5% (↑)      National 0.8% (↑)             UNIT RENTAL VACANCY RATES AND TREND         Sydney 1.3% (↓)     Melbourne 1.6% (↑)      Brisbane 0.9% (↑)      Adelaide 0.5% (↑)      Perth 0.7% (↑)      Hobart 2.2% 2.0% (↑)      Darwin 1.0% (↑)        Canberra 1.7% (↓)     National 1.3% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 27.0 (↑)        Melbourne 28.3 (↓)     Brisbane 32.3 (↑)      Adelaide 26.3 (↑)      Perth 34.9 (↑)        Hobart 33.4 (↓)     Darwin 48.7 (↑)        Canberra 27.6 (↓)     National 32.3 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 27.0 (↓)       Melbourne 29.0 (↓)     Brisbane 33.0 (↑)        Adelaide 27.5 (↓)     Perth 38.2 (↑)      Hobart 33.4 (↑)      Darwin 48.3 (↑)      Canberra 33.2 (↑)      National 33.7 (↑)            
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Future Returns: Investing in Post-Pandemic Fitness

How investing in health could deliver a substantial figure in return.

Tue, Sep 14, 2021 12:46pmGrey Clock 4 min

Once associated solely with diet and exercise, an entire industry has sprung up around wellness. But traditional health and fitness still make up nearly 65% of the wellness market, which McKinsey pegs at US$1.5 trillion with annual growth between 5-10%.

“Awareness around health broadly is at record levels,” says Jason Helfstein, a senior analyst with the financial services firm Oppenheimer & Co. in New York. “And a lot of this was considered a niche industry probably 10 years ago.”

But wellness is a niche no more, firmly entered into the mainstream consciousness. While the entire category is being disrupted by technology, no area has experienced this more than fitness. Thanks to gym products like Peloton, Mirror, and Tonal that allow users to take classes at home, activity trackers like Fitbit and countless apps, the future of fitness is more self-directed than ever.

Brian Nagel, also a senior analyst with Oppenheimer, says this means a breakdown of the need for physical spaces to workout as “you can get healthy now in places other than physical gyms,”

Last week, Peloton, which sells its own home exercise equipment and class subscriptions, announced a price drop and financing options to encourage new customers. Helfstein anticipates that soon there may be the ability to access Peloton memberships in gyms.

“The thought was they were mortal enemies before Covid-19 and I have a feeling you’re going to see a lot more alignment.”

Oppenheimer’s investment bank describes health and wellness as the leading theme of 2021’s first half—not only because of “an increasing number and volume of capital raises for high-growth, innovative companies in the space,” it said in a report, but due to investors deploying billions in the market.

But institutional investment in the area is still early, as most disruptive companies remain private. “Most are active through late-stage private investments,” Helfstein says, noting there’s also some activity in the special purpose acquisition company market.

Helfstein and Nagel recently spoke with Penta and offered three tips for investors looking to invest in the fitness industry as it enters its late-pandemic phase.

Change Is Here to Stay

Just as Covid-19 is widely expected to have changed online shopping forever, Helfstein feels similarly for wellness platforms. “The genie doesn’t go back in the bottle” post-pandemic, he says. “Even as we emerge from that, some version of those benefits will sustain. Once consumers try something new, they never fully go back to the old way.”

By September 2020, it was estimated global fitness and health app downloads had increased by nearly 50%. Buoyed by pandemic success, Peloton CEO John Foley said last year he thinks it can attract 100 million subscribers post-pandemic.

Shifts expected to be among the most sticky are changes to workout habits, where people integrating workouts during the workday—where they couldn’t before—won’t give up that convenience. Helfstein is convinced companies will find ways to accommodate employees so they can continue to enjoy perks like this, even if they aren’t working from home full-time.

Looking forward, investors should keep an eye on wellness apps and fitness programs with monthly subscription components. “Once you’re spending your time on one of them, it’s really hard for somebody else to get you to switch unless they offer you a pretty big economic discount,” he says.

Look for R&D, Even in Non-Tech Companies

There’s no shortage of media stories proclaiming companies like Nike and Lululemon “tech” companies, due to their growing technological investments.

“Technology is becoming an increasingly key differentiator” across the wellness industry, Nagel says. Fitbit parent Google and Apple are two companies offering fitness apps, while being among the top spending global firms on research and development. That’s why investors need to look at the R&D spending of fitness and wellness companies when choosing investments in this rapidly changing landscape.

“Companies not investing suggests that they are willing to fall behind quickly,” he says. While it’s tough to come up with a magic number, he feels 5% of revenue is a reasonable estimate for companies to devote to R&D.

Keeping up with technology through its Nike Training Club app has helped the athletic gear company be at top of mind for customers in several wellness areas—which is enormously valuable for marketing and customer acquisition. “That’s helping to differentiate them significantly from all the other athletic brands out there,” Nagel says.

Look for Interactive Community Networks

While there’s a large portion of the population that wants to get healthier, Nagel says, what wellness companies battle most is “the tendency for consumers not to adopt this lifestyle.” But all across the internet are examples of companies where an increased amount of users, increased the collective experience. This is a factor which will drive success for fitness companies going forward.

For example, Peloton offers a number of live classes every day, and Strava, a leading privately held social fitness app lets users share progress and offers contests. It even crowns people as “local legends” for completing the most attempts of particular segments on the map.

These sorts of interactions are like the digital evolution of group fitness classes, offering the motivation that users need to continue and the sort of gratification which can entice non-users to start.

One area both Helfstein and Nagel think investors should watch in this area is live virtual fitness training.

“I think that virtual live training wasn’t in a position yet to really take advantage of Covid as an industry,” Helfstein says. “But it’s an area that we think gets more interesting as there’s an increased kind of hybrid work over time.”


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China’s economic recovery isn’t gaining the momentum money managers are awaiting.

Data from China Beige Book show that the economic green shoots glimpsed in August didn’t sprout further in September. Job growth and consumer spending faltered, while orders for exports came in at the lowest level since March, according to a monthly flash survey of more than 1,300 companies the independent research firm released Thursday evening.

Consumers’ initial revenge spending after Covid restrictions eased could be waning, the results indicate, with the biggest pullbacks in food and luxury items. While travel remains a bright spot ahead of the country’s Mid-Autumn Festival, hospitality firms and chain restaurants saw a sharp decline in sales, according to the survey.

And although policy makers have shown their willingness to stabilise the property market, the data showed another month of slower sales and lower prices in both the residential and commercial sectors.

Even more troubling are the continued problems at Evergrande Group, which has scuttled a plan to restructure itself, raising the risk of a liquidation that could further destabilise the property market and hit confidence about the economy. The embattled developer said it was notified that the company’s chairman Hui Ka Yan, who is under police watch, is suspected of committing criminal offences.

Nicole Kornitzer, who manages the $750 million Buffalo International Fund (ticker: BUIIX), worries about a “recession of expectations” as confidence continues to take a hit, discouraging people and businesses from spending. Kornitzer has only a fraction of the fund’s assets in China at the moment.

Before allocating more to China, Kornitzer said, she needs to see at least a couple quarters of improvement in spending, with consumption broadening beyond travel and dining out. Signs of stabilisation in the housing market would be encouraging as well, she said.

She isn’t alone in her concern about spending. Vivian Lin Thurston, manager for William Blair’s emerging markets and China strategies, said confidence among both consumers and small- and medium-enterprises is still suffering.

“Everyone is still out and about but they don’t buy as much or buy lower-priced goods so retail sales aren’t recovering as strongly and lower-income consumers are still under pressure because their employment and income aren’t back to pre-COVID levels,” said Thurston, who just returned from a visit to China.

“A lot of small- and medium- enterprises are struggling to stay afloat and are definitely taking a wait-and-see approach on whether they can expand. A lot went out of business during Covid and aren’t back yet. So far the stimulus measures have been anemic.”

Beijing needs to do more, especially to stabilise the property sector, Thurston said. The view on the ground is that more help could come in the fourth quarter—or once the Federal Reserve is done raising rates.

The fact that the Fed is raising rates while Beijing is cutting them is already putting pressure on the renminbi. If policy makers in China wait until the Fed is done, that would alleviate one source of pressure before their fiscal stimulus adds its own.


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