Interim Results 20.11.2019 Agenda PRESENTED BY Highlights 4 - PowerPoint PPT Presentation

FY2020 Interim Results 20.11.2019

Agenda PRESENTED BY Highlights 4 Strategy/Portfolio 6 Financials 20 Peter Mence Leasing Update CEO 29 Focus and Outlook 33 Appendices 35 Dave Fraser CFO Note: This results presentation should be read in conjunction with the NZX release dated 20 November 2019. Due to rounding, numbers presented in this presentation may not add up exactly to the totals provided and percentages may not reflect exactly absolute figures. 2 —

“Our strength lies in the diversity of our portfolio by sector, location and tenant mix, providing flexibility to support our tenants changing needs, ensuring a resilient business model through various economic cycles." Peter Mence CEO 3 —

Highlights 4 —

1H20 Interim Result 24.3% 100m 2 nd successful 7 year green bond Total shareholder return for the six month period issued post reporting date $1.28 3.5% New NTA, a 4.9% increase driven Net distributable income by a $50.8m revaluation gain increase per share 6.275¢ Full year dividend guidance 5 —

Strategy / Portfolio 6 —

Create. Manage. Own. 7 —

2020 Focus OUR PERFORMANCE SO FAR We have continued to transition Value Add properties to drive earnings and  Create capital growth. Proactive delivery of sustainable growth. Current organic value add development pipeline of $194m. More opportunities  (including green developments) currently being considered. Manage Solid leasing outcomes over 1H20, only ~5% of portfolio expiring over the  remainder of 2020. Manage all elements of our business to deliver the right  Excellent leasing results announced with the Crown for 7WQ space, building is outcomes for all our now 82% leased. Strong inquiry for remaining floors. stakeholders.  Second 7 year Green Bond issue of $100m completed post reporting date, improving debt funding diversification and tenor.  Transition towards AFFO based dividend policy continues. Own Several strategic acquisition opportunities being considered, with long term  Own the right assets, with capital growth upside. the right attributes in the  right locations. Settled strategic acquisition of 244 Puhinui Road, contiguous with an existing site. Sold the non Core Albany Lifestyle Centre.  8 —

$1.69B Portfolio Snapshot 9 —

Portfolio highlights 97.6% 6.0 yrs Weighted average lease term Occupancy (WALT) 70% 47% Auckland portfolio weighting Industrial portfolio weighting 3.2% 50.8m Like for like rent growth for the half $ desktop revaluation gain, 3.1% year above 30 September book value 10 —

Portfolio at a glance $1.69 BILLION 1 @ 30 SEPTEMBER 2019 TOTAL PORTFOLIO VALUE TOTAL PORTFOLIO VALUE TOTAL PORTFOLIO VALUE BY ASSET MIX BY REGION BY SECTOR 4% 3% 13% 11% 27% 47% 40% 70% 85% Bands Bands Bands Auckland 75-90% 40-50% 65-75% Core Industrial Wellington Non Core - Office 30-40% 20-30% Regional North Island Value Add Retail - 15-25% <10% & South Island 1. 30 September desk top valuation and excluding asset held for sale and right-of-use asset at 39 Market Place. 11 —

Sector Summary INDUSTRIAL OFFICE RETAIL Number of buildings Number of buildings Number of buildings 37 16 6 Market value of assets ($m) Market value of assets ($m) Market value of assets ($m) $786.8 $682.1 $221.2 Occupancy (by income) Occupancy (by income) Occupancy (by income) 97.8% 96.6% 100% Weighted average lease term (WALT) Weighted average lease term (WALT) Weighted average lease term (WALT) 7.2yr 4.9yr 5.1yr Contract yield Contract yield Contract yield 5.86% 6.56% 6.02% 12 —

Value Add OPPORTUNITY TO DRIVE EARNINGS AND CAPITAL GROWTH Valuation  Value Add properties total 11% of Property Sector Location $m the portfolio. 90 - 104 Springs Road, East Tamaki Industrial Auckland 6.6  Several major development projects 5 Unity Drive, Albany Industrial Auckland 7.5 underway within the group to 80 Springs Road, East Tamaki (complete) Industrial Auckland 15.9 transition them to Core properties, 211 Albany Highway, Albany (complete) Industrial Auckland 26.7 driving earnings and long term 960 Great South Road, Penrose (planned) Industrial Auckland 7.2 capital growth. 15 Unity Drive, Albany Industrial Auckland 4.6  A real focus on transforming Value 133 Roscommon Road, Wiri Industrial Auckland 9.2 Add assets into green developments 107 Carlton Gore Road, Newmarket (underway) Office Auckland 39.3 where possible. 252 Dairy Flat Highway, Albany Office Auckland 9.1 8-14 Willis Street (underway) Office Wellington 39.6 Stewart Dawson Corner (underway) Retail Wellington 22.3 194m 54-56 Jamaica Drive, Wellington (underway) Industrial Wellington 6.1 TOTAL $m 194.0 $ of Value Add properties with potential to deliver capital growth Note: Valuation is 30 September 2019 desk top valuation. 13 —

Development Pipeline A REAL FOCUS ON GREEN DEVELOPMENTS  180-202 Hutt Road: Works Forecast expected to be completed by $m 1 Development Major Tenant Type Location completion FY 2020 FY 2021 December. Sep-19 Mar-20 Sep-20 Mar-21 Underway / commenced Dec-19 180-202 Hutt Road Placemakers IND WTN 19.4  107 Carlton Gore Road: 12 year 107 Cartlon Gore Road Kāinga Ora OFF AKL 44.5 Dec-19 lease with Housing New Zealand Corporation Stewart Dawson Corner International Retailer RET WTN 30.0 Jul-20 commencing 1 March 2020 for Apr-21 8-14 Willis Street Statistics New Zealand OFF WTN 94.5 the entire 6,100m 2 . Targeting TOTAL 188.4 minimum 4 Green Star and Green Developments Standard Developments NABERSNZ ratings for this A Grade building.  8-14 Willis Street: Substantially new 11 level, 12,300m 2 building targeting a 6 Green Star Built rating and 5 Star NABERSNZ energy efficiency rating. New 15 year lease with the Crown (Statistics New Zealand). Due for completion in April 2021. 1. Expected value on completion based on ‘as if complete’ valuations performed by independent valuers. 14 —

Green Projects Underway 8-14 Willis Street, 107 Carlton Gore Road, Wellington Newmarket Target completion: April 2021 December 2019 NLA / WALT: 12,300m 2 /15 years 6,100m 2 /12 years Tenant: Statistics New Zealand Housing Corporation of NZ Green Star rating: Targeting 6 Star Built Targeting minimum 4 Star Built NABERSNZ rating: Targeting 5 Star Targeting 4 Star Value 1 : $94.5m $44.5m 1. Expected value on completion based on ‘as if complete’ valuations performed by independent valuers. 15 —

Case Study – Mighty Ape 5 STAR GREEN RATING  9,000m 2 of warehouse.  1,600m 2 of office across two levels.  116 onsite carparks.  7.3% IRR. “This award is just the beginning for us. We will continue to develop new sustainable business practices with the goal of protecting our country and its environment for generations to come." Alastair Burns, General Manager, Mighty Ape. 16 —

7WQ Leasing Update BUILDING NOW 82% LEASED, STRONG INQUIRY FOR OTHER FLOORS Lease  Levels 2 and 10: Department of Internal Commence Affairs (DIA) has entered into an initial 9- Plant year lease for 4,130m 2 . Lease commencement date 1 February 2020. L12 Strong enquiry L11 Strong enquiry  Level 3, 4 and 5: Kāinga Ora (formerly Housing New Zealand) Kāinga Ora has L10 DIA 1-Feb-20 entered into an initial 9-year, 3 months L9 Strong enquiry lease for 7,000m 2 . Lease commencement date 1 March 2020. L8 HUD 1-Mar-20  Levels 6, 7 & 8: Argosy recently concluded L7 HUD 1-Mar-20 negotiations with the Ministry of Housing L6 1-Mar-20 HUD and Urban Development (HUD) for an initial 9-year, 3 months lease over 3,660m 2 . The L5 1-Mar-20 Kāinga Ora (Crown) lease commences 1 March 2020. L4 1-Mar-20 Kāinga Ora (Crown)  Following these negotiations, the building is L3 1-Mar-20 now 82% leased. Kāinga Ora (Crown) L2 1-Feb-20 Department of Internal Affairs (DIA)  7WQ’s large floor plates are an attractive option in a Wellington office market short L1 31-Dec-25* NZ Post on inventory. Ground 31-Dec-25* NZ Post (part) / Common Basement Basement * NZ Post lease expiries. 17 —