Precinct Properties NZ Ltd & Precinct Properties Investments Ltd · NZX:PCT
Precinct Properties NZ Ltd & Precinct Properties Investments — AMP NZ Office Trust — H1 FY2010 Earnings Presentation
17 slides from Precinct Properties NZ Ltd & Precinct Properties Investments's earnings presentation, Feb 9, 2010
Slide 1: AMP NZ Office Trust Interim Result – FY10
AMP NZ Office Trust www.anzo.co.nz Stock ticker: APT.NZ Interim Result – FY10 (For Six Months Ending 31 December 2009) Rob Lang, Chief Executive Officer Amish Vallabh, Chief Financial Officer February 9, 2010 1 Managed by AMP Haumi Management Limited
Slide 2: Agenda
Agenda h Key Messages h Financial Review h Portfolio Activity h Market Review h Outlook 2
Slide 3: Key Messages
Key Messages h Focus is on core strategy and improving portfolio performance h Initiatives underway to create greater unit-holder alignment: better governance and management fee structures h Strong and flexible capital structure h Operating result: reasonable given tough market conditions h 7.058cpu
Slide 4: Earnings Overview
Earnings Overview h Current Key Earnings Drivers Positive rental reversions Lease renewal activity Lower management fees and interest charges 21 Queen Street leasing programme h FY10 Interim Period P&L (to 31 December 2009) Total rental revenue up 7.8% to $70.3m Direct property expenses
Slide 5: Proposed Tax Changes – Tax Working Group
Proposed Tax Changes – Tax Working Group h Tax Working Group (TWG) Independent group formed with support of Government Group’s aim to consider options for tax reform The TWG’s report can be found at www.victoria.ac.nz/sacl/cagtr/pdf/tax-report-website.pdf h Key recommendations affecting proper
Slide 6: Balance Sheet (as at December 2009)
Balance Sheet1 (as at 31 December 2009) h Strong and flexible balance sheet h Total assets declined 3.7% to $1.36bn (since 30 June 09) Interim valuation undertaken to improve transparency $60.2m asset value decline (before $2.9m capex) (19.2% decline from peak) Cap rates stable at 8.08% (now a
Slide 7: Distributions to Investors
Distributions to Investors h FY10 2nd Qtr gross distribution 1.764cpu, in line with expectations Net distribution 1.523cpu Record date 18 February 2010, payment date 25 February 2010 Effective tax rate to unit-holders for Q2 distribution is 13.7% Total six month interim gross distribution to
Slide 8: Portfolio Review
Portfolio Review Pricewaterhouse Coopers Tower IAG House AMP Centre ANZ Centre State Insurance Tower HP Tower AXA Centre Mayfair House Vodafone on the Quay No.1 The Terrance 125 The Terrace Pastoral House Deloitte House 21 Queen Street 8
Slide 9: Portfolio Asset Valuations (as at December 2009)
Portfolio Asset Valuations (as at 31 December 2009) h Interim revaluation carried out as at 31 December 2009 to improve transparency $60.2m1 or 4.3% decline in six months to 31 December (total decline from peak in June 2008 now 19.2%) Cap rates stabilising at 8.08% (vs 8.03% in June), cap rates
Slide 10: Portfolio Occupancy 90%
Portfolio Occupancy 90% h Portfolio occupancy affected by completion of development 94.4% (ex development) 95% 12 year long-run average Portfolio 89.9% 29 Willis Street 100.0% h Portfolio leasing activity Deloitte House 100.0% 7 new leases over 5,813sqm AXA Centre 97.2% 8 leases renewed over
Slide 11: Forward Lease Expiry
Forward Lease Expiry h Sustained high tenant retentions Market environment supports high retention rates > 90% average annual tenant retention rate over last 6 years h Solid progress being made on renewals and forward expiries FY10 expiries reduced from 11% to c.6% of portfolio NLA 12,250sqm
Slide 12: Rent Reviews
Rent Reviews h Portfolio rent reviews continue to under-pin revenue growth through tough market environment h During interim FY10 period 51 rent reviews (58,527sqm) completed with average upward reversion of 24.5% Rent reviews settled in line with expectations h Portfolio is 2.2% over-rented h FY1
Slide 13: Sustainable and High Covenant Revenue Base
Sustainable and High Covenant Revenue Base Industry Sector by NLA (% of Portfolio) 30.0% h High quality and diversified tenant base 25.0% h Government is largest customer 20.0% occupying 27% of total portfolio NLA 15.0% 10.0% h Government occupies 42.8% of 5.0% Wellington portfolio NLA 0.0% Go vernm
Slide 14: Market Environment
Market Environment Market Environment h Property market fundamentals developing weaker characteristics A new world order – navigating through the turmoil…. Weaker conditions likely to stay for another 12-18 months at a minimum Vacancy rising off a low base through to end of 2011 Sublease risks
Slide 15: Office Market Vacancy Rates
Office Markets Historic and Projected Office Vacancy Rates - Auckland CBD Total Vacancy % 24% Top 10 Buildings h Auckland vacancy at historical lows and now rising 21% Secondary Prime & A Grade Current (Prime: top 10): 21,844sqm or 8.67% 18% Dec’12 forecast (Prime: top 10): 14,358sqm or 5.70% 15
Slide 16: Summary and Outlook
Summary and Outlook h Governance structure and management fee review will improve unit-holder alignment h Balance sheet is strong with desired liquidity and ample covenant headroom Scope to leverage balance sheet to improve returns Maintain disciplined assessment of growth opportunities – in lin
Slide 17: ANZO Disclaimer
ANZO DISCLAIMER Important Notice This presentation contains not only a review of operations, but also some forward looking statements (including forecasts and projections) about AMP NZ Office Trust (ANZO) and the environment in which ANZO operates. Because these statements are forward looking, ANZO’
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