Property For Industry Limited · NZX:PFI
Property For Industry — FY2020 Earnings Presentation
35 slides from Property For Industry's earnings presentation, Feb 22, 2021
Slide 1: Welcome to the 2020 Annual Results Briefing
WELCOME — TO THE 2020 ANNUAL RESULTSBRIEFING
Slide 2: Contents
CONTENTS Contents |_ Annual | Results | Briefing pnt HIGHLIGHTS PORTFOLIO 2020 ANNUAL RESULTS CAPITAL MANAGEMENT MARKET OUR PRIORITIES REVIEW & QUESTIONS APPENDICES
Slide 3: Highlights
Highlights | “Annual Results Briefing ‘ \ il y -—-— saat ten neat SUDO Mam ay. yom lemon / oe i, a By OOO ae cats: HIGHLIGHTS pe LP Pm
Slide 4: Highlights
Highlights Annual Results Briefing 2020 STRONG BALANCE SHEET: Net tangible assets up 7.5% to 220.9 cents per share, additional bank facility secured, over $110 million of available liquidity, gearing of 30.0% PORTFOLIO METRICS HEALTHY: Weighted average lease term of 5.28 years, occupancy of 99.4%, j
Slide 5: Portfolio
Slide 6: Portfolio Snapshot
Portfolio Annual Snapshot Results Briefing 2020 ▪ PFI's portfolio is diversified across 94 properties DECEMBER 2020 DECEMBER 2019 and 148 tenants, with 99.4% occupancy and a weighted average lease term of 5.28 years, BOOK VALUE $1,631.5m $1,476.2m weighted towards Auckland industrial property NUMBER
Slide 7: Historical Operational Performance
Historical Annual Operational Results Performance Briefing 2020 ▪ Since 2011 PFI has achieved 100% 6 a year end average occupancy of 98.5% and a weighted average lease term 99% 5 of 5.09 years 98% 4 97% 3 96% 2 95% 1 94% 93% 0 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Occ
Slide 8: Valuations
Valuations Annual Results Briefing 2020 ▪ Annual increase from independent valuations of $72.5 million or 4.7% to $1,631.5 million, including assets held for sale − Post balance date, Carlaw Park divestment at $110.0 million, $7.6 million above the year-end valuation ▪ Around one-third of valuation
Slide 9: Leasing
Leasing Annual Results Briefing 2020 ▪ 37 leases agreed over ~90,500 sqm of space ADDRESS TENANT TERM AREA % RENT ROLL for an average term of 7.5 years ▪ 11 new leases and 26 renewals secured 59 Dalgety Drive Store Rite Logistics 12.0 years 11,844 sqm 1.4% ▪ Lease renewals accounted for more than 70
Slide 10: Rent Reviews
Rent Annual Reviews Results Briefing 2020 Vacant 0.6% ▪ 94 rent reviews delivered an average annual uplift of ~3.4% on Expiry 3.3% ~$50.7 million of contract rent Market 6.3% − 12 market rent reviews delivered an annualised increase of 2.8% over an average review period of 2.5 years on $4.2 million
Slide 11: 2021 Lease Expiries
2021 Lease Annual Expiries Results Briefing 2020 ▪ Portfolio is 99.4% occupied (0.6% vacancy) and 3.3% of contract rent is due to expire in 2021, a total of just 3.9% (graph below), down from 7.5% as at the end of 2019 − 127 Waterloo Road has been sold with settlement due to take place in April 2021
Slide 12: 2020 Annual Results
Slide 13: Net Rental Income
Net Rental Annual Income Results Briefing 2020 ▪ Net rental income of $84.2 $90m million in line with the prior year $89m +0.4 +0.1 ($83.3 million) +0.9 ▪ COVID-19 related support for $88m tenants included $0.9 million of +1.8 abatement and $0.6 million of $87m deferral, a combined total of 1.7% of
Slide 14: Adjusted Funds From Operations
Adjusted Annual Funds From Results Operations Briefing (cents per share) 2020 8.8 ▪ Profit after tax of $113.5 million +0.09 ▪ FFO earnings of 9.67 cents per 8.6 +0.16 share, 0.60 cents per share or 6.6% ahead of the prior year +0.61 8.4 ▪ AFFO earnings of 8.03 cents -0.29 per share, 0.24 cents per
Slide 15: Earnings, Dividends, Guidance
Earnings, Annual Dividends, Results Guidance Briefing 2020 ▪ 2020 cash dividends total 7.70 cents per EARNINGS 2020 CPS 2019 CPS CHANGE share (cps), up 0.10 cps from 2019, dividend reinvestment scheme in place for FUNDS FROM OPERATIONS 9.67 9.07 +0.60 CPS or +6.6% 2020 dividends, 2% discount ADJUSTE
Slide 16: Investment Properties
Investment Annual Properties Results Briefing 2020 ▪ Portfolio value of ~$1.63 billion, $1,680m including 127 Waterloo Road, Christchurch (due to settle April +19.2 +5.3 1,631.5 $1,630m 2021) and the Carlaw Park +65.1 properties, which are classified as held for sale (AHFS) $1,580m ▪ Increase from a
Slide 17: Net Tangible Assets
Net Tangible Annual Assets Results (cents per share) Briefing 2020 225 ▪ Net tangible assets (NTA) per share increased by 15.4 cents +0.8 +0.1 220.9 per share or 7.5% +1.0 220 +14.5 ▪ Change in NTA per share driven by the increase in the fair value 215 of investment properties (+14.5 cps), material
Slide 18: Five Year Financial Summary
Five Year Annual Financial Results Summary Briefing 2020 ▪ The last five years has seen strong YEAR ENDING 31 DECEMBER ($M, UNLESS NOTED) 2016 2017 2018 2019 2020 growth in earnings and values whilst TOTAL COMPREHENSIVE INCOME AFTER TAX 123.4 51.7 110.1 176.3 113.5 keeping gearing at conservative le
Slide 19: Capital Management
Capital Annual Management Results Briefing
Slide 20: Funding, Covenants, Interest Rates
Funding, Annual Covenants, Results Interest Briefing Rates 2020 ▪ $50 million liquidity facility secured from DECEMBER 2020 DECEMBER 2019 CBA in March 2020 in response to the risks FUNDING associated with the COVID-19 pandemic, increased to $100 million and extended in BANK FACILITIES DRAWN $289.9m
Slide 21: Debt Facility Maturity Profile, Hedging
Debt Facility Annual Maturity Results Profile, Briefing Hedging 2020 300.0 250.0 ▪ Average term to expiry of bank 200.0 100.0 facilities and bonds (top graph) 150.0 of 2.8 years, $110.1 million of unutilised bank facility capacity 100.0 150.0 150.0 ▪ FY22 expiries: CBA facility 50.0 100.0 100.0 expi
Slide 22: Market
Results Briefing MARKET
Slide 23: Market Update
Market Annual Update Results Briefing 2020 $m NZ Post Total Online Spend 2 600 ▪ Industrial property continues to perform, with trends supporting 550 long-term growth 500 450 ▪ Shift to online spending (top graph) accelerated by COVID-19 400 pandemic, boosting tenant demand for well-located industri
Slide 24: Market Update: CBRE Outlook
Market Annual Update Results Briefing 2020 ▪ CBRE “Auckland Property Market Outlook”, 5-YEAR 5-YEAR December 2020: CBRE AUCKLAND MARKET OUTLOOK DECEMBER 2020 FORECAST: FORECAST: DECEMBER 2020 DECEMBER 2019 − Outlook for vacancy and yields has improved since December 2019 PRIME INDUSTRIAL − Softer ou
Slide 25: Our Priorities
| Our Priorities OUR PRIORITIES
Slide 26: Purpose, Vision, Strategic Direction, Progress
Purpose, Annual Vision, Results Strategic Briefing Direction, 2020 Progress OUR PURPOSE OUR VISION PFI generates income for investors as professional landlords to PFI will be one of New Zealand’s foremost Listed Property the industrial economy, generating prosperity for New Zealand. Vehicles. Our me
Slide 27: Environmental, Social and Governance (ESG)
Environmental, Annual Social and Results Governance Briefing (ESG) 2020 Created ESG strategic framework Commenced execution of the ESG strategy Continue execution of the ESG strategy ESG STRATEGIC PILLARS HIGHLIGHTS KEY COMMITMENTS ▪ Health, safety and wellbeing ▪ Formalised a comprehensive Health,
Slide 28: Significant Progress
Significant Annual Progress Results Briefing 2020 LEASED LEASED 670-680 51-61 Spartan 212 Cavendish 25 Langley 6 Donnor Place, 528-558 59 Dalgety 314 Neilson Rosebank Road Drive, Wiri Road, Wiri Mt Wellington Rosebank Road Drive, Wiri St, Onehunga Road +$17.2m +$7.2m +36.0m +$5.6m $65.6m +$6.7m +$5.
Slide 29: Positioned for Growth
Positioned Annual for Results Growth Briefing 2020 ▪ After all planned acquisitions and divestments: DECEMBER 670-680 127 CARLAW PRO FORMA ROSEBANK WATERLOO PARK 2020 − Pro forma LVR of 26.5%; ACQUISITION DIVESTMENT DIVESTMENT INVESTMENT PROPERTIES − Borrowings headroom of $185.5 million; & AHFS $1,
Slide 30: 2021 Focus
2021 Focus Annual Results Briefing 2020 DISPOSALS: 2021 focus: disposal of Shed 22 in Wellington following completion of seismic works. ACQUISITIONS: 2021 focus: continue to target acquisitions of core industrial properties, like the recent acquisition on Rosebank Road. VALUE-ADD STRATEGIES: ASSET M
Slide 31: Review & Questions
Review & Annual Questions Results Briefing
Slide 32: Review & Questions
Review & Annual Questions Results Briefing 2020 LOOKING FORWARD: ▪ “This year, we took proactive steps to protect HIGHLIGHTS: our people and core business. At the same time, we held our course on our strategy and retained ▪ Robust annual result the confidence of the market. The year’s results show t
Slide 33: Appendices
Appendices Annual Results Briefing
Slide 34: Appendix 1: FFO and AFFO
Appendix 1: Annual FFO and Results AFFO Briefing 2020 (Unaudited, $000, unless noted) YE December 2020 YE December 2019 Profit and total comprehensive income after income tax attributable to the shareholders of the Company 113,452 176,286 Adjusted for: Fair value (loss) / gain on investment properti
Slide 35: Disclaimer
Disclaimer Annual Results Briefing 2020 The information included in this presentation is provided as at 22 February 2021 and should be read in conjunction with the NZX results announcement, NZX Form – Results Announcement, NZX Form – Distribution Notice, and annual report issued on that same day. Pr