Property For Industry Limited · NZX:PFI
Property For Industry — H1 2023 Earnings Presentation
41 slides from Property For Industry's earnings presentation, Aug 22, 2023
Slide 1: Our Position of Strength: Interim Results Briefing
PF: OUR POSITION OF STRENGTH PROPERTY FOR INDUSTRY Interim Results Briefing
Slide 2: Interim Results Briefing agenda
Interim Results Briefing . 2023 INTERIM RESULTS ~ 4 CAPITAL MANAGEMENT 5, \SUSTAINABILITY 6. wR 7. OUR-PRIORITIES aX UESTION
Slide 3: 01. Highlights
Slide 4: Highlights
Highlights Interim Results Briefing 2023 CONSTRAINED SUPPLY DRIVING RENTAL GROWTH: Auckland industrial vacancy remains at all-time lows, driving rental growth. $32.8 million of contract rent reviewed during H1 2023 delivering an average annualised uplift of 4.2%, 2.3% of contract rent leased during
Slide 5: Portfolio
Interim Results Briefing PORTFOLIO
Slide 6: Portfolio Snapshot
Portfolio Interim Snapshot Results Briefing 2023 ▪ PFI's portfolio is diversified across 93 properties INCLUDING and 128 tenants, with 100.0% occupancy and a BROWNFIELD JUNE 2023 DECEMBER 2022 weighted average lease term of 5.00 years, LEASES 1 weighted towards Auckland BOOK VALUE $2,058.9m $2,117.2
Slide 7: Valuations
Valuations Interim Results Briefing 2023 PFi FULL VALUATIONS FOR: CURRENT VALUATION eS $2.058.9. wate vi0.6c PROPERTIES v 55.0m (-5.3%)" Representing around half of ioe ia PFI's portfolio by value - -16 % WRITE: DOWN H-@ 4.73% UNDER riven by AZi. PASSING YIELD RENTED LI a across entire portfolio A 9
Slide 8: Leasing
Leasing Interim Results Briefing 2023 ▪ Total of $4.4 million of contract rent secured W eighted during H1 2023 A verage across H1 2023 L ease ▪ Rents agreed on $2.2 million of contract leasing transactions T erm rent secured during H1 2023 ▪ Rents were settled 14.7% above previous contract rents ▪
Slide 9: H2 2023 Lease Expiries
H2 2023 Interim Lease Results Expiries Briefing 2023 ▪ Portfolio is 100.0% occupied (0.0% vacancy) and 3.2% of contract rent is due to expire in H2 2023 (graph below), largest single expiry 22.1% of that (0.7% of contract rent) (chart on right) ▪ Leasing demand remains robust, ~75% of H2 2023 expiri
Slide 10: Rent Reviews
Rent Interim Reviews Results Briefing 2023 ▪ 61 rent reviews delivered an increase of 4.7% on ~$32.8 million of contract rent (~4.2% annualised, up from 4.0% in 2022) − 36 fixed reviews delivered an increase of 3.2% on ~$17.9 million 50% of contract rent (~1.7% annualised) 45% Expiries 3.2% − Six ma
Slide 11: In-house facilities management is now live
Management Results Briefing 2023 Facilities | Interim IN-HOUSE PFI now provides in-house facilities FACILITIES MANAGEMENT IS NOW LIVE management services to our tenants, enabling us to provide integrated, proactive, and sustainable property solutions that add value for customers and shareholders. 11
Slide 12: 2023 Interim Result
Interim Results Briefing 2023 _. 2023 INTERIM
Slide 13: Net Rental Income
Net Rental Interim Income Results Briefing 2023 $50m ▪ Net rental income (excluding service charges) of $47.4 million down $0.3 million or 0.7% on the +0.1 +0.1 +0.6 prior interim period ($47.8 million), growth on stabilised $49m portion of the portfolio of 1.5% +0.9 ▪ Positive leasing activity cont
Slide 14: Adjusted Funds From Operations
Adjusted Interim Funds From Results Operations Briefing (cps) 2023 6.0 ▪ AFFO of 4.62 cps in line with prior +0.44 interim period +0.54 ▪ Effective tax rate of 12.3% down 5.0 7.0% on the prior interim period 4.64 +0.03 -0.64 4.62 following commencement of -0.31 -0.06 -0.02 brownfield developments 4.
Slide 15: Administrative Expenses
Administrative Interim Expenses Results Briefing 2023 ▪ Admin expenses up $1,341K or 34% on H1 2022, $739K or 16% on H2 2022 ▪ Transition to in-house facilities management a key driver of the increase − H1 2023 and H2 2022 includes facilities management project and team costs (H1 2023: $439K, H2 202
Slide 16: Earnings, Dividends, Guidance
Earnings, Interim Dividends, Results Guidance Briefing 2023 ▪ H1 2023 cash dividends total 3.90 cps, EARNINGS H1 2023 CPS H1 2022 CPS CHANGE dividend payments reprofiled in 2023 ▪ 2023 dividend guidance of 8.10 to 8.30 cps, an FUNDS FROM OPERATIONS 4.92 5.13 -0.21 cps or -4.0% increase of up to 0.20
Slide 17: Investment Properties
Investment Interim Properties Results Briefing 2023 ▪ Portfolio value of $2.059 billion $2,200m ▪ Full valuations of 37 properties 2,117.2 resulted in write-down of $55.0 $2,100m million or 5.0% +18.6 2,058.9 -55.0 ▪ 8A & 8B Canada Crescent, $2,000m -21.0 -0.9 Christchurch, disposal settled March 20
Slide 18: Net Tangible Assets
Net Tangible Interim Assets Results (cps) Briefing 2023 310 ▪ Net tangible assets (NTA) per share decreased by 10.6 cps or 3.5% 300 298.8 ▪ Change in NTA per share driven by the decrease in the fair value of investment properties 290 +0.8 288.2 (-11.0 cps), a decrease in the -11.0 -0.4 net fair valu
Slide 19: Capital Management
Capital Interim Management Results Briefing > MANAGEMENT
Slide 20: Funding, Covenants, Interest Rates
Funding, Interim Covenants, Results Interest Rates Briefing 2023 JUNE 2023 DECEMBER 2022 ▪ BNZ facility increased to $175 million and extended by two years to 31 March 2025, subsequently reduced to FUNDING $125 million on establishment of the new Green loan BANK FACILITIES DRAWN $401.3m $403.7m tran
Slide 21: Debt Facility Maturity Profile, Hedging
Debt Facility Interim Maturity Profile, Results Hedging Briefing 2023 $400m CBA Term Loan $350m BNZ 4-yr Green Term Loan 125.0 ▪ Post establishment of the Green $300m Westpac 4-yr Green Loan loan tranches, PFI’s bank facilities ANZ & CBA 3-yr Green Loan $250m BNZ Bank Facility and bonds have an aver
Slide 22: Sustainability
Interi Briefing | | H pita ili
Slide 23: Sustainability Focus Areas and Targets
~ "1 FOCUS AREAS TARGETS FOCUSED ON KEY AREAS 46946 © GREENHOUSE GAS EMISSIONS GREEN STAR Pena KCnae _ fal Significant new buildings to target minimum 5 Green Star certification =) [| Implement power metering and monitoring for 50% of properties by the end of 2025 Install solar systems at five build
Slide 24: Sustainability Progress
ADVANCING OUR STRATEGY FACILITIES MANAGEMENT Working toward our 5 Green Star target for the Bowden and Springs nts, and safety in the design of our in- GREEN STAR $5,250 to support Auckla efforts for the Aucl $10,000 Cyclone Gabrielle. $3,500 Foundation. COMMUNITY SUPPORT Embedding sustainability an
Slide 25: Green Star Inclusions
Sustainability Interim – Green Star Results Inclusions Briefing 2023 Use of engineered wood products (to meet best practice formaldehyde limits – target 95% compliance), FSC timber products and recycled products where available Cleaning and future irrigation systems to reduce natural resource consum
Slide 26: Outlook
2023
Slide 27: Market Update
Market Update Interim Results Briefing 2023 ▪ Auckland industrial vacancy remains at all-time lows 15% ▪ CBRE is forecasting rental growth of ~11% in 2023, with growth moderating in 2024 and 2025, before 10% returning to more ‘normal’ levels (~3-5%) in 2026 and 2027 (top graph) 5% ▪ PFI’s ~16% portf
Slide 28: Rental Growth
Rental Growth Interim Results Briefing 2023 ▪ Rental growth momentum has continued in 2023, with CBRE now WAREHOUSE ▪ Improvements comprise an office and forecasting growth in the range of TOTAL RENT $ / SQM RATE warehouse constructed in the late 1990’s, ~9-12%1 for both prime and ~2,750 sqm warehou
Slide 29: Our Priorities
Our Priorities Interim Results Briefing 2023
Slide 30: Our Portfolio (Target & Current)
Our Portfolio Interim (Target & Current) Results Briefing 2023 30
Slide 31: Brownfield Opportunities
Brownfield Interim Opportunities Results Briefing 2023 ▪ ~$232 million or 11% of the portfolio held in % OF brownfield opportunities, providing a growing PROPERTY JUNE 2023 LETTABLE SITE LEASE CONTRACT VALUE AREA(SQM) COVERAGE EXPIRY pipeline of near-term development opportunities RENT ▪ 30-32 Bowde
Slide 32: 30-32 Bowden Road
wd 32 BOWDEN. ROAD : a seit i
Slide 33: Brownfield Opportunities: 30-32 Bowden Road
Brownfield Interim Opportunities Results Briefing 2023 ▪ ~40% of development pre-leased to Tokyo Food for a lease term of 12-years, balance of site being developed on a speculative basis, estimated completion Q3 2024 ▪ Estimated project cost unchanged at ~$65 million ▪ Both buildings will target a F
Slide 34: 78 Springs Road
Pri 78 SPRINGS ROAD : : iS Future Stages “ “ WN mt
Slide 35: Brownfield Opportunities: 78 Springs Road
Brownfield Interim Opportunities Results Briefing 2023 ▪ PFI to develop a 25,500 sqm warehouse for existing tenant Fisher & Paykel Appliances, with an option to expand the warehouse to 30,000 sqm ▪ Stage 1 of the project has an estimated total incremental cost of ~$76 million, contract pricing shows
Slide 36: Brownfield Opportunities (Near-term)
Brownfield Interim Opportunities Results (Near-term) Briefing 2023 ▪ Current lease expiry June 2027 ▪ Current lease expiry November 2028 ▪ 318 Neilson Street, purchased in March 2022, provides the ▪ 2.6 ha site currently benefits from site coverage of just 25% opportunity to enable ‘drive round’ acc
Slide 37: Brownfield Opportunities (Medium-term)
Brownfield Interim Opportunities Results (Medium-term) Briefing 2023 ▪ Part of PFI’s wider holdings at Rosebank and ▪ Purchased in January 2021 and adjacent to ▪ 16,500 sqm site with good access to both Patiki Roads PFI’s wider holdings at Rosebank and Patiki Southern and Northern motorways, proximi
Slide 38: 08. Review & Questions
Slide 39: Review & Questions
Review & Interim Questions Results Briefing 2023 HIGHLIGHTS: CLOSING: ▪ Interim result ▪ Our diligent approach to capital management over the first half of the year will facilitate the ▪ Constrained supply driving rental growth execution of the Company’s Green Star development pipeline, as we work t
Slide 40: Disclaimer
Disclaimer Interim Results Briefing 2023 The information included in this presentation is provided as at 22 August 2023 and should be read in conjunction with the interim financial statements, NZX results announcement, NZX Form –Results Announcement and NZX Form –Distribution Notice issued on that s
Slide 41: Close of Meeting
Close of Meeting ue ANAM = a oN THANK Vou FOR ATTENDING. “ 7
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