Precinct Properties NZ Ltd & Precinct Properties Investments Ltd · NZX:PCT
Precinct Properties NZ Ltd & Precinct Properties Investments — AMP NZ Office — H1 FY2011 Earnings Presentation
22 slides from Precinct Properties NZ Ltd & Precinct Properties Investments's earnings presentation, Feb 10, 2011
Slide 1: AMP NZ Office Limited (ANZO) Interim Results
AMP NZ Office Limited (ANZO) Interim Results Six months ended 31 December 2010 10 February 2011
Slide 2: Agenda
Agenda Page 2 Half Year Highlights Page 3 Section 1 - Financial Results and Capital Management Page 4 Section 2 - Portfolio Overview Page 11 Section 3 – Conclusion and Outlook Page 21 ANZO Interim Results, 31 December 2010
Slide 3: Half Year Highlights
Half Year Highlights Page 3 After tax distributable profit of $31.0 million (3.11cps) and NPAT of $28.4 million. Distributable income of Strong balance sheet maintained, with gearing $31 million in line with at 23 percent. expectations Thirty-five leases completed, including thirteen new custo
Slide 4: Section 1 – Financial Results and Capital Management
Section 01 – Financial Results and Capital Management
Slide 5: Financial Performance
Financial Performance Page 5 31 Dec 10 31 Dec 09 Change Unaudited Unaudited For the six months ending $m $m $m Total gross income 68.5 70.3 (1.8) Property expenses 18.3 17.9 (0.4) Net property income 50.2 52.4 (2.2) Indirect expenses 3.1 4.8 + 1.7 EBIT 47.1 47.6 (0.5) Net interest expense (11.0) (9.
Slide 6: Balance Sheet
Balance Sheet Page 6 Balance Sheet 31 Dec 10 30 Jun 10 YTD Unaudited Audited Movement $m $m $m Property assets 1,279.4 1,276.8 + 2.6 Other 22.0 22.6 (0.6) Total assets 1,301.4 1,299.3 + 2.1 Bank debt 268.0 262.0 + 6.0 1 Deferred tax liability 74.4 71.4 + 3.0 Other 31.3 33.4 (2.1) Total liabilities 3
Slide 7: Capital Management
Capital Management Page 7 Strong balance sheet with significant Key metrics 31 Dec 2010 headroom to covenants. Debt drawn $268m Gearing 23% Refinancing of FY12 facility expiries Weighted facility expiry 1 yr underway. Weighted average debt cost (incl margin & line fee) 7.85% 92% hedged therefo
Slide 8: Earnings Quality
Earnings Quality Page 8 Top 15 Customers (by Gross Rental) High quality and diversified customer base Westpac Government departments occupy 27% of the total PwC portfolio by NLA and 45% of the Wellington portfolio. MAF Westpac is the largest corporate customer, 5.4% of Buddle Findlay gross incom
Slide 9: Earnings Outlook
Earnings Outlook Page 9 FY11 operating earnings forecast at 5.9 cps to 6.1 cps, consistent with FY10. Earnings outlook for FY12 and beyond impacted by: – Higher debt costs expected following refinance. – Loss of building depreciation impacting earnings. – Portfolio vacancy due to Westpac departu
Slide 10: Governance and Fee Structure
Governance and Fee Structure Page 10 Key Changes Old Structure New Structure • Majority of Board comprises independent directors. • Appointed by shareholders of Director Appointment Independent directors Manager. appointed by shareholders of ANO. • 0.55% of first $1b 0.45% of $1b-$1.5b 0.35% greater
Slide 11: Section 2 – Portfolio Operations
Section 02 – Portfolio Operations
Slide 12: Portfolio Overview
Portfolio Overview Page 12 Overview Key Metrics Portfolio Auckland Wellington Portfolio Value ($m) $1,279 m $606 m $673 m Stronger leasing enquiry resulting in 35 new leases/renewals and 13 WALT (years) 4.6 yrs 3.8 yrs 5.2 yrs new customers. Occupancy % - by income 92% 85% 98% Occupancy increase
Slide 13: Portfolio Composition
Portfolio Composition Page 13 Property City Value WALT Occupancy PWC Tower AKL $212 m 3.1 yrs 95% ANZ Centre AKL $171 m 2.9 yrs 96% % of Sector Rent State Insurance Tower WEL $121 m 3.9 yrs 94% Roll Vodafone on the Quay WEL $98 m 3.4 yrs 97% Office 81.7% AMP Centre AKL $91 m 6.3 yrs 95% Car Parks 9.
Slide 14: New Leasing
New Leasing Page 14 Strong leasing over the half Secured 35 new leases/renewals and 13 new customers. New customers of note include. Property Customer NLA (m2) Lease Term (yrs) 21 Queen St SFO 913 m² 12 Years 21 Queen St Willis 914 m² 6 Years 151 Queen St Swire Shipping 763 m² 3 Years 151 Queen St
Slide 15: Leasing Activity Existing Customers
Leasing Activity Existing Customers Page 15 Property Customer NLA (m2) Lease Term (yrs) 125 The Terrace Minter Ellison Rudd Watts 2,279 m² 15 Years 151 Queen St CMC Markets 320 m² 6 Years 151 Queen St Quicksilver 264 m² 10 Years 21 Queen St AMP Capital 914 m² 12 Years AMP Centre Southern Cross Trave
Slide 16: Lease Expiry
Lease Expiry Page 16 Lease Expiry by NLA Wellington Auckland 50% 40% 30% 20% 10% 0% Vacant Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Jun 17 Jun 18 Jun 19 Jun 20 Beyond NLA ANZO Interim Results, 31 December 2010
Slide 17: Review Profile
Review Profile Page 17 FY12 Lease event profile Review Mechanism % by total NLA % of total events CPI 1% 4% Fixed 2% 7% Market - Ratchet 8% 22% Market Review 10% 30% Market - Expiry 12% 37% Total 33% 100% One third of portfolio (by NLA) has a lease event in FY12. 30% of all portfolio income will
Slide 18: Selected Property Update
Selected Property Update Page 18 151 Queen Street 21 Queen Street 125 The Terrace WALT: 2.7 yrs 3.3 yrs 7.3 yrs 7.8 yrs 2.4 yrs 4.4 yrs Occupancy: 61% 75% 11% 30% 100% 100% Leasing: • Swires • AMP Capital • NZQA • Goodman Group • Willis • Minter Ellison Rudd Watts • Quicksilver • SFO • C
Slide 19: Auckland CBD Office Market Vacancy Rate
Auckland CBD Office Market Page 19 70,000 25% Outlook 60,000 Existing vacancy above 20% long term average. Vacant Space sqm 50,000 Positive absorption Vacancy Rate 40,000 15% expected in line with GDP 30,000 growth over 2-4 years. 10% 20,000 Potential of new supply 5% for ANZ critical to marke
Slide 20: Wellington CBD Office Market Vacancy Rate
Wellington CBD Office Market Page 20 Outlook 25,000 25% Forecast vacancy below 20,000 20% long term average. Majority of vacant space Vacant Space sqm Vacancy Rate 15,000 15% in B grade or below. Monitor government 10,000 10% strategy of targeting certain ‘density ratios’. 5,000 5% Northward
Slide 21: Section 3 – Conclusion and Outlook
Section 03 – Conclusion and Outlook
Slide 22: Conclusion and Outlook
Conclusion and Outlook Page 22 Earnings for the 6 months are consistent with expectations and full year earnings of 5.9 to 6.1 cps. Refinancing of FY12 debt expiries underway. Prime leasing market in Wellington is proving resilient, although small decline in rents is possible. Auckland leasi