Stride Property Group · NZX:SPG
Stride Property — DNZ Property Fund — FY2014 Earnings Presentation
29 slides from Stride Property's earnings presentation, May 22, 2014
Slide 1: DNZ Annual Results for the Year Ended 31 March 2014
Ay | DNZ ANNUAL RESULT. Property FORTHE YEAR ENDED 37 MARCH 2014 =_ —- Pra
Slide 2: Agenda & Contents
AGENDA & CONTENTS Page Tim Storey Introduction Chairman Peter Alexander Highlights 3 Chief Executive Officer Financial Performance 6 Jennifer Whooley Chief Financial Officer Capital Management 10 Portfolio Overview 12 Peter Alexander Acquisitions & Developments 17 Chief Executive Officer Conclusion
Slide 3: Highlights
HIGHLIGHTS DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 3
Slide 4: Highlights: Financial Performance
HIGHLIGHTS (31 MARCH 2013 FIGURES IN BRACKETS) Financial Performance Net rental income of $57.4m ($53.5m) up 7.2%. Operating profit before other income and income tax of $35.0m ($31.3m) up 11.6%. Distributable profit1 before income tax of $35.0m ($29.8m) up 17.4%. Distributable profit after income t
Slide 5: Highlights: Portfolio, Acquisitions and Developments
HIGHLIGHTS (31 MARCH 2013 FIGURES IN BRACKETS) Portfolio Net 2.5% property portfolio valuation increase on a like for like basis1. Occupancy stable at 99.5% (99.6%). Weighted average lease term (WALT) 5.5 years (5.2 years). 199 lease transactions over 289,240m2 for a total annual rental of $46.2m. F
Slide 6: Financial Performance
FINANCIAL PERFORMANCE DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 6
Slide 7: Financial Performance: Consolidated Group
FINANCIAL PERFORMANCE CONSOLIDATED GROUP Actual Actual Variance 31 Mar 2014 31 Mar 2013 ($ millions) ($ millions) $ millions % Net rental income 57.4 53.5 3.8 7.2 Management fee income 1.5 1.3 0.2 14.7 Corporate expenses (9.0) (7.9) (1.1) (14.2) Operating profit before net finance expenses, other in
Slide 8: Distributable Profit
DISTRIBUTABLE PROFIT CONSOLIDATED GROUP Actual Actual Variance 31 Mar 2014 31 Mar 2013 ($ millions) ($ millions) $ millions % Net profit before income tax 49.0 53.5 (4.5) (8.5) NZ IFRS and other adjustments: - Net change in fair value of investment properties (18.7) (16.4) (2.3) (14.0) - Net change
Slide 9: Financial Summary
FINANCIAL SUMMARY As at As at 31 Mar 2014 31 Mar 2013 ($ millions) ($ millions) Property values1 780.2 667.0 Bank debt drawn 268.2 246.4 Bank loan to value ratio 34.4% 36.9% Equity 505.2 408.4 Shares on issue 296.9 250.4 NTA per share2 $1.69 $1.62 Adjusted NTA per share3 (refer Appendix 2) $1.69 $1.
Slide 10: Capital Management
CAPITAL MANAGEMENT DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 10
Slide 11: Capital Management
CAPITAL MANAGEMENT As at As at As at 31 Mar 31 Mar 31 Mar Covenant 2014 2014 2013 Loan to Value Ratio (Bank Debt / Property Values) ≤ 50% 34.4% Bank Facility limit $400m $300m (ANZ, BNZ, CBA, Westpac) Interest Cover Ratio (EBIT / Interest and Financing Costs) ≥ 1.75 x 3.33x Bank Facility drawn $268m
Slide 12: Portfolio Overview
PORTFOLIO OVERVIEW DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 12
Slide 13: Portfolio Summary
PORTFOLIO SUMMARY As at As at Portfolio Contract Rental1 by Region Overview 31 Mar 2014 31 Mar 2013 As at 31 March 2014 Properties 46 48 Tenants 292 258 Net Lettable Area (m2) 364, 916 354,502 WALT (years) 5.5 5.2 Occupancy Rate (by area) 99.5% 99.6% Asset Valuation $780.2m $667.0m Portfolio Contrac
Slide 14: Major Lease Transactions Completed
MAJOR LEASE TRANSACTIONS COMPLETED Annual Contract Tenant Property Commencement Area (m2) Term (years) Rental ($) Westpac 1 Grey Street, Wellington Feb 2014 4,266 4 1,331,648 Ministry of Health 650 Great South Road, Auckland Dec 2013 1,300 6 326,820 Chamber of Commerce 65 Chapel Street, Tauranga Nov
Slide 15: Remaining Lease Expiries FY15 & FY16
REMAINING LEASE EXPIRIES FY15 & FY16 FY15 Net Lettable % of Property Tenant Area (m2) Contract Rental Johnsonville Retail, Wellington Various 3,046 1.93 Cnr Mt Wellington Highway & Penrose Road, Auckland Countdown 5,502 1.77 650 Great South Road, Auckland Unisys (Retained (post balance date) for 5 y
Slide 16: Portfolio Occupancy 99.5%
PORTFOLIO OCCUPANCY 99.5% Occupancy (%) Vacancy (m2) Total Area (m2) Occupancy (%) Property 31 Mar 2014 31 Mar 2014 31 Mar 2014 31 Mar 2013 650 Great South Road, Auckland 90.1 824 8,354 100.0 80 Greys Avenue, Auckland 100.0 - 5,450 94.9 Other 100.0 - 48,005 100.0 OFFICE TOTAL 98.7 824 61,809 99.6 8
Slide 17: Acquisitions & Developments
ACQUISITIONS & DEVELOPMENTS DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 17
Slide 18: Acquisition Strategy: Auckland Growth Nodes
ACQUISITION STRATEGY AUCKLAND GROWTH NODES Silverdale Centre and Westgate Mall development land are located in major Auckland growth nodes and fast growing residential catchments. Silverdale Centre Westgate DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 18
Slide 19: Acquisitions: Silverdale Centre
ACQUISITIONS SILVERDALE CENTRE Opened in October 2012. Acquisition price of $78.0m, settled 31 May 2013. Located in a fast growing residential catchment. 36 bulk and specialty retailers, including Warehouse Stationery, Noel Leeming, Number One Shoes, Supercheap Auto, Postie, Lighting Plus, Beds R Us
Slide 20: Developments: Westgate Mall
DEVELOPMENTS WESTGATE MALL DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 20
Slide 21: Developments: Westgate Mall
DEVELOPMENTS WESTGATE MALL Enclosed shopping centre of approximately net 27,000m² (34,000m2 gross) Over 45% pre-leased: Over 90 speciality stores, 1,100 carparks, Farmers department store (8,200m2) and a Countdown supermarket (4,200m2). Construction commenced in April 2014 - Fletcher Construction ap
Slide 22: Developments: O'Rorke Road, Penrose, Auckland
DEVELOPMENTS O’RORKE ROAD, PENROSE, AUCKLAND AA Insurance Limited New 1,400m2 warehouse and office facility. Nine year lease. Completed in October 2013. 31 March 2014 valuation $3.35m. Hydraulink Fluid Connectors Limited New 3,390m2 integrated facility. 12 year lease with two yearly rent reviews to
Slide 23: Project Update: Johnsonville Shopping Centre
PROJECT UPDATE JOHNSONVILLE SHOPPING CENTRE The site is strategically located with strong demographic characteristics. The main trade area population is very affluent, with average household incomes 26.5% above the New Zealand average. Centre occupancy is being maintained. Pre-development planning i
Slide 24: Conclusion
CONCLUSION DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 24
Slide 25: Conclusion: Focused on Driving Shareholder Returns
CONCLUSION Strategic review in progress. Organisation restructure completed. Focus on driving shareholder value and total returns. Open Westgate Mall development – October 2015. Progress Johnsonville Shopping Centre development planning. Continue to look for initiatives to add value and enhance retu
Slide 26: Appendices
APPENDICES DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 26
Slide 27: Appendix 1: Valuation Summary
APPENDIX 1 VALUATION SUMMARY 31 Mar 2014 Revaluation Revaluation Market Cap Market Cap 31 Mar 2014 Revaluation Revaluation Market Cap Market Cap Address Valuation Movement1 Movement1 Rate 2014 Rate 2013 Address Valuation Movement1 Movement1 Rate 2014 Rate 2013 $ % $ % % $ $ % % % 33 Corinthian Drive
Slide 28: Appendix 2: Bridge Graphs (FY13 to FY14 Movements)
APPENDIX 2 BRIDGE GRAPHS (FY13 TO FY14 MOVEMENTS) DNZ PROPERTY FUND LIMITED - ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014 - 22 MAY 2014 28
Slide 29: Thank You
DNZ Property Fund Limited THANK YOU Level 2, 80 Greys Avenue, Auckland 1010 PO Box 6320, Wellesley Street, Auckland 1141 Tel: +64 9 912 2690 Fax: +64 9 912 2693 www.dnzproperty.com Important Notice: The information in this presentation is an overview and does not contain all information necessary to