Slide 1: Welcome to the 2015 Annual Results
WELCOME TO THE 2015
Slide 2: Agenda
AGENDA 1. Highlights 2. Portfolio 3. Market & Strategy 4. 2015 Annual Results 5. Capital Management 6. Closing & Questions 7. Appendices PROPERTY FOR INDUSTRY 2015 ANNUAL RESULTS BRIEFING 2
Slide 3: Highlights
Slide 4: Highlights
HIGHLIGHTS • Profit after tax for the year of $72.8 million or 17.25 cents per share • Distributable profit for the year of 7.42 cents per share • Fourth quarter cash dividend of 2.00 cents per share, total cash dividends for the year of 7.30 cents per share • Strong balance sheet maintained via rig
Slide 5: Portfolio
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Slide 6: Portfolio Snapshot
PORTFOLIO SNAPSHOT • PFI’s portfolio is diversified across 84 properties and 141 tenants, with 99.6% occupancy and a weighted average lease term of 5.18 years 31 December 2015 31 December 2014 Valuation $986.6m $876.0m Number of properties 84 79 Number of tenants 141 134 Contract rent $72.3m $65.8m
Slide 7: Portfolio Performance
PORTFOLIO PERFORMANCE • Valuations • $46.5 million or 4.9% portfolio revaluation uplift to $986.6 million • Revaluation uplift reflects leasing activity, favourable rent reviews and firming of yields • Passing yield firmed from 7.51% to 7.33% • Leasing • 27 leases agreed over more than 90,000 sqm of
Slide 8: Lease Events
LEASE EVENTS 2016 Lease Expiry Profile: • Balanced spread of 2016 lease events, almost 20% of events market related, provides opportunity to access projected market rental growth: 2016 Expiries: Tenant % Rent Roll Penrose Portfolio (5 Properties) Sistema Plastics 3.1% 36 Neales Road Mainfreight 1.5%
Slide 9: Market & Strategy
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Slide 10: Market Update
MARKET UPDATE • The industrial property sector continued to perform well during 2015: • Total returns of 10.7% (MSCI), Auckland returns particularly strong • Industrial property capitalisation rates or yields now lower than in 2007, the peak of the last cycle • Private and institutional investor dem
Slide 11: Strategy
STRATEGY • PFI’s strategy is to invest in quality industrial property in New Zealand’s main urban centres • The company aims to drive shareholder returns by: • Managing the vacancy and upcoming lease expiries • Opportunistically pursuing both core and value-add industrial acquisitions • Maximising u
Slide 12: Acquisitions
ACQUISITIONS Year Ended December 2015 Year Ended December 2014 Number of properties Six One Total purchase price $48.2m $15.4m Tenant(s) Pacific Asset Leasing, Sistema Plastics Masterpet Corporation Property description Generic industrial Generic industrial Average yield 7.7% purchase yield 7.6% pur
Slide 13: Developments
DEVELOPMENTS Year Ended December 2015 Year Ended December 2014 Number of properties Two One Development spend $25.9m $1.9m 1 $3.6m Various bulk store Tenant(s) N/A Z Energy NZ Ltd operators Industrial, bulk Property description Generic industrial Industrial, manufacturing storage Yield on incrementa
Slide 14: Divestments
DIVESTMENTS Year Ended December 2015 Year Ended December 2014 Number of properties One Six Net sales proceeds $9.5m $26.6m Carrying value $9.0m $28.7m Gain / (loss) on sale $0.5m ($2.1m) • Almost $40 million of property disposed of over the last two years • Approximately 5% of the portfolio still co
Slide 15: 2015 Annual Results
Slide 16: Operating Revenue
OPERATING REVENUE • Operating revenues of $66.9 million up 4.9% • Increases due to acquisitions ($2.5 million) and rent reviews and fixed rent adjustments ($0.9 million) partially offset by decreases due to disposals ($0.9 million) PROPERTY FOR INDUSTRY 2015 ANNUAL RESULTS BRIEFING 16
Slide 17: Comprehensive Income
COMPREHENSIVE INCOME For the year ended (audited, $000) Dec 2015 Dec 2014 Change Total operating revenue 66,927 63,772 3,155 • Operating revenues up $3.2 million or 4.9%, refer slide Non-recoverable property costs (2,183) (1,879) (304) 16: operating revenue Interest expense and bank fees (19,398) (1
Slide 18: Distributable Profit (Cents per Share)
DISTRIBUTABLE PROFIT (CENTS PER SHARE, CPS) • Distributable profit per share down 0.11 cps or 1.5% • 2015 dividends of 7.30 cps, in line with guidance • Amendment to the definition of distributable profit, include management performance fees net of tax (previously excluded) and lift allowable pay-ou
Slide 19: Investment Properties
INVESTMENT PROPERTIES • $48.2 million of acquisitions completed, refer slide 12: acquisitions • Unrealised fair value gain of $46.5 million or 4.9%, refer slide 7: portfolio performance • $23.2 million of capital spent on portfolio, including developments at 9 Narek Place, 124 Hewletts Road, & 54 Ca
Slide 20: Net Tangible Assets (Cents per Share)
NET TANGIBLE ASSETS (CENTS PER SHARE, CPS) • Net tangible assets (NTA) per share up 10.3 cps or 7.9% to 140.5 cps • Increase in fair value of investment properties (refer slide 7: portfolio performance) partially offset by reduction in the fair value of financial instruments of $4.0 million or 0.9 c
Slide 21: Capital Management
Slide 22: Capital Management
CAPITAL MANAGEMENT • Strong balance sheet maintained via a number of capital management initiatives: • Equity: • $47.9 million raised via pro rata 1 for 12 renounceable rights offer • $2.8 million raised from the Q1 and Q3 dividend reinvestment • Loan facilities: active management of facilities and
Slide 23: Loan Facilities
LOAN FACILITIES • Facilities refinanced Q2 2015, limit increased $25 million, average term extended, cost reduced • Subsequent to year-end, refinanced again, average term extended to 4.7 years, cost reduced December 2015 December 2014 Facilities Drawn (excluding overdraft) $331.7m $313.5m Facilities
Slide 24: Hedging
HEDGING • Interest rate hedging profile extended, average duration increased to 3.5 years from 2.9 years PROPERTY FOR INDUSTRY 2015 ANNUAL RESULTS BRIEFING 24
Slide 25: Closing & Questions
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Slide 26: Closing & Questions
CLOSING & QUESTIONS • Strong and stable high quality industrial portfolio continues to perform: occupancy 99.6%, 2016 expiries of 9.3% and WALT of 5.18 years • Industrial property sector continuing to perform well • On strategy acquisition, development and divestment activity • Robust result: profit
Slide 27: Appendices
APPENDICES /APP
Slide 28: Appendix 1: Distributable Profit
APPENDIX 1: DISTRIBUTABLE PROFIT For the year ended ($000, unless noted) Dec 2015 Dec 2014 Dec 2015 Dec 2014 management performance fees net of management performance fees net of tax excluded (audited) tax included (unaudited) Profit and total comprehensive income after income 72,825 59,877 72,825 5
Slide 29: Appendix 2: Financial Position
APPENDIX 2: FINANCIAL POSITION As at (audited, $000, unless noted) Dec 2015 Dec 2014 Change Investment properties 986,565 876,005 110,560 Goodwill 29,086 29,086 - Other assets 11,593 1,788 9,805 Total assets 1,027,244 906,879 120,365 Borrowings 330,920 312,797 18,123 Deferred tax liabilities 10,890
Slide 30: Disclaimer
DISCLAIMER The information included in this presentation is provided as at 15 February 2016. Neither Property For Industry Limited (PFI) nor PFIM Limited (PFIM), the manager of PFI, guarantee the repayment of capital or the performance referred to in this presentation. Past performance is not a reli