Stride Property Group · NZX:SPG
Stride Property — DNZ Property Fund — Investor Presentation (June 2012)
39 slides from Stride Property's investor presentation, June 2012
Slide 1: Shareholder Briefings 2012
UNZ Property SHAREHOLDER BRIEFINGS 2012 One entity One vision’
Slide 2: Agenda & Contents
2 Agenda & Contents Highlights Financial Performance Paul Duffy Chief Executive Capital Management Portfolio Overview Patrick O’Reilly GM Property Market Overview Shareholder Overview Stephen Reid Manager Analytics & Investor Relations Outlook Paul Duffy Chief Executive This DNZ Property Fund Limite
Slide 3: DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
3 DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 4: Highlights
4 Highlights (31 March 2011 figures in brackets) OPERATING PROFIT BEFORE TAX Operating profit before tax of UP 32% $28.8m ($21.8m) up 32% on prior year Distributable profit of $27.8m or 11.22 cents per share ($21.9m or 9.60 cents per share) Net rental income of $52.9m ($52.0m) DNZ PROPERTY FUND LIMI
Slide 5: Highlights
5 Highlights (31 March 2011 figures in brackets) LVR Loan to value ratio (LVR) 40.6% 40.6% (40.4%) ANNUAL FY12 Implementation of a revised DIVIDEND $300m term debt bank facility with 8.5 cents expected annual savings of approximately $2.0m PER SHARE TOTAL Increased cash dividend for full SHAREHOLDER
Slide 6: Highlights
6 Highlights (31 March 2011 figures in brackets) PORTFOLIO OCCUPANCY Asset values stable as at 31 98.7% March 2012 189 lease transactions over PORTFOLIO WALT 232,122m2 5.4 years 5.4 yrs Occupancy increased to 98.7% (97.9%) STABLE PORTFOLIO VALUATION Weighted average lease term $658.3m (WALT) extende
Slide 7: Highlights
7 Highlights (31 March 2011 figures in brackets) ACQUISITIONS Purchased three Foodstuffs $65.2m supermarkets in Napier, New Plymouth and Wellington, and Bunnings in Mt Roskill, Auckland for a total of $65.2m Further de-risking of the portfolio through the disposal of one STABLE Auckland and two Well
Slide 8: Acquisitions
8 Acquisitions Foodstuffs Portfolio Three supermarkets in Napier, New Plymouth and Wellington Settled 4 October 2011 $40.7m 18 year leases to Foodstuffs (Wellington) Co-op Limited Foodstuffs DNZ’s 5th largest tenant by contract rental Annual rent review mechanism DNZ PROPERTY FUND LIMITED - SHAREHOL
Slide 9: Acquisitions
9 Acquisitions Bunnings, Mt Roskill, Auckland Settled 6 March 2012 $24.5m 15 year lease to Bunnings NZ Limited (Wesfarmers) Bunnings elevated to DNZ’s largest tenant by contract rental Annual rent review mechanism DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 10: Financial Summary
10 Financial Summary As at As at 31 March 2012 31 March 2011 ($ millions) ($ millions) Property values1 658.3 637.7 Bank debt drawn 267.3 252.9 Bank loan to value ratio2 40.6% 40.4% Equity 381.0 382.3 Shares on issue3 247.4 246.6 NTA per share4 $1.53 $1.54 Adjusted NTA per share5 (refer $1.55 $1.55
Slide 11: Capital Management
11 Capital Management As at Covenant Covenant 31 March 2012 Loan to Value Ratio (Bank Debt / Property Values) < 50% 40.6% Interest Cover Ratio (EBIT / Interest and Financing > 1.75 x 2.62 Costs) Fully Leased Unexpired Term1 > 3.0 years 5.18 years Gross realisation of $51.9m from asset sales The use
Slide 12: Debt Facility Summary
12 Debt Facility Summary As at As at Bank Facility 31 March 31 March 2012 2011 Facility limit (ANZ, BNZ, CBA) $300m $350m Balance drawn $267m $253m Balance undrawn $33m $97m Weighted average cost of debt 6.16% 7.34% (incl. margins & line fees) Weighted maturity of facility 3.1 years 2.5 years Percen
Slide 13: DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
13 DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 14: Portfolio Summary
14 Portfolio Summary As at As at As at Overview 31 March 31 March 30 June 2011 2012 2012 Properties 50 51 51 Tenants 283 252 252 Net Lettable Area (m2) 371,481 379,965 379,960 WALT (years) 4.3 5.4 5.6 Occupancy Rate (by 97.9% 98.7% 98.6% area) Asset Valuation $638m $658m $658m* * 31 March 2012 valua
Slide 15: Diversification by Sector and Location
15 Diversification by Sector and Location DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 16: Diversification By Tenant
16 Diversification By Tenant DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 17: Sustainable Cashflow - Quality of Tenants
17 Sustainable Cashflow - Quality of Tenants FY12 Transactions Area Term Annual Commencement Contract Tenant (m2) (years) Rental ($) Goodyear & Dunlop Tyres1 September 2015 9,727 5.5 938,521 DDB2 June 2012 3,659 6 921,001 healthAlliance April 2012 2,141 3 684,420 NZ Post September 2011 6,027 6 549,6
Slide 18: Sustainable Cashflow - Tenant Commitment
18 Sustainable Cashflow - Tenant Commitment As at As at As at Overview 31 March 31 March 30 June 2011 2012 2012 WALT (years) 4.3 5.4 5.6 Occupancy Rate (by area) 97.9% 98.7% 98.6% DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 19: Sustainable Cashflow - Low Expiry Risk
19 Sustainable Cashflow - Low Expiry Risk Lease Expiry Profile As at 31 March 2012 DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 20: Sustainable Cashflow - Low Expiry Risk
20 Sustainable Cashflow - Low Expiry Risk Lease Expiry Profile As at 30 June 2012 FY13 10.86% reduced to 4.70% & FY14 10.54% reduced to 7.65% (Beca sale reduces to 5.47%) DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 21: Proactive Management Approach
21 Risk Management Summary Diversification Sustainable Cashflow Location Quality of Tenants Sector Quality of Assets Tenant WALT Asset Occupancy Lease Expiry Profile Proactive Management Approach DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 22: Seismic Review
22 Seismic Review DNZ is well advanced on completing seismic reviews of all its properties Initial Evaluation Procedure (IEP) reports are being completed on all properties within the portfolio that were built prior to 2000 All office properties undergoing Detailed Engineering Evaluations (DEE) Winst
Slide 23: Seismic Review
23 Seismic Review The DEE review of DNZ’s Wellington office properties that were built prior to 2000, have received Grade “A” ratings - “Low Risk” properties Expected to be completed by the third quarter of the current financial year DNZ Target > 67% (“Low Risk”) Source: BECA DNZ PROPERTY FUND LIMIT
Slide 24: NZ Property Returns
24 NZ Property Returns DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 25: International Property Returns
25 International Property Returns DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 26: DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
26 DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 27: NZX 50 Index
27 NZX 50 Index DNZ moved from 0.83% weighting of the index to 0.90% following the June 2012 Quarterly Index Review (Based on a pure free float methodology) Source: NZX 18 June 2012 DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 28: DNZ Shareholders
28 DNZ Shareholders DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 29: Listed Portfolio Investment Entity (PIE)
29 Listed Portfolio Investment Entity (PIE) DNZ’s distributable cashflow is higher than its taxable income due to depreciation allowances PIE regime allows these additional cashflows to be distributed to investors tax free Dividends will generally contain two elements: Fully imputed dividend – taxed
Slide 30: Listed Portfolio Investment Entity (PIE)
30 Listed Portfolio Investment Entity (PIE) DNZ Property Dividend XYZ Company (non PIE) Profit $100.00i Profit $100.00_ Tax* ($20.00) Tax* ($20.00) Distributable Profit $80.00i Distributable Profit $80.00 _ Gross Dividend $100.00i Gross Dividend $100.00_ Imputation Credit ($20.00) Imputation Credit
Slide 31: Total Returns Since Listing
31 Total Returns Since Listing NZX Gross Returns* 68.10% 33.34% 12.45% Source: IRESS 29 June 2012 10 Years Returns Index to 30 June 2012 NZSX Property Gross 8.9% NZSX50 Gross 5.4% *Assumes the reinvestment of dividend (but not imputation credits) on the ex date DNZ PROPERTY FUND LIMITED - SHAREHOLDE
Slide 32: Listed Property Market
32 Listed Property Market DNZ Share Price (as at 29 June 2012) $1.48 DNZ NTA (as at 31 March 2012) $1.53 Price to NTA 96.7% Sector Average Price to NTA 100.9% DNZ Forecast Cash Dividend for FY13 9.0 cents Forecast Cash Yield 6.1% Forecast Gross Yield (For 30% Tax Payer) 8.7% 2013 Sector Average Gros
Slide 33: Dividend Reinvestment Plan
33 Dividend Reinvestment Plan The Board is currently considering the reintroduction of a Dividend Re-Investment Plan (DRP) DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 34: DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
34 DNZ PROPERTY FUND LIMITED - SHAREHOLDER BRIEFINGS 2012
Slide 35: Why DNZ…
35 Why DNZ… Tax effective PIE structure Defensive Property Investment Strong Board and Governance Well Managed Scale and Diversification (28th largest on NZX) Solid KPI’s Occupancy 99% WALT 5.6 years Top 10 Tenants – Confidence of rental income Bunnings, Countdown (Progressive), NZ Government, Fletc
Slide 36: Outlook
36 Outlook Capital Management Continue to actively manage DNZ’s hedging profile On market share buyback still in 12 month window Bank debt in low 40% range Strategy Increasing ownership in the Auckland region Pre-development planning for Johnsonville Shopping Centre Continue with portfolio review of
Slide 37: Outlook
37 Outlook Outlook Low vacancy levels across industrial, retail and office sectors Valuation levels are stable Continue to manage the $105m Diversified NZ Property Fund Limited for Australian institutional investors Low expiry risk within the portfolio for FY13 & FY14 Expectation that DNZ is in a ta
Slide 38: Outlook
38 Outlook Summary Portfolio well positioned in what continues to be a challenging business environment Maximise Shareholder returns Cash dividend guidance 9.0 cents per share FY13 Continue to look for new opportunities, and other initiatives, to add value and further enhance the quality of our port
Slide 39: Thank You
THANK YOU Important Notice: Certain statements in this presentation constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors (many of which are beyond the control of DNZ) which may cause the actual results, p
DNZ Property Fund — Investor Presentation (June 2012) on 6ix