Argosy Property Limited · NZX:ARG
Argosy Property — BNZ/NAB First Look Investor Conference 2018
27 slides from Argosy Property's conference presentation, Oct 30, 2018
Slide 1: BNZ/NAB First Look Investor Conference
BNZ/NAB First Look Investor Conference Sydney, 30-31st October 2018 Strength in diversity Argosy Property Limited www.argosy.co.nz
Slide 2: Agenda
Agenda 1. Argosy at a Glance 3 2. History 4 3. Investment Strategy / Policy 5 4. Financials 12 5. Market Update 17 6. Appendices 20 Note: Due to rounding, numbers presented in this presentation may not add up exactly to the totals provided and percentages may not exactly reflect absolute figures. Al
Slide 3: Argosy at a Glance
Argosy at a Glance NUMBER OF BUILDINGS NUMBER OF BUILDINGS NUMBER OF BUILDINGS NUMBER OF BUILDINGS 36 16 8 60 BOOK VALUE OF ASSETS ($M) BOOK VALUE OF ASSETS ($M) BOOK VALUE OF ASSETS ($M) BOOK VALUE OF ASSETS ($B) $643.1 $578.9 $302.7 $1.525 OCCUPANCY (BY INCOME) OCCUPANCY (BY INCOME) OCCUPANCY (BY
Slide 4: History
History 1. 2002 => Listed in Dec-02 as Paramount Property Trust with external management structure. 2. 2003 => Acquires $280m unlisted MFL property portfolio. Fund Manager ING acquires management company and 3 GFC rebrands to ING Property Trust (ING.NZ). 1 2 3. 2005 => Acquired Urbus Properties Grou
Slide 5: Investment Strategy/Policy
Investment Strategy/Policy 5
Slide 6: Investment Strategy/Policy
Investment Strategy/Policy Investment Strategy Consists primarily of Core and Value Add properties. Core properties to be between 75-90% of the portfolio by value. Value add properties to be between 10-15% of the portfolio by value. Investment Policy Target sector bands (Industrial 40-50%, Office 30
Slide 7: Portfolio Transformation
Portfolio Transformation Improved portfolio quality. Asset allocation bands adjusted for the environment. Stronger business – 4yr GDI growth of 4.6% p.a. Growing exposure to green assets / sustainability focus (~13% of portfolio by value). Portfolio by Sector Portfolio by Mix Portfolio by Region 7%
Slide 8: Portfolio History
Portfolio History Acquisitions and developments key drivers of portfolio growth in recent years Industrial 36% Industrial 42% Office 36% Office 38% Retail 28% Retail 20% 8
Slide 9: Auckland & Wellington Focus
Auckland & Wellington Focus A diversified portfolio of high quality assets and tenants Geographic distribution of portfolio Value add opportunities with existing and potential new tenants Data as at 31 July 2018 9
Slide 10: Development Programme
Development Programme 15-21 Stout Street, 82 Wyndham Street, Highgate Business Park, Wellington Auckland Auckland Completion: 2014 2017/18 2018 NLA / WALT: 21,000sqm / 7.9yrs 6,000sqm / 7.2yrs 10,600sqm / 9.4yrs Green rating: 5 Green Star Built Targeting 5 Star Targeting 4 Star NABERSNZ rating: 5 St
Slide 11: Lease Maturity
Lease Maturity Lease maturity profile relatively stable over the medium term, no material single tenant exposure Data as at 31 March 2018 11
Slide 12: Financials
FINANCIALS Change image 12
Slide 13: Argosy 5-yr History
Argosy 5-yr History Our focus is delivering improved portfolio quality and is reflected in our strong portfolio metrics. Occupancy WALT (years) 100.0% 7.00 6.00 80.0% 5.00 60.0% 4.00 3.00 40.0% 2.00 20.0% 1.00 0.0% 0.00 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Rent Rev iews - annualised inc
Slide 14: Argosy 5-yr history
Argosy 5-yr history Our portfolio transformation has delivered stronger earnings allowing steady dividend growth to shareholders. Net Property Income Net Distributable Income (cps) $110 6.8 $100 6.6 $90 6.4 $80 6.2 $70 6.0 $60 5.8 $50 5.6 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Debt-to-tot
Slide 15: Gearing, Funding & Interest Rate Management
Gearing, Funding & Interest Rate Management Further divestment of non Core assets will see the portfolio repositioned to the lower end of its retail band (15-25%) and higher end of industrial band (40-50%) over next 12-18 months. Target policy gearing range of between 30-40%. Argosy maintains strong
Slide 16: Dividends
Dividends FY19 dividend guidance of 6.25 cents per share, an increase of ~1.0% on the previous year. The FY19 dividend reflects the Boards wish for shareholders to share in the continued strong results whilst allowing Argosy to maintain its momentum towards an AFFO based dividend policy by 2021. 6.2
Slide 17: Market Update
Market Update Change image 17
Slide 18: NZ Market Update
NZ Market Update Office Flexible working environments driving disconnect between employment growth and net absorption. Structural trend is occupiers relocating taking ~10% less space per person than they had previously. Rental growth impacted by new supply and there has been an increase in incentive
Slide 19: Outlook
Outlook New Zealand economic outlook is still positive with economic growth forecast. Global volatility heightened, some flow through to local market. Interest rates expected to remain supportive over the next few years. Rental growth to continue. Green assets will continue to see increase in demand
Slide 20: Appendices
Appendices Argosy 20 WWW. argosy.co.nz
Slide 21: Board of Directors
Board of Directors Mike Smith - Chairman Peter Brook - Director Mark Cross - Director Extensive management and Extensive management Over 20 years of management corporate governance experience in New Zealand experience across UK, Australia experience in New Zealand including 20 years with Merrill and
Slide 22: Board of Directors
Board of Directors Stuart McLaughlan - Director Jeff Morrison - Director Andrew Evans - Director More than 25 years experience More than 35 years as a property Over 25 years commercial real across corporate New Zealand. lawyer, 29 of these as a partner estate and asset management at Russell McVeagh
Slide 23: Management
Management Peter Mence - CEO Dave Fraser – CFO An engineer by background, Peter has 35 years Has over 28 years in senior financial and general of experience in the property industry working management roles both in New Zealand and with Progressive Enterprises, Challenge overseas, including a period
Slide 24: Portfolio Metrics
Portfolio Metrics The strength of our diversified portfolio is in the breadth and depth of our tenant base and sectors they represent. Data as at 31 July 2018 24
Slide 25: Argosy at a glance
Argosy at a glance $1.52b $0.91b +170 Investment Portfolio Market capitalisation Property partners 5yr average* 5yr average* 60 99% 5.6yr No. of Properties Occupancy (by rental) WALT 5yr average* 36.6% 12.5% 19.1% Debt to total assets 10yr total return p.a1 5yr NTA growth Data as at 31 July 2018. *
Slide 26: Disclaimer
Disclaimer _ = i Ia a - -™. ae = == = = ae = WWW.argosy.co.nz
Slide 27: Disclaimer
Disclaimer This presentation has been prepared by Argosy Property Limited. The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain independent professional advice prior to making an
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