Argosy Property Limited · NZX:ARG
Argosy Property — Non-Deal Roadshow (February 2015)
37 slides from Argosy Property's roadshow presentation, February 2015
Slide 1: Investor Presentation
Investor Presentation Argosy Property Limited February/March 2015
Slide 2: Argosy Continued Momentum
Argosy CONTINUED MOMENTUM
Slide 3: Highlights
Highlights
Slide 4: Highlights of the year so far
Highlights of the year so far 1H15 Portfolio revaluation gain of $24.9 million (increase of 2.0%) 1H15 Net property income increased to $43.8 million (increase of 8.7%) 1H15 Gross distributable income increased to $29.1 million (increase of 22.7%) 1H15 Net distributable earnings 2.95 cents p
Slide 5: Summary Statistics
Summary Statistics as at 31 December 2014 Book value of properties $1,229.4m Number of properties 63 Average value of properties $19.5m Occupancy by rental 98.8% Weighted average lease term 5.51 years Number of tenants 190
Slide 6: Financial Overview
Financial Overview
Slide 7: Income Reconciliation
Income Reconciliation 50 5.2 (0.6) 0.7 (1.2) 47.4 45 43.3 40 35 30 25 20 15 10 5 0 Gross Property Acquisitions Disposals Rent reviews Other Gross Property $m Income Income 30 September 30 September 2013 2014
Slide 8: Financial Performance
Financial Performance HY15 HY14 Net property income $43.8m $40.3m Administration expenses $(3.8m) $(3.8m) Profit before financial income/(expenses) $40.0m $36.5m and other gains/(losses) Interest expense $(12.6m) $(12.9m) Gain/(loss) on derivatives $(9.1m) $16.0m Finance income $0.1m $0.1m Revaluati
Slide 9: Distributable Income
Distributable Income HY15 HY14 Profit before income tax $42.8m $39.7m Adjusted for: Investment disposal losses $0.5m $0.1m Derivative fair value adjustment $9.1m $(16.1m) Revaluation gains $(24.9m) - Depreciation recovered $1.6m - Gross distributable income $29.1m $23.7m Tax paid $(5.7m) - Net distr
Slide 10: Investment Properties
Investment Properties 1,300 24.9 (45.0) 27.8 (12.4) 1,250 1,226.3 1.0 1,222.6 1,200 1,150 1,100 1,050 1,000 950 900 Investment Capex Disposals Change in fair Transfer to Tenant Investment ` $m Properties value properties held Incentives Properties 31 March for sale 30 September 2014 2014
Slide 11: Movement in NTA per share
Movement in NTA per share 96 3.1 ( 0.3 ) 0.1 95.3 94 93.5 ( 1.1 ) 92 90 88 86 84 82 80 NTA Loss on Revaluation Deferred Tax Residual NTA cps 31 March Derivatives Gain on Earnings less 30 September 2014 Investment Dividends Paid 2014 Properties
Slide 12: Financial Position
Financial Position HY15 FY14 HY14 Shares on issue 798.1m 790.9m 783.9m Shareholders’ funds $760.7m $739.5m $700.2m Net tangible asset backing per share (cents) 95.3 93.5 89.3c HY15 FY14 HY14 Investment properties $1,222.6m $1,226.3m $1,130.9m Other assets $51.7m $6.1m $13.0m Total assets $1,274.3m $
Slide 13: Banking
Banking Loan to valuation ratio (LVR) – HY15 FY14 HY14 based on: Total borrowings $474.7m $449.5m $391.3m Fair market value of properties¹ $1,235.3m† $1,226.9m $1,119.5m† Not to exceed 50% 38.4% 36.6% 35.0% Interest cover ratio – based on HY15 FY14 HY14 EBIT/Interest and Financing Costs: Must exceed
Slide 14: Portfolio Overview
Portfolio Overview
Slide 15: Leasing Environment
Leasing Environment The New Zealand economy is still reasonably robust, with signs of good growth and a low inflation environment expected for 2015. Current forecasts signal the possibility of deflation in the next quarter with 2015 annual inflation expected to be at or around 1%. This points to
Slide 16: Leasing
Leasing Occupancy, tenant retention and lease expiries remain key focus areas for the asset management team. Occupancy (by rental) is stable at 98.8%¹, slightly increased from 98.7% at March 2014. Outstanding lease expiries for the period to 31 March 2015 have reduced to 3.1%¹ from 9.4% at 31
Slide 17: Lease Maturity
Lease Maturity LEASE EXPIRY PROFILE at 31 DECEMBER 2014 Total Expiry Vacancy Largest Expiry 11 40 22% % of portfolio (by income) 20% 35 18% 30 16% 22.5% 14% 32 9 25 No. of leases 28 12% 25 20 20 10% 13.3% 15 8% 34 6% 12.1% 12.6% 10 10.3% 9.4% 11 5 4% 10 14 6.2% 5 5 2% 3.1% 3.9% 3.7% 1.2% 1.7% 0% 0 T
Slide 18: Weighted Average Lease Term
Weighted Average Lease Term WALT remains in a strong position 5.91 5.77 5.68 5.51 5.30 5.30 5.24 5.00 5.00 4.92 4.84 4.84 4.70 4.37 4.20 MAR 2008 SEP 2008 MAR 2009 SEP 2009 MAR 2010 SEP 2010 MAR 2011 SEP 2011 MAR 2012 SEP 2012 MAR 2013 SEP 2013 MAR 2014 SEP 2014
Slide 19: Occupancy (by rental)
Occupancy (by rental) Occupancy remains at historically high levels 99.1% 99.1% 99.1% 98.8% 98.7% 97.3% 96.6% 96.3% 96.3% 96.3% 96.2% 95.8% 95.7% 94.6% 94.1% MAR 2008 MAR 2009 MAR 2010 MAR 2011 MAR 2012 MAR 2013 MAR 2014 SEP 2008 SEP 2009 SEP 2010 SEP 2011 SEP 2012 SEP 2013 SEP 2014
Slide 20: Acquisitions
Acquisitions Industrial Portfolio in Wellington In February 2015, Argosy acquired an industrial portfolio in Wellington for $59 million. The portfolio comprises 5 properties located in the Seaview and Grenada North areas of Lower Hutt. The acquisition was funded using Argosy’s existing debt facility
Slide 21: Developments
Developments The redevelopment at 15 Stout Street, Wellington was successfully completed on time with MBIE occupying in July 2014. The development of NZ Post House, Wellington is continuing and is expected to be complete by late FY17. Property Status Approx. Spend Expected Remaining (m) Completion 1
Slide 22: Valuations
Valuations Increase in property valuations of $24.9 million, up 2.0% on book values immediately prior to the revaluation. This is the first time since September 2009 that an independent valuation has been performed at the half year. The desk top valuation was performed due to evidence of a firmi
Slide 23: Strategy
Strategy
Slide 24: We have a clear investment strategy
We have a clear investment strategy marked by a diversified portfolio of desirable properties that attract high-quality, long-term tenants.
Slide 25: Portfolio Investment Strategy
Portfolio Investment Strategy Argosy is and will remain invested in a portfolio that is diversified by primary sector, grade, location and tenant mix. The portfolio will be in the primary Auckland and Wellington markets with modest tenant- driven exposure to provincial markets. Argosy’s portfolio co
Slide 26: Portfolio Mix as at 31 December 2014
Portfolio Mix as at 31 December 2014 TOTAL PORTFOLIO VALUE TOTAL PORTFOLIO VALUE PORTFOLIO MIX BY SECTOR BY REGION 4% 6% 5% 10% 25% 37% 24% 67% 38% 84% Target Target Target Retail 15 – 25% Auckland 65 – 75% Core 75 – 85% Office 35 – 45% Wellington 20 – 30% Value Add properties Industrial 35 – 45% Pa
Slide 27: Total Shareholder Return
Total Shareholder Return 1 ae 4, Soret aT ee: L 4 zn pe f= at wef i ne ov B= ——w = » www.argosy.co.nz
Slide 28: Total Shareholder Return – 1 Year
Total Shareholder Return – 1 Year 140 135 130 125 120 Gross Prices Indexed to 100 115 110 105 100 95 Oct-14 Mar-14 Nov-14 Dec-14 Jun-14 Jan-14 Feb-14 Apr-14 May-14 Jul-14 Aug-14 Sep-14 Jan-15 Argosy Property Limited NZ Property Gross Index NZX 50 Index
Slide 29: Total Shareholder Return – 5 Years
Gross Prices Indexed to 100 100 120 140 160 180 220 80 200 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Argosy Property Limited Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 NZ Property Gross Index Jul-13 Oct-13 Total Shareholder return – 5 Years Jan-14 Apr-14 NZX 50 Index Jul-14 Oct-14 Jan-1
Slide 30: Concluding comments
Argosy Concluding. comments
Slide 31: Concluding comments
Concluding comments Argosy’s operational metrics have continued to improve during FY15, with the portfolio’s occupancy levels at historically high levels and a weighted average lease term that is very solid. Repositioning within the portfolio has seen the disposal of non-Core assets and the acqu
Slide 32: Thank you
> www.argosy.co.nz
Slide 33: Appendix
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Slide 34: Office as at September 2014
Office as at 30 September 2014 NUMBER OF BUILDINGS 17 BOOK VALUE OF ASSETS ($M) $469.14 VACANCY FACTOR (BY RENT) 1.3% WALT (YEARS) 5.75
Slide 35: Industrial as at September 2014
Industrial as at 30 September 2014 NUMBER OF BUILDINGS 35 BOOK VALUE OF ASSETS ($M) $450.51 VACANCY FACTOR (BY RENT) 0.6% WALT (YEARS) 6.07
Slide 36: Retail as at September 2014
Retail as at 30 September 2014 NUMBER OF BUILDINGS 11 BOOK VALUE OF ASSETS ($M) $302.92 VACANCY FACTOR (BY RENT) 0.8% WALT (YEARS) 5.37
Slide 37: 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