Precinct Properties Nz Ltd & Precinct Properties Investments Ltd · NZX:PCT
Precinct Properties Nz Ltd & Precinct Properties Investments — Precinct Properties New Zealand — H1 FY2025 Earnings Presentation
34 slides from Precinct Properties Nz Ltd & Precinct Properties Investments's earnings presentation, Feb 20, 2025
Slide 1: FY25 Interim Result
FY25 Interim Result 20 February 2025
Slide 2: Agenda
Agenda Section 1: Highlights and key themes Section 2: Financial performance Section 3: Capital partnering Section 4: Portfolio update Section 5: Development update Section 6: Summary Appendices Precinct Properties – FY25 Interim Result 2
Slide 3: Operational highlights
Operational highlights Operational performance Financial performance Active capital management • 96% portfolio occupancy • $72.7 million investment portfolio • Refinanced $165m of maturing (FY24: 98%) Funds from Operations (FFO), retail bonds and USPP notes with consistent with prior comparable $200
Slide 4: Key themes
Key themes Economy Construction market • Ongoing weak domestic conditions as the • Activity indicators, including architects’ own- impacts of interest rate reductions are yet to office activity1, signal a continued weak pipeline flow through over the year ahead • Impacts differ by sector – occupier
Slide 5: Financial performance
Financial performance Precinct Properties – FY25 Interim Result 5
Slide 6: Financial performance
Financial performance For the 6 months ended 31 Dec 2024 31 Dec 2023 1 Δ +$3.2m $ millions Unaudited Unaudited Operating profit before indirect expenses $76.6 m $73.4 m +$3.2 m Corporate overhead expense ($2.4 m) ($2.7 m) +$0.3 m Increase in operating profit before Net interest expense ($29.1 m) ($1
Slide 7: Operating income
Operating income For the 6 months ended 31 Dec 2024 31 Dec 2023 1 Δ % Operating income reconciliation $ millions Unaudited Unaudited $79 m Directly held property funds from operations (FFO) $78 m $77 m Auckland office $42.0 m $37.2 m +$4.8 m +12.9% $76 m $75 m Wellington office $21.7 m $21.3 m +$0.4
Slide 8: FFO and AFFO
FFO and AFFO For the 6 months ended 31 Dec 2024 31 Dec 2023 1 Δ % $ millions Directly held property FFO Cornerstone distributions attributable to the period Unaudited $77.5 m $2.3 m Unaudited $72.3 m $1.6 m +$5.2 m +$0.7 m +7.2% +43.8% +8.2% Increase in underlying FFO 1 Property investments FFO $79.
Slide 9: Capital management
Capital management Near-term focus on deleveraging Key metrics 31 Dec 24 30 Jun 24 Debt facilities expiry profile initiatives to position balance sheet for $700 m Debt facilities next phase of growth Debt drawn $1,485m $1,320m $600 m $500 m Total debt facilities $1,679m $1,704m • Refinanced $165m of
Slide 10: Capital partnering and investment market
Capital partnering and investment market Precinct Properties – FY25 Interim Result 10
Slide 11: Existing partnerships
Existing partnerships Update on existing partnerships: Value of capital partnerships 1 Dec-2024 Completion PCT • PAG agreed to acquire Precinct’s remaining value value share 20% minority interest in 40 and 44 Bowen Street, Wellington for a total purchase price of $48 million. The transaction is expe
Slide 12: Residential build-to-sell platform
Residential build-to-sell platform Existing projects Build-to-sell pipeline Completion value Project Status Timing 1 Units • Pre-sale enquiries and conversion increasing but from a low base (incl. GST) Fabric Stage 2 Construction 2026 118 $125 m • All pre-acquisition projects now under construction
Slide 13: Purpose Built Student Accommodation
Purpose Built Student Accommodation • Two sites now secured with design and consenting in progress, providing potential supply of around 1,600 beds • Resource consent has been lodged on both sites and uplift is anticipated shortly • Both university lease and operator models are currently under consi
Slide 14: Auckland residential market
Auckland residential market REINZ House Price Index – Auckland Region (Y/Y%) Sales volumes and median days to sell – Auckland Region • Current market conditions remain subdued although some positive signs are emerging 35 40k 20 Y/Y growth (%) No. of sales Median days to sell 30 with prices levelling
Slide 15: Investment and capital markets
Investment and capital markets Domestic environment Office investment yields 10 • Transaction activity remained muted in 2024 due to the ongoing effects of higher Yield (%) Auckland Premium Auckland A Grade Wellington Prime interest rates and more restrictive credit conditions 9 Forecast 8 • Conditi
Slide 16: Portfolio update and occupier market
Portfolio update and occupier market Precinct Properties – FY25 Interim Result 16
Slide 17: Investment portfolio update
Investment portfolio update • 6,451sqm of lease deals concluded across the portfolio in the period • Another solid leasing spread was achieved during this period: • +22.8% spread achieved across 5,720sqm of office leasing 96% 6.3yrs Occupancy Weighted average (by NLA) lease term • Over 78,300sqm of
Slide 18: Auckland CBD office occupier market
Auckland CBD office occupier market • Premium assets are continuing to Net absorption, rolling 12m Net effective rental growth (Y/Y%) outperform the wider office market 60k Secondary Prime 20 Rent growth (Y/Y%) NLA (sqm) in terms of occupancy and rental 40k Premium A Grade Secondary growth 20k 10 --
Slide 19: Wellington CBD office occupier market
Wellington CBD office occupier market • Occupier demand remains subdued. Net absorption, rolling 12m Prime Secondary Gross effective rental growth (Y/Y%) Vacancy rates continued to rise over 100k 20 Rent growth (Y/Y%) 2024; however, prime vacancy Prime Secondary NLA (sqm) 15 remains relatively low a
Slide 20: Development update
Development update Precinct Properties – FY25 Interim Result 20
Slide 21: Wynyard Quarter Innovation Precinct complete
Wynyard Quarter Innovation Precinct complete With the delivery of Beca House, Precinct completes the third and final stage of the Wynyard Quarter Innovation Precinct, one of the largest urban regeneration projects undertaken in New Zealand • Five campus buildings encompassing 48,000 square metres of
Slide 22: 61 Molesworth nearing completion
61 Molesworth nearing completion Delivery of 6 Green Star development to deliver enhanced asset and income resilience • Construction on schedule with completion expected in Q4 2025 • Targeting 6 star ‘World Leadership’ Green Star Built rating and 5 star NABERSNZ rating • Highly attractive net lease
Slide 23: Residential projects
Residential projects Precinct is making continued progress in the sector with three build-to-sell projects now under construction • Construction works at York House commenced in the period • FABRIC Stage 2 and the Domain Collection progressing well, with both projects on schedule for completion in 2
Slide 24: Downtown
Downtown Progress update • Resource Consent has been lodged and notified under the conventional RMA process with the project included within Schedule 2 of the Fast Track Approvals Bill, providing an alternative consenting pathway. Resource Consent uplift is anticipated in the next ~12 months • Preli
Slide 25: Summary
Summary Precinct Properties – FY25 Interim Result 25
Slide 26: Summary and outlook
Summary and outlook • Precinct’s core office portfolio has continued to perform 10-year dividend history (cents per share) well, reflecting the underlying quality and resilience of our 6.75cps real estate 8.0 cps 6.70 6.70 6.75 7.0 cps 6.30 6.50 6.00 • Economic conditions remain weak, but business 6
Slide 27: Appendices
Appendices Precinct Properties – FY25 Interim Result 27
Slide 28: A1: FFO contribution from directly held property
A1: FFO contribution from directly held property For the 6 months ended 31 Dec 2024 31 Dec 2023 1 Δ % $ millions Unaudited Unaudited AON Centre - AKL $5.5 m $6.1 m ($0.6 m) (9.8%) HSBC Tower $17.4 m $12.6 m +$4.8 m +38.1% Jarden House $3.6 m $3.3 m +$0.3 m +9.1% PwC Tower $15.5 m $15.1 m +$0.4 m +2.
Slide 29: A2: AFFO reconciliation to operating profit
A2: AFFO reconciliation to operating profit For the 6 months ended 31 Dec 2024 31 Dec 2023 1 $ millions Unaudited Unaudited Operating profit before indirect expenses $76.6 m $73.4 m Corporate overhead expense ($2.4 m) ($2.7 m) Net interest expense ($29.1 m) ($16.4 m) Operating profit before income t
Slide 30: A3: Balance sheet
A3: Balance sheet Financial Position as at 31 Dec 2024 30 June 2024 Δ $ millions Unaudited Audited Assets Investment properties $2,991.8 m $2,987.4 m +$4.4 m Development properties $273.6 m $201.2 m +$72.4 m Investment properties held for sale - - - Investment in equity-accounted investments $186.1
Slide 31: A4: ESG progress
A4: ESG progress Our strategy includes the integration of Participation Overview Current1 Target sustainability across all areas of our business. • $1.7b of green assets (excl. partnership assets) The overarching measure Precinct have chosen to use as its core + Global Score 89 ESG performance bench
Slide 32: A5: Investment portfolio overview
A5: Investment portfolio overview Key metrics Investment Investment Portfolio metrics – directly held portfolio including portfolio directly Wellington Auckland 6.3 years cornerstone 1 held WALT 6.4 years 6.3 years 7.4 years 5.7 years Occupancy 95% 96% 96% 95% Weighted average lease term Investment
Slide 33: A6: Other city centre markets
A6: Other city centre markets Auckland retail net absorption vs. vacancy rates Retail 4k 12.0% • According to JLL research, city center prime retail vacancy has decreased to 7.3% as of 6-monthly net absorption (sqm) 3k December 2024 from a high of 8.6% in June 2022. This vacancy figure has remained
Slide 34: Disclaimer
Disclaimer The information and opinions in this presentation were prepared by Precinct Properties New Zealand Limited or one of its subsidiaries (Precinct). Precinct makes no representation or warranty as to the accuracy or completeness of the information in this presentation. Opinions including est
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