Argosy Property Limited · NZX:ARG
Argosy Property — ING Property Trust — HY2009 Earnings Presentation
22 slides from Argosy Property's earnings presentation, Nov 28, 2008
Slide 1: ING Property Trust 2008 Interim results briefing
ING Property Trust 2008 Interim results briefing
Slide 2: Agenda
Agenda 1. Introduction 2. Strategy 3. Financial matters 4. Valuations 5. Portfolio review 6. Portfolio statistics 7. Outlook 8. Questions
Slide 3: NZ listed property sector overview
NZ listed property sector overview Industry dynamics and trends P r i c e / NTA 100% • Capitalisation rates have increased to reflect a re-pricing of risk back into 90% 80% asset values 70% • There has been a lack of material transactions of institutional grade 60% 50% property in 2008, which reflec
Slide 4: Strategy
Strategy Long term Short term • A New Zealand focused Trust • Near term debt target reduced from 40% to 35% • Aim for diversification by sector, location and tenant • Asset sales programme mix • Projected FY09 distribution reduced from 8.7 cpu to • Low risk, focus on quality investments 8.0 cpu • Ta
Slide 5: Financial performance
Financial performance HY09 HY08 Change Net rental income $43.7m $41.5m 5.3% Earnings before interest and tax $39.4m $36.2m 8.9% Interest expense $18.0m $13.3m 35.5% Gain/(Loss) on disposal of properties $0.4m ($0.3m) Revaluations * $14.2m $0.0m Operating surplus (pre tax) $5.7m $23.9m -76.2% Operati
Slide 6: Distributable income
Distributable income HY09 HY08 Change Profit before tax $5.7m $23.9m Adjust for: Plus revaluation losses $14.2m $0.0m Plus/(minus) derivative fair value adjustment $1.8m ($0.1)m Plus management rights amortisation $0.7m $0.7m Current tax -$2.8m -$4.1m Net distributable income $19.6m $20.4m Net distr
Slide 7: Financial position
Financial position HY09 HY08 Change Net asset backing per unit (cents) 128.0c 132.2c -3.2% Net asset backing per unit (excluding 131.4c 138.6c -5.2% deferred tax on revaluation gains) Securities on issue 526.2m 535.4m -1.7% Unitholders’ funds $673.1m $708.5m -5.0% Debt to total assets ratio 42.0% 34
Slide 8: Interest rate management
Interest rate management • Current debt facility does not expire until Sept 2010 • 71.1% of the Trust’s debt is managed through the use of interest rate hedges • Due to the Trust’s interest rate management policy, the interest rate paid over the last 12 months (including margin and fees) is 7.46% •
Slide 9: Valuations
Valuations Key Determinants 30 September 2008 • Supply and demand of space • A review of the property portfolio was completed in- • Income – rentals conjunction with the interim reporting period. • Interest rates • The market capitalisation rate for the portfolio moved to • Value of returns and risk
Slide 10: Investment quality
Investment quality • Quality of the investments held has improved through acquisition, development and rationalisation plans • Almost no secondary quality assets remaining • Investments are now predominantly A-grade • Focus on adding to investment quality of portfolio
Slide 11: Commercial
Commercial
Slide 12: Retail
Retail
Slide 13: Industrial
Industrial
Slide 14: Old City Markets, 39 Market Place
Old City Markets, 39 Market Place NIWA / Contact GE Money 2 Leases 2 Leases Term Term at vacation Lease 1: 12 years (rental increases) Lease 1: 3 years 9 months Lease 2: 12 years (rental increases) Lease 2: 9 months
Slide 15: Albany – Mitre 10
Albany — Mitre 10 ly } ui AW iM i)
Slide 16: Portfolio management
Portfolio management • The tenant retention rate for the six months was 92% (excludes GE surrender). This reflects the consistent nature of the portfolio, as well as the level of service provided by the Trust’s property managers. • 79 rental reviews were completed over the period. The rental reviews
Slide 17: Occupancy
Occupancy Strong occupancy and weighted average lease term Occupancy by sector WALT by sector TOTAL 99.1% TOTAL 4.37 Retail 97.8% TOTAL Retail 4.31 TOTAL Retail Retail Industrial Industrial Industrial 99.8% Office Industrial 5.09 Office Office 98.4% Office 3.77 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 0.
Slide 18: Lease expiry profile
Lease expiry profile 18.00% 16.5% 16.00% 14.5% 14.00% 13.3% 12.3% 11.4% 12.00% 10.00% 9.4% 8.00% 7.7% 6.2% 6.00% 4.8% 4.0% 4.00% 2.00% 0.00% Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 As at 30 September 2008
Slide 19: Top 20 tenants
Top 20 tenants By gross rent (% of portfolio) Inland Revenue Department Progressive Enterprises Dept of Internal Af fairs Briscoes Group Ltd The Warehouse Ltd Bunnings Ltd Deutsche Post World Net ANZ Bank (NZ) Ltd KMART Easy Logistics Limited Te Puni Kokiri IBM New Zealand Limited Peter Baker Transp
Slide 20: Outlook
Outlook • Commercial & Retail sectors experiencing increased supply and static or decreasing demand • Vacancy levels at historic lows - but set to increase • Rental growth continues – but future growth will be constrained • Buyer demand for assets under $10m is present if well leased • Construction
Slide 21: Conclusion
Conclusion • ING Property Trust property portfolio is soundly positioned • Diversified, low risk portfolio of quality properties • Focus on debt reduction • Property Management – do basics well • Continuing to optimise the portfolio • Risks mitigated through vacancy and expiry profile
Slide 22: Disclaimer
Disclaimer This presentation has been prepared by ING Property Trust Management 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 prio