Property For Industry Limited · NZX:PFI
Property For Industry — FY2022 Earnings Presentation
42 slides from Property For Industry's earnings presentation, Feb 20, 2023
Slide 1: 2022 Annual Results Briefing
TO THE 2022 ANNUAL RESULTS BRIEFING
Slide 2: Contents
Contents Annual Results Briefing YAH Ol.< HIGHLIGHTS <a <PORT FOLIO ~ : et 2022: ANNUAL RESULTS 04. CAPITAL MANAGEMENT -05.. SUSTAINABILITY. <a0E— MARKET . ~'87)_0U RITIES "REVIEW & QUESTI
Slide 3: Highlights
Highlights Annual Results Briefing HIGHLIGHTS
Slide 4: Highlights
Highlights Annual Results Briefing 2022 BROWNFIELD OPPORTUNITIES SET TO COMMENCE: Existing tenant secured to activate first stage of Springs Road redevelopment, $140 million of development spend now committed across two sites, all buildings targeting a Five Green Star rating SUSTAINABILITY PROGRAMME
Slide 5: Portfolio
Annual |. Results | Briefing 22
Slide 6: Portfolio Snapshot
Portfolio Annual Snapshot Results Briefing 2022 ▪ PFI's portfolio is diversified across 94 properties and 132 tenants, with 100.0% occupancy and a DECEMBER 2022 DECEMBER 2021 weighted average lease term of 5.08 years, weighted towards Auckland BOOK VALUE $2,117.2m $2,168.9m NUMBER OF PROPERTIES 94 9
Slide 7: Valuations
Valuations Annual Results Briefing 2022 CURRENT VALUATION $ 2,117.2 M ~11% UNDER 4.62% PASSING YIELD 56.7M (-2.6%) RENTED Estimated by independant market rental assessment ~ 1.3% ESTIMATED $ 2.988 NTA PER SHARE PORTFOLIO VALUE GROWTH 4.6C 0.21% Due to realised rental growth 7
Slide 8: Leasing
Leasing Annual Results Briefing 2022 2022 - LEASED Weighted Average 104,433 POSITIVE Lease Term RE-LEASING 5.0 SPREAD SQM 12 YEARS on previous % contract rent 15% of portfolio by rent for new leases and renewals 81% AVERAGE INCENTIVE LEASE 0.1 MONTHS 75% of contract rent secured RENEWALS 7 new lease
Slide 9: 2023 Lease Expiries
2023 Lease Annual Expiries Results Briefing 2022 ▪ Portfolio is 100.0% occupied (0.0% vacancy) and 7.8% of contract rent is due to expire in 2023 (graph below), largest single expiry 20.0% of that (0.9% of contract rent, chart on right) − 8A & 8B Canada Crescent has been sold with settlement due to
Slide 10: Rent Reviews
Rent Annual Reviews Results Briefing 2022 90% 80% Expiries 7.8% Market 2.1% 70% CPI 14.6% 60% 50% 40% CBRE five year average rental growth estimates1 for Auckland: ▲ 30% Fixed 58.8% ▲ ▲ 20% 10% 0% 10 1CBRE “Auckland Property Market Outlook” December 2022 – includes 2022 rental growth, 28A & 8B Canad
Slide 11: Facilities Management
Facilities Annual Management Results Briefing 2022 To ensure PFI provides integrated, proactive and sustainable property solutions that add value for our tenants and shareholders. CHANGING HOW FACILITES Updating systems and processes to provide a seamless MANAGEMENT experience for tenants, contracto
Slide 12: 2022 Annual Results
2022 ANNUAL RESULTS
Slide 13: Net Rental Income
Net Rental Annual Income Results Briefing 2022 $104m ▪ Net rental income of $95.6 million up $1.4 million or 1.4% +0.7 on the prior year ($94.3 million), +0.9 $102m growth on stabilised portion of +2.8 the portfolio of 2.4% $100m ▪ Prior year acquisitions resulted in an increase of +$4.0 million +4.
Slide 14: Adjusted Funds From Operations
Adjusted Annual Funds From Results Operations Briefing (cents per share) 2022 9.4 ▪ AFFO earnings of 8.83 cents 9.29 per share, 0.46 cents per share 9.2 -0.03 (cps) or 5.0% less than the prior year 9.0 ▪ Interest expense and bank +0.03 +0.02 +0.02 8.83 8.8 +0.66 fees up $4.5 million of 0.91 cps on t
Slide 15: Earnings, Dividends, Guidance
Earnings, Annual Dividends, Results Guidance Briefing 2022 ▪ 2022 cash dividends total 8.10 cents per share EARNINGS 2022 CPS 2021 CPS CHANGE (cps), up 0.20 cps or 2.5% from 2021 ▪ 2023 dividend guidance of 8.10 to 8.30 cps, an FUNDS FROM OPERATIONS 10.21 11.07 -0.86 CPS or -7.8% increase of up to 0
Slide 16: Investment Properties
Investment Annual Properties Results Briefing 2022 $2,200m ▪ Portfolio value of $2.117 billion, including properties classified as held for sale (AHFS) $2,180m ▪ Decrease from annual 2,168.9 independent valuations of $56.7 $2,160m million or 2.6% ▪ Four properties disposed in $2,140m 2022 for a comb
Slide 17: Net Tangible Assets
Net Tangible Annual Assets Results (cents per share) Briefing 2022 310 ▪ Net tangible assets (NTA) per share decreased by 4.6 cents per share (cps) or 1.5% +2.1 ▪ Change in NTA per share driven 305 by the decrease in the fair value 303.4 of investment properties (-11.3 -1.7 cps), an increase in the
Slide 18: Capital Management
CAPITAL MANAGEMENT
Slide 19: Share Buyback Programme
Share Annual Buyback Results Programme Briefing 2022 ▪ On-market share buyback programme of up 160% 3.50 3.20 to 5% of ordinary shares, announced on 25 150% 150% May 2022 3.00 3.00 140% ▪ At the time of announcement, PFI shares 140% ($) ($) 2.50 were trading at a 21% discount to NTA 130% 2.80 130% (
Slide 20: Funding, Covenants, Interest Rates
Funding, Annual Covenants, Results Interest Rates Briefing 2022 ▪ $100 million BNZ facility extended in June DECEMBER 2022 DECEMBER 2021 2022 FUNDING ▪ USPP facility established with Pricoa, providing access to long-term funding BANK FACILITIES DRAWN $403.7m $401.2m BANK FACILITIES LIMIT $525.0m $52
Slide 21: Debt Facility Maturity Profile, Hedging
Debt Facility Annual Maturity Profile, Results Hedging Briefing 2022 $300m $250m ▪ Average term to expiry of bank $200m facilities and bonds (top graph) 150.0 $150m 100.0 of ~3.0 years, $121.3 million of unutilised bank facility capacity $100m 150.0 125.0 $50m 100.0 100.0 $m FY23 FY24 FY25 FY26 FY27
Slide 22: Sustainability
Annual Results Briefing 2022 4 o~ Sustainability | we <=» SUSTAINABILITY
Slide 23: Sustainability – 2022 Highlights
Sustainability – Annual 2022 Highlights Results Briefing 2022 23
Slide 24: Sustainability – Strategy Refresh
Sustainability – Annual Strategy Refresh Results Briefing 2022 24
Slide 25: Sustainability – Targets
Sustainability - Annual Targets Results Briefing 2022 25
Slide 26: Market
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Slide 27: Market Update
Market Update Annual Results Briefing 2022 ▪ Auckland industrial vacancy remains at all time lows 20% ▪ CBRE is forecasting rental growth to slow in 2023 15% and bottom out in 2024, before returning to more ‘normal’ levels in 2025 and 2026 (top graph) 10% ▪ PFI’s ~11% portfolio under-renting provide
Slide 28: Slide 28
Slide 29: Our Portfolio (Target & Current)
Our Portfolio Annual (Target & Current) Results Briefing 2022 29
Slide 30: Assets Held For Sale
Assets Held Annual For Sale Results Briefing 2022 8A & 8B CANADA DECEMBER 2022 PRO FORMA CRESCENT ▪ 39 Edmundson Street (Napier) settled 8 July 2022 INVESTMENT PROPERTIES & AHFS $2,117.2m -$21.0m▼ $2,096.2m ▪ 330 Devon Street East (New Plymouth) settled 25 August 2022 TOTAL DRAWN BORROWINGS $603.7m
Slide 31: MOVe Logistics Portfolio
MOVe Logistics Annual Portfolio Results Briefing 2022 $130m +27.0 123.2 ▪ MOVe Logistics portfolio of nine $120m properties purchased in November 2017 $110m ▪ Three properties were sold in $100m +4.6 2022, generating gross +21.9 proceeds of $12.4 million, an $90m average of 10% above their $80m most
Slide 32: Brownfield Opportunities
Brownfield Annual Opportunities Results Briefing 2022 ▪ ~$216 million or 10% of the portfolio held in % OF brownfield opportunities, providing a growing PROPERTY DECEMBER LETTABLE SITE LEASE CONTRACT 2022 VALUE AREA(SQM) COVERAGE EXPIRY pipeline of medium-term development RENT opportunities 30-32 BO
Slide 33: Bowden Road
ee 22 BOWDEN. ROAD : a seit i
Slide 34: Brownfield Opportunities – Stage 1
Brownfield Annual Opportunities Results Briefing 2022 ▪ ~40% of development pre-leased to Tokyo Food, for a lease term of 12-years ▪ Construction commencing in April 2023, PFI will develop a 7,000sqm warehouse with 900sqm of office and amenities, 2,500 square metres of canopies and breezeways, 2,000
Slide 35: Brownfield Opportunities – Stage 2
Brownfield Annual Opportunities Results Briefing 2022 ▪ Remainder of 3.9ha site to be developed on a speculative basis ▪ Construction commencing in April 2023, Stage 2 will include a 11,200sqm warehouse with 800sqm of office and amenities, 2,900sqm of breezeway canopy and 80 car parks ▪ Estimated co
Slide 36: Springs Road
E73 SPRINGS ROAD
Slide 37: Brownfield Opportunities – Stage 1
Brownfield Annual Opportunities Results Briefing 2022 ▪ PFI to develop a 25,500sqm warehouse for existing tenant Fisher & Paykel Appliances, with an option to expand the warehouse to 30,000sqm ▪ Stage 1 of the project has an estimated total incremental cost of around $76 million, with a targeted yie
Slide 38: Brownfield Opportunities – Master Plan
Brownfield Annual Opportunities Results Briefing 2022 ▪ Significant 10.4-hectare site in East Tamaki currently benefits from site coverage of less than 40% ▪ Multiple warehouse redevelopment and refurbishment options on a versatile heavy industrial zoned site that can accommodate around 67,500sqm of
Slide 39: Review & Questions
REVIEW & QUESTIONS
Slide 40: Environmental, Social and Governance
Environmental, Interim Social and Results Governance Briefing (ESG) 2022 ▪ Angela Bull will join the PFI Board as an Independent Director from 20 February 2023. ▪ Angela is currently the Chief Executive of Tramco Group, and a director of Vital Healthcare Property Trust, The Real Estate Institute of
Slide 41: Review & Questions
Review & Annual Questions Results Briefing 2022 HIGHLIGHTS: CLOSING: ▪ Steady underlying result ▪ 2022 has closed with the Company well placed for the coming years. With plenty of demand ▪ Brownfield opportunities set to commence evident, and a clear path for development, PFI is confident that it ca
Slide 42: Disclaimer
Disclaimer Annual Results Briefing 2022 The information included in this presentation is provided as at 20 February 2023 and should be read in conjunction with the annual report, NZX results announcement, NZX Form – Results Announcement and NZX Form – Distribution Notice issued on that same day. Pro