41 slides from Precinct Properties Nz Ltd & Precinct Properties Investments's earnings presentation, Aug 28, 2024
Slide 1: FY24 Annual Result
Precinct. FY24 Annual Result i iis | 28 August 2024 ‘Precinct.
Slide 2: Agenda
Agenda = Section 1: = Section 2: = Section 3: = Section 4: = Section 5: = Section 6: Appendices Highlights and key themes Financial performance Capital partnering Investment update Development update Summary Precinct Properties - FY24 Annual Result
Slide 3: Operational highlights
Operational highlights Operational excellence * 98% portfolio occupancy" + 66years WALT (FY23: 6.0 years) + 15.9% spread on office lease deals + One Queen Street completed, comprising Deloitte Centre premium offices and 5-star InterContinental Auckland hotel + Global Real Estate Sustainability Bench
Slide 4: Artist's impressions of development projects
Artist’s impression: York House Artist’s impression: 256 Queen Street PBSA Dominion & Valley (boundary lines approx.) Artist’s impression: Downtown redevelopment
Slide 5: Key themes
Precinct Properties - FY24 Annual Result Key themes Consumer confidence materially impacting discretionary spend, with Commercial Bay retail and Generator businesses impacted Valuations stabilising and long-term interest rates now tracking lower Occupier demand for premium office remaining resilient
Slide 6: Financial performance
Financial performance Precinct Properties - FY24 Annual Result
Slide 7: Financial performance
Financial performance For the 12 months ended 30 Jun 2024 30 Jun 2023 $ millions Audited Audited 4 Operating profit before indirect expenses $150.5 m $138.9 m +$11.6m Corporate overhead expense ($5.8 m) ($6.0 m) +$0.2m Net interest expense ($411 m) ($30.8 m) ($10.3 m) Operating profit before income
Slide 8: Operating income
Operating income For the 12 months ended 30 Jun 2024 30 Jun 2023, $ millions Audited Audited 4 % Directly held property funds from operations (FO) Auckland office $73.5m $68.7 m +$4.8m 47.0% Wellington office $35.2m $36.5m (13m) (3.6%) Commercial Bay retail $15.6m $16.3m (0.7m) (4.3%) Other properti
Slide 9: FFO and AFFO
FFO and AFFO For the 12 months ended 30 Jun 2024 30 Jun 2023 $ millions Audited Audited 4 3 Directly held property FFO $148.9 m $141.6m +87.3m +5.2% Cornerstone distributions attributable to the period $3.7m - +$3.7m = Cornerstone operating income before tax - $1.2m ($1.2 m) (100.0%) Property invest
Slide 10: Revaluations
Revaluations FY24 revaluation outcome + Full year revaluation loss of -$103.7m or -3.2% (FY23: -§255.4m or -7.1%) " * Loss driven by softening in cap rates + Partially mitigated by increase in market rentals and development profit recognition at One Queen Street and 61 Molesworth + Well-located prem
Slide 11: Capital management
Capital management Active capital management is Key metrics 30Jun 24 30 Jun 23 Debt facilities expiry profile enabling the execution of strategy Debt drawn $1316m $1,247 $700m a % $600 m mi + Refinanced existing bank debt with new Total debt facilities cleamg $586 = 500m |_| syndicated facilities to
Slide 12: Earnings outlook and FY25 guidance
Earnings outlook and FY25 guidance Dividend held at 6.75 cps for FY25 as strategy underpins a positive medium-term outlook * Confidence to look through near-term headwinds from tax changes especially as the peak in interest rates has now passed + Precinct is committed to providing a sustainable and
Slide 13: Capital partnering
Capital partnering Precinct Properties - FY24 Annual Result
Slide 14: Capital partnerships - strategic approach
Capital partnerships - strategic approach Direct ownership (strategic assets) Capital parti if i Sipesnroncictcesty | Investment management sence Development ! H H Key benefits of capital partnering Target equity returns Drives returns for capital partners through leveraging Precinct's market positi
Slide 15: Existing partnerships
Existing partnerships a A During FY24, Precinct: Total direct and indirect portfolios Precinct has continued ° ° . 5 : _ $ billions Jun-2024 Completion PCT to execute on its ° Moved toe onmcehs of the Living Sector value value share . . platform capital partnersh i p Capital partnerships? 5 + Acquir
Slide 16: Artist's impression: Commercial development
• • • • Artist’s impression: Commercial development
Slide 17: Partnership opportunities
Partnership opportunities * Precinct is in advanced discussions with preferred partners on $0.3 bn of new capital partnerships (256 Queen Street PBSA and Orams commercial development) * Downtown redevelopment is progressing at pace with the Development Agreement now unconditional and resource consen
Slide 18: Living sector platform
Living sector platform Residential Build to Sell Apartment Sector Living Sector pipeline . we Pars , 5 7 " Completion value + Good progress being made on building the pipeline, with Project Status Completion —_Units (incl GST) Dominion & Valley, Wynyard West, and Downtown Carpark sites collectively
Slide 19: Investment update
Investment update Precinct Properties - FY24 Annual Result
Slide 20: Investment Portfolio
Investment Portfolio 98% 6.6yrs 11% 4.5% Occupancy Weighted average Under-renting Val-on-val. office net (by NLA)" lease term (vs. market rents 2) market rent growth Y/Y 2 Lease expiry profile by NLA 30% % of NLA 20% - i O o | a a | = a Vacant 24 25 2 27 28 29 30 3 32 33 >33 @ Auckland @ Wellington
Slide 21: Leasing and operations update
Leasing and operations update FY24 highlights + 13,576sqm' of lease deals concluded in the year. Leasing activity level is reflective of the ongoing high levels of occupancy across the investment portfolio + Another solid leasing spread was achieved during this period, indicating the enduring appeal
Slide 22: Auckland CBD office
Auckland CBD office Vacancy rates continue to vary widely across grades and locations, with corporate occupiers remaining focused on well-located premium assets on the waterfront (Commercial Bay / Britomart) where prime vacancy was analysed at 3.4% as at Jun-24 compared to 7.5% for the wider market
Slide 23: Wellington CBD office
Wellington CBD office Occupier demand has noticeably Net absorption, rolling 12-months Forecast rent growth (gross effective) slowed following cuts to Government E 60k gz ' Forecast spending and job losses within the 3 ae z 10 civil sector a 2 (20k) aod . . . (40k) & + Notwithstanding, prime grade a
Slide 24: Auckland residential
Auckland residential * Current market conditions remain subdued with sales volumes low, days to sell elevated, and prices retracting from recent small lifts * However, fundamentals continue to lend confidence to the medium-term outlook due to: + Limited future supply as consenting numbers have plumm
Slide 25: Development update
Development update Precinct Properties - FY24 Annual Result
Slide 26: Development highlights
Development highlights Precinct has successfully evolved its development pipeline composition and ownership since 2021, through internalisation, introduction of capital partners and expansion of its investible universe = + — Successfully completed Deloitte Centre and Bowen House in the period LTE *
Slide 27: Committed projects - Commercial
Committed projects - Commercial * Construction advancing well at Wynyard Quarter Stage 3 and 61 Molesworth, with both developments on track to complete in Q1 2025 and Q3 2025 respectively * Hawkins and LT McGuinness engaged as main contractors at Wynyard and Molesworth respectively + Leasing activit
Slide 28: Committed projects - Living
Committed projects - Living * Construction of The Domain Collection is being undertaken by GN Construction who commenced on-site in November 2023. Completion is forecast for Q2 2026. * Construction of Fabric Stage 2 commenced in October 2023 with Kalmar Construction making good progress. Completion
Slide 29: Downtown
Downtown Significant progress made towards committing to the redevelopment of Downtown Carpark * Development Agreement now unconditional with deposit paid and remaining purchase price ($116 million) scheduled for December 2025 + Reference Design approved by Eke Panuku with Resource Consent applicati
Slide 30: Uncommitted pipeline
Uncommitted pipeline ~§3.1 billion of gross development value’ to be delivered with investment from capital partners Orams Commercial, Auckland Freyberg Building, Wellington 256 Queen Street, Auckland Dominion & Valley, ‘Auckland Wynyard West (Orams Residential), Auckland Downtown Carpark, ‘Auckland
Slide 31: Development pipeline
Development pipeline @ Planning @ Construction Sector % PCT % Forecast project timing Ownership Pre-Commit? FY24 _FY25 _FY26FY27__ FY2BFY29FY30__FY3I# Committed Wynyard Quarter Stage 3. Commercial 25% ~~ 61 Molesworth (WLG) Commercial 100% - iii Gross development value of uncommitted projects Fabric
Slide 32: Summary
Summary Precinct Properties - FY24 Annual Result 32
Slide 33: Summary
Summary + Economic conditions remain weak with household spending, residential construction and business investment all slowing as the impacts of monetary policy take effect + The second half of FY24 has seen a significant reduction in discretionary spend, consistent with broader domestic activity +
Slide 34: Appendices
Appendices Precinct Properties - FY24 Annual Result 34
Slide 35: A1: FFO contribution from directly held property
Al: FFO contribution from directly held property For the 12 months ended 30 Jun 2024 30 Jun 2023 A % $ millions Audited Audited AON Centre - AKL $12.6 m $12.5 m +$0.1m +0.8% HSBC Tower $24.3 m $22.2 m +$21m +9.5% PwC Tower $29.8 m $27.9 m +$1.9m +6.8% Jarden House $6.8 m $6.1m +$0.7m +11.5% Auckland
Slide 36: A2: AFFO reconciliation to operating profit
A2: AFFO reconciliation to operating profit For the 12 months ended 30 Jun 2024 30 Jun 2023 $ millions Audited Audited Operating profit before indirect expenses $150.5 m $138.9 m Corporate overhead expense ($5.8 m) ($6.0 m) Net interest expense ($41.1. m) ($30.8 m) Operating profit before income tax
Slide 37: A3: Balance sheet
A3: Balance sheet Financial Position as at 30 June 2024 30 June 2023 A $ millions Audited Audited Assets Investment properties $2,987.4m $2,604.7 m +$382.7 m Development properties $201.2 m $523.5 m ($322.3 m) Investment properties held for sale - $240.0 m ($240.0 m) Investment in equity-accounted i
Slide 38: A4: ESG progress
A4: ESG progress Our strategy includes the integration of Participation Overview Current! Target sustainability across all areas of our business. + $1.9b of green assets (excl. partnership assets) The overarching measure Precinct have chosen to use as its core Score 86 paciceal ESG performance bench
Slide 39: A5: Investment portfolio overview
Ad: Investment portfolio overview Key metrics Investment Investment Portfolio metrics — directly held portfolio including portfolio directly Auckland Wellington cornerstone ' held 6 6 WALT 6.6 yrs 6.6 yrs 5.8 yrs 8.0 yrs . ye a r S) Occupancy? 97% 98% 97% 98% Weighted average lease term Investment p
Slide 40: A6: Other city centre markets
A6: Other city centre markets Auckland retail net absorption vs. vacancy rates! 20,000 15,000 10,000 5,000 = -5,000 -10,000 6-monthly net absorption (sam) Jun-21 Dec-21 Jun-22 Dec-22 ME CED net absorption CBD vacancy (RHS) International visitor arrivals (seasonally adjusted)? 700.0k 600.0k 500.0k 40
Slide 41: 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