Property For Industry Limited · NZX:PFI
Property For Industry — FY2023 Earnings Presentation
40 slides from Property For Industry's earnings presentation, Feb 26, 2024
Slide 1: Welcome to the 2023 Annual Results Briefing
Slide 2: Agenda
1. 2. 3. 4. 5. 6. 7. 8. Annual Results Briefing 2023 HIGHLIGHTS PORTFOLIO 2023 ANNUAL RESULTS CAPITAL MANAGEMENT SUSTAINABILITY MARKET OUR PRIORITIES REVIEW QUESTIONS
Slide 3: 01. Highlights
Slide 4: Highlights
Highlights Annual Results Briefing 2023 UNDER-RENTING PROVIDES PLATFORM FOR RENTAL GROWTH: Auckland industrial vacancy remains near all-time lows, driving rental growth. $68.9m of contract rent reviewed during FY23 delivering an average annualised uplift of 4.2%, 14.8% of contract rent leased during
Slide 5: 02. Portfolio
Slide 6: Portfolio Snapshot
Portfolio Annual Snapshot Results Briefing 2023 ▪ PFI's portfolio is diversified across 92 properties INCLUDING and 126 tenants, with 100.0% occupancy and a BROWNFIELD DECEMBER 2023 DECEMBER 2022 weighted average lease term of 5.06 years, LEASES 1 weighted towards Auckland BOOK VALUE $2,027.7m $2,11
Slide 7: Leasing
Leasing Annual Results Briefing 2023 ▪ Total of $17.7 million of contract rent W eighted secured during 2023 A verage across 2023 L ease ▪ Rents agreed on $14.3 million of contract leasing transactions T erm rent secured during 2023 ▪ Rents were settled 26.4% above previous contract rents ▪ Remainin
Slide 8: FY24 Lease Expiries
FY24 Annual Lease Results Expiries Briefing 2023 ▪ Portfolio is 100.0% occupied (0.0% vacancy) and 1.3% of contract rent is due to expire in FY241 (chart below), largest single expiry 70.9% of that (0.9% of contract rent) (chart on right) − 15 Artillery Place and 10C Stonedon Drive have been sold, w
Slide 9: Rent Reviews
Rent Annual Reviews Results Briefing 2023 ▪ 111 rent reviews delivered an increase of 5.0% on ~$68.9 million of contract rent (~4.2% annualised, up from 4.0% in 2022) 45% − 76 fixed reviews delivered an increase of 3.6% on ~$52.3 million of contract rent (~2.4% annualised) 40% Expiries 1.3% Market 4
Slide 10: Valuations
a Valuations Annual a Results Briefing 2023 CURRENT PORTFOLIO VALUATION $2,027.77, | 5.01 7 PASSING YIELD 7 8140.86 (6:79 JK 20.51% FL $ Excludes brownfield development properties UNDER $2.709 ~1G,,renten NTA PER SHARE ‘0 accross the porfolio* v27.9c *Excluding brownfield development properties Excl
Slide 11: 03. 2023 Annual Results
Slide 12: Net Rental Income
Net Rental Annual Income Results Briefing 2023 $97m ▪ Net rental income (excluding service charges) of $94.9 million down $0.8 million or 0.7% on the prior year $96m 95.6 ($95.6 million), growth on stabilised portion of the portfolio of 3.1% $95m +0.4 94.9 +2.5 ▪ Decreases due to lost income from $9
Slide 13: Adjusted Funds From Operations
Adjusted Annual Funds From Results Operations Briefing (cps) 2023 ▪ AFFO earnings of 8.92 cps, 0.09 10.5 cents per share (cps) or 1.0% up on +0.43 the prior year ▪ Effective tax rate of 10.5% down 10.0 3.4% on the prior year following +0.98 commencement of brownfield developments 9.5 ▪ Net rental in
Slide 14: Earnings, Dividends, Guidance
Earnings, Annual Dividends, Results Guidance Briefing 2023 ▪ 2023 cash dividends total 8.30 cents per share EARNINGS 2023 CPS 2022 CPS CHANGE (cps), up 0.20 cps or 2.5% from 2022 FUNDS FROM OPERATIONS 10.03 10.21 -0.18 CPS or -1.8% ▪ FY24 dividend guidance of 4.15 cps, flat on 2023 dividends after p
Slide 15: Investment Properties
Investment Annual Properties Results Briefing 2023 ▪ Portfolio value of $2.028 billion1 $2,200m ▪ Decrease from annual independent 2,117.2 valuations of $140.8 million or 6.7% $2,100m +82.1 2,027.7 ▪ 8A & 8B Canada Crescent, Christchurch, disposal settled $2,000m March 2023 -140.8 -28.7 -2.0 ▪ Capex
Slide 16: Net Tangible Assets
Net Tangible Annual Assets Results (cps) Briefing 2023 ▪ Net tangible assets (NTA) per share 310 decreased by 27.9 cps or 9.3% ▪ Change in NTA per share driven by 300 298.8 the decrease in the fair value of investment properties (-27.7 cps), a decrease in the net 290 fair value asset for derivative
Slide 17: Capital Management
Capital Annéal Management Results Briefing ~ CAPITAL MANAGEMENT
Slide 18: Funding, Covenants, Interest Rates
Funding, Annual Covenants, Results Interest Rates Briefing 2023 DECEMBER 2023 DECEMBER 2022 ▪ BNZ facility increased to $175 million and extended by two years to 31 March 2025, subsequently reduced to FUNDING $100 million on establishment of the new Green loan BANK FACILITIES DRAWN $423.9m $403.7m t
Slide 19: Debt Facility Maturity Profile, Hedging
Debt Facility Annual Maturity Profile, Results Hedging Briefing 2023 $300m Pricoa 6-yr CBA 7-yr Term Loan $250m BNZ 4-yr Green Term Loan ▪ PFI’s debt instruments have an $200m Westpac 4-yr Green Loan average term to expiry of ~2.4 150.0 50.0 125.0 ANZ & CBA 3-yr Green Loan years (top graph), with si
Slide 20: Gearing
Gearing Annual Results Briefing 2023 ▪ December 2023 gearing of 32.0% lifting to ~33.7% in Q1 2025 after +1.3% 35.0% committed acquisitions, divestments and projects ▪ Spedding Road land acquisition +1.6% +0.0% ($40.6 million) conditional on titles being received and works being complete (expected m
Slide 21: 05. Sustainability
Slide 22: Sustainability: Green Star developments
Presentatio n title 1 22 1When compared to a reference building, being a typical building that would get built today without considering any implications on carbon emissions, with the design being driven mostly by cost and programme.
Slide 23: Sustainability: Existing Portfolio
Sustainability Annual = A - Existing Porfolio Results Briefing 78 STRENGTHENING PROPERTIES SOLAR PANELS n —e ” a now have power metering installed as part of a = and monitoring installed, sustainable refurbishment With the successful transition to an in-house facilities management cae) providing sey
Slide 24: Sustainable: People & Community
=STAFF WELLNESS i | Sustainable Annual A - People & Results Community Briefing 2023 SUPPORTING OUR PEOPLE An annual Wellness Week HEALTH & SAFETY UNDRAISING SPONSORSHIP event was launched providing staff with targeted information and PFI joined long term ‘Partners Haydn & Rollett challenges in all a
Slide 25: Market
Annual Results Briefing a3
Slide 26: Market Update
Market Update Annual Results Briefing 2023 $220 ▪ Following a period of rapid growth, with prime and $200 secondary industrial rents in Auckland increasing 45% and 37% over the past five years (top chart), $180 CBRE1 is forecasting an increase in incentives $160 through 2024, slowing growth in net e
Slide 27: Rental Growth
Rental Growth Annual Results Briefing 2023 ▪ PFI continues to extract value from its core property portfolio, with WAREHOUSE ▪ Improvements comprise an office and TOTAL RENT recent deals securing benchmark $ / SQM RATE warehouse constructed in the 1990’s, ~2,500 portfolio rents across key Auckland P
Slide 28: 07. Our Priorities
Slide 29: Our Portfolio (Target & Current)
Our Portfolio Annual (Target & Current) Results Briefing 2023 29
Slide 30: Assets Held For Sale / Sold
Assets Held Annual For Sale / Sold Results Briefing 2023 MOST RECENT GAIN / (LOSS) ON PROPERTY SALE PRICE BOOK VALUE SALE ▪ 8A & 8B Canada Crescent (Christchurch) settled March 2023 8A & 8B CANADA CRESCENT (SOLD) $21.0m $19.8m ▲$1.3M (+6.3%) ▪ 11 Sheffield Street (Blenheim) settled December 2023 ▪ 1
Slide 31: Brownfield Opportunities
Brownfield Annual Opportunities Results Briefing 2023 ▪ ~$267 million or 13% of the portfolio held in brownfield % OF opportunities, providing a growing pipeline of near-term PROPERTY DECEMBER LETTABLE SITE LEASE CONTRACT 2023 VALUE AREA(SQM) COVERAGE EXPIRY development opportunities RENT ▪ 30-32 Bo
Slide 32: Brownfield Opportunities: 30-32 Bowden Road
Brownfield Annual Opportunities Results Briefing 2023 ▪ ~40% of development pre-leased to Tokyo Food for a lease term of 12-years, balance of site being developed on a speculative basis, estimated completion mid-2024 ▪ ~106,400 sqm of registered warehouse interest across spec build during 2023, equa
Slide 33: Brownfield Opportunities: 78 Springs Road
Brownfield Annual Opportunities Results Briefing 2023 ▪ Stage 1 of the project will see the delivery of a 25,500 sqm 5 Green Star rated warehouse for long-term tenant Fisher & Paykel Appliances, with completion expected Q1 2025 ▪ Heads of Agreement signed with prospective tenant to develop ~6,500 sq
Slide 34: Proposed Industrial Estate
PROPOSED INDUSTRIAL ESTATE = NORTH WESTERN MOTORWAY
Slide 35: Brownfield Opportunities: Spedding Road
Brownfield Annual Opportunities Results Briefing 2023 ▪ Spedding Road land acquisition ($40.6 million) conditional on titles being received and works being complete (expected mid-2025) ▪ 5% deposit payable on subdivision consents being obtained (no later than 30 August 2024), 45% payable on titles b
Slide 36: Review & Questions
Review & Annual Questions Results Briefing << aioe REVIEW & QUESTIONS
Slide 37: Governance
Governance Annual Results Briefing 2023 ▪ Appointment of Jeremy Simpson as Independent Director, effective 27 February 2024. ▪ Change in People Committee Chair from Dean Bracewell to David Thomson, effective 3 April 2024. ▪ Anthony Beverley will be stepping down as Chair of PFI’s Board immediately f
Slide 38: Questions?
Review & Annual Questions Results Briefing 2023 HIGHLIGHTS: CLOSING: ▪ Annual result ▪ “Strong leasing outcomes have delivered cashflow and stability,” says PFI Chief ▪ Under-renting provides platform for rental Executive Officer, Simon Woodhams. “Despite growth significant increases in interest rat
Slide 39: Disclaimer
Disclaimer Annual Results Briefing 2023 The information included in this presentation is provided as at 26 February 2024 and should be read in conjunction with the interim financial statements, NZX results announcement, NZX Form –Results Announcement and NZX Form –Distribution Notice issued on that
Slide 40: Thank you for attending