Argosy Property Limited · NZX:ARG
Argosy Property — Non-Deal Roadshow (June 2019)
32 slides from Argosy Property's roadshow presentation, Jun 21, 2019
Slide 1: Retail Roadshow Presentation 2019
2019 Retail Roadshow Presentation Argosy Property Limited 4 – 21st June 2019 www.argosy.co.nz
Slide 2: Agenda
AGENDA Highlights Page 4 Strategy / Portfolio Page 6 Financials Page 13 Leasing Update Page 25 Looking Ahead Page 29 PRESENTED BY: Peter Mence CEO Dave Fraser CFO Note: This result should be read in conjunction with the NZX release dated 23 May 2019. Due to rounding, numbers presented in this presen
Slide 3: CEO quote on portfolio diversity
Our strength lies in the diversity of our portfolio by sector, location and tenant mix, providing flexibility to support our tenants changing needs, ensuring a resilient business model through various economic cycles.” Peter Mence CEO 3
Slide 4: Highlights
HIGHLIGHTS Change image 23 Customs Street, Snickel Lane 4
Slide 5: FY19 Full Year Highlights
FY19 Full Year Highlights 35.1% 5.0% Total shareholder Net Distributable return for 12 months Income increase $70.5m $100m Annual revaluation gain, Successful Green Bond 4.3% above book value Issue 4 Henderson Place, Compaq 6.1yr 6.275c 7WQ Weighted average Full year dividend Solid progress lease te
Slide 6: Strategy / Portfolio
Strategy / Portfolio 23 Customs Street, Level 2 – Predict HQ 6
Slide 7: Create. Manage. Own.
Create. Manage. Own. Proactive delivery of sustainable growth. Manage all elements of the business to deliver the right outcomes for all our stakeholders. Own the right assets, with the right attributes in the right locations. 7
Slide 8: Portfolio at a Glance
Portfolio at a Glance TOTAL PORTFOLIO VALUE TOTAL PORTFOLIO VALUE PORTFOLIO MIX BY SECTOR BY REGION BY VALUE 3% 8% 18% 10% 25% 44% 38% 72% 82% Industrial Auckland Core properties Office Wellington Value Add properties Retail Regional North Island non Core & South Island Divestment of non Core assets
Slide 9: Portfolio Metrics
Portfolio Metrics The strength of our diversified portfolio is in the breadth and depth of our tenant base and sectors they represent. Note: Data as at 31 March 2019 9
Slide 10: Value Add
Value Add The following properties have been designated as Value Add and make up ~10% of the total portfolio: Property Sector Location Valuation $m 90 - 104 Springs Road, East Tamaki Industrial Auckland 5.7 80 Springs Road, East Tamaki Industrial Auckland 13.2 211 Albany Highway, Albany Industrial A
Slide 11: Development Pipeline
Development Pipeline Expected value on completion Forecast Development Major Tenant Type Location $m completion FY 2020 FY 2021 Sep-19 Mar-20 Sep-20 Mar-21 Underway / commenced 180-202 Hutt Road Placemakers IND WTN 18.8 Dec-19 Stewart Dawsons Corner In final discussions RET WTN 30.2 Jul-20 Planned 1
Slide 12: Valuations
Valuations 31 March 19 31 Mar 19 Second half revaluation gain Market Yield Book Value Valuation Δ Δ of $35.8m or 2.2% above book $m $m $m % 31 Mar 19 31 Mar 18 value resulting in a full year Auckland 1,161.5 1,206.8 45.3 3.9% 6.43% 6.75% gain of $70.5m or 4.3% above Wellington 422.9 412.8 (10.1) -2.
Slide 13: Financials
FINANCIALS Change image Albany Mega Centre 13
Slide 14: Income Reconciliation
Income Reconciliation Like for like rent growth of 3.2% 14
Slide 15: Financial Performance
Financial Performance FY19 FY18 Like-for-like gross rental $m $m growth of 3.2% driving Net property income 102.5 101.0 increase in net income Administration expenses (10.9) (9.9) Profit before financial income/(expenses), other Expenses up due to one-off 91.5 91.1 restructuring and additional gains
Slide 16: Distributable Income
Distributable Income FY19 FY18 $m $m Profit before income tax 143.3 109.3 Adjusted for: Revaluations gains (70.5) (47.3) Realised losses/(gains) on disposal (6.1) (0.3) Derivative fair value loss/(gain) 7.4 4.1 Earthquake expense net of recoveries (6.8) (0.2) Gross distributable income 67.3 65.6 Dep
Slide 17: Investment Properties
Investment Properties Portfolio growth (+10%) driven by a combination of capital projects, acquisitions and revaluation gains. 17
Slide 18: Movement in NTA per share
Movement in NTA per share Full year revaluation gain key driver of ~9% NTA uplift to $1.22. 18
Slide 19: Funding & Interest Rate Management
Funding & Interest Rate Management FY19 FY18 Weighted average duration of debt facilities 2.7 years 3.1 years Weighted average interest rate1 4.75% 4.98% Interest Cover Ratio 3.2x 3.3x % of fixed rate borrowings 53% 62% Average fixed interest rate2 4.49% 4.56% Argosy maintains strong relationships w
Slide 20: Dividends
Dividends A fourth quarter cash dividend of 1.5875 cents per share has been declared, with imputation credits of 0.3026 cents per share attached, and will be paid on 26 June 2019. The Board has signalled FY20 dividend guidance of 6.275 cents per share. The FY20 dividend reflects the Board’s wish for
Slide 21: Portfolio Snapshot
Portfolio Snapshot Our focus is delivering improved portfolio quality and is reflected in our strong portfolio metrics Occupancy WALT (years) 100.0% 6.40 6.20 80.0% 6.00 5.80 60.0% 5.60 5.40 40.0% 5.20 20.0% 5.00 4.80 0.0% 4.60 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Net Tangible Assets De
Slide 22: Environmental Strategy
Environmental Strategy The impact of Argosy’s property investment business on the natural environment is an increasingly important consideration for investors, tenants and other stakeholders. Our environmental strategy reflects our long-term ambition to create vibrant sustainable workplaces for our
Slide 23: Green Projects Completed
Green Projects Completed 15-21 Stout Street, 82 Wyndham Street, Highgate Parkway, Auckland Wellington Auckland Completion: 2014 2018 2018 NLA / WALT1: 20,709m2 / 7.3yrs 6,012m2 / 6.7yrs 10,581m2 / 8.9yrs Green Star rating: 5 Star Built 5 Star Built Targeting 4 Star Built NABERSNZ rating: 5 Star Targ
Slide 24: Green Assets
Green Assets Assets with Green Star Ratings and their NABERSNZ Ratings shown below. Value of Existing Green Assets Asset Value Address Use Current NABERSNZ Rating Green Star Rating (NZDm)1 143 Lambton Quay Office 4 Stars Energy Whole Building 5 Star Office Built $29.3 15-21 Stout Street Office 5 Sta
Slide 25: Leasing Update
Leasing Update Change image Albany Mega Centre 25
Slide 26: Leasing Success
Leasing Success Strong leasing results for the year have continued, delivering a WALT of 6.1 years. 44 lease transactions were completed on 81,274m2 of net lettable area, including 21 new leases, 12 renewals and 11 extensions. Notable leasing successes include; Property Tenant NLA (m2) Lease Term 10
Slide 27: Lease Maturity
Lease Maturity Normalised lease maturity profile relatively stable over the medium term. Strong Crown interest in 7 Waterloo Quay space. 27
Slide 28: NZ Market Update
NZ Market Update Office Flexible working environments continue to drive a disconnect between employment growth and net absorption. This is expected to continue with recent transactions demonstrating a move to agile work environments. Rental growth impacted by new supply – softer in Auckland, reflect
Slide 29: Looking Ahead
Looking Ahead Change image 29
Slide 30: 2020 Focus
2020 Focus Create Continue transitioning Value Add properties to drive earnings and capital growth. Proactive delivery of sustainable growth. Ensure projects are completed on time and on budget. Keep investigating strategic acquisitions (off market or contiguous). Manage Maintain high tenant retenti
Slide 31: Thank you.
Thank you. 31
Slide 32: Disclaimer
Disclaimer This presentation has been prepared by Argosy Property 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 prior to making an