PFI Announces Record Annual Results

Property For Industry Limited (PFI)
Results for announcement to the market
Reporting period 12 months to 31 December 2016
Previous reporting period 12 months to 31 December 2015

Amount (000s) Percentage change
Revenue from ordinary
activities
$NZ 71,108 +6.2%
Profit from ordinary activities
after tax attributable to
shareholders
$NZ 123,412 +69.5%
Net profit attributable to
shareholders
$NZ 123,412 +69.5%

Interim/final dividend Amount per security Imputed amount per security
Final dividend $NZ 0.020500 $0.004988

Record date 27 February 2017
Dividend payment date 8 March 2017

Comments: 1. This dividend is fully credited with imputation credits to the
extent permitted by the imputation credit rules and to the
extent that the directors of PFI determine were available.
2. This announcement is extracted from PFI’s audited financial
statements as at and for the 12 months ended 31 December
2016. A copy of these audited financial statements is
attached to this announcement.

---

PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
FINANCIAL
STATEMENTS
Property
for Industry
Limited
Group
Financial
Statements
31 December
2016

2
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
ALL VALUES IN $000’SNOTE20162015
OPERATING REVENUE
Rental and management fee income2.2 71,086 66,912
Interest income 22 15
Total operating revenue 71,108 66,927
OPERATING EXPENSES
Non-recoverable property costs2.3 (1,646) (2,183)
Interest expense and bank fees (17,839) (19,398)
Audit fees and other fees paid to auditors5.1 (141) (143)
Management fees5.8 (7,259) (7,608)
Directors’ fees (336) (280)
Other expenses (753) (754)
Total operating expenses (27,974) (30,366)
Total operating earnings 43,134 36,561
NON-OPERATING INCOME AND EXPENSES
Fair value gain on investment properties2.1 88,214 46,471
Gain on disposal of investment properties 302 479
Material damage insurance income– 17
Fair value gain / (loss) on derivative financial instruments 433 (3,952)
Total non-operating income and expenses 88,949 43,015
Profit before taxation 132,083 79,576
INCOME TAX (EXPENSE) / BENEFIT
Current taxation5.2 (8,535) (7,151)
Deferred taxation5.2 (136) 400
Total income tax expense (8,671) (6,751)
Profit and total comprehensive income after income tax
attributable to the shareholders of the Company4.1 123,412 72,825
Basic and diluted earnings per share (cents)4.2 27.42 17.25
The accompanying notes form part of these financial statements.

3
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
Cents
per Share
No. of
Shares
Ordinary
Shares
($000s)
Retained
Earnings
($000s)
Total
Equity
($000s)
Balance as at 1 January 2015– 411,502,391 434,986 129,984 564,970
Total comprehensive income–– – 72,825 72,825
Issue of shares
Rights issue– 34,361,996 47,925 – 47,925
Dividends and reinvestment
Q4 2014 final dividend – 12/3/2015 1.95 – – (8,025) (8,025)
Q1 2015 interim dividend – 27/5/2015 1.75 – – (7,201) (7,201)
Q1 2015 dividend reinvestment – 841,562 1,282 – 1,282
Q2 2015 interim dividend – 3/9/2015 1.75 – – (7,216) (7,216)
Q3 2015 interim dividend – 25/11/2015 1.80 – – (8,041) (8,041)
Q3 2015 dividend reinvestment – 986,511 1,495 – 1,495
Balance as at 31 December 2015– 447,692,460 485,688 172,326 658,014
Total comprehensive income–– – 123,412 123,412
Dividends and reinvestment
Q4 2015 final dividend – 9/3/2016 2.00 – – (8,954) (8,954)
Q4 2015 dividend reinvestment – 1,471,253 2,309 – 2,309
Q1 2016 interim dividend – 23/5/2016 1.75 – – (7,860) (7,860)
Q1 2016 dividend reinvestment – 1,230,441 2,002 – 2,002
Q2 2016 interim dividend – 1/9/2016 1.75 – – (7,882) (7,882)
Q2 2016 dividend reinvestment – 963,921 1,583 – 1,583
Q3 2016 interim dividend – 23/11/2016 1.80 – – (8,124) (8,124)
Q3 2016 dividend reinvestment – 1,100,517 1,638 – 1,638
Balance as at 31 December 2016– 452,458,592 493,220 262,918 756,138
The accompanying notes form part of these financial statements.

4
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
ALL VALUES IN $000’SNOTE20162015
CURRENT ASSETS
Cash at bank– 542
Accounts receivable, prepayments and other assets5.3 9,029 10,934
Total current assets 9,029 11,476
NON-CURRENT ASSETS
Investment properties2.1 1,083,300 986,565
Derivative financial instruments3.2 384 117
Goodwill5.5 29,086 29,086
Total non-current assets 1,112,770 1,015,768
Total assets 1,121,799 1,027,244
CURRENT LIABILITIES
Bank overdraft 113 –
Derivative financial instruments3.2 242 299
Accounts payable, accruals and other liabilities5.4 8,669 14,740
Taxation payable 2,579 2,164
Total current liabilities 11,603 17,203
NON-CURRENT LIABILITIES
Borrowings3.1 332,924 330,920
Derivative financial instruments3.2 10,108 10,217
Deferred tax liabilities5.2 11,026 10,890
Total non-current liabilities 354,058 352,027
Total liabilities 365,661 369,230
Net assets4.3 756,138 658,014
EQUITY
Share capital 493,220 485,688
Retained earnings 262,918 172,326
Total equity 756,138 658,014
These group financial statements are signed on behalf of Property for Industry Limited and were authorised for issue on 13 February 2017.

Peter Masfen Anthony Beverley
Chairman Chairman, Audit and Risk Committee
The accompanying notes form part of these financial statements.

5
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
ALL VALUES IN $000’SNOTE20162015
CASH FLOWS FROM OPERATING ACTIVITIES
Property income received 71,194 67,278
Material damage insurance income – 17
Net GST received / (paid) 350 (313)
Interest received 22 15
Interest and other finance costs paid (18,105) (20,040)
Payments to suppliers (12,542) (8,646)
Income tax paid (8,120) (6,819)
Net cash flows from operating activities 32,799 31,492
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment properties2.1 9,927 200
Acquisition of investment properties – (46,989)
Expenditure on investment properties (19,903) (23,042)
Capitalisation of interest on development properties (190) (135)
Net cash flows from investing activities (10,166) (69,966)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds of borrowings 2,000 18,200
Issue of new shares – 47,925
Dividends paid to shareholders (25,288) (27,705)
Net cash flows from financing activities (23,288) 38,420
Net decrease in cash and cash equivalents (655) (54)
Cash and cash equivalents at beginning of year 542 596
Cash and cash equivalents at end of year (113) 542
Cash and cash equivalents at end of year comprises:
ALL VALUES IN $000'S20162015
Cash at bank– 542
Bank overdraft (113)–
Cash and cash equivalents at end of year (113) 542
The accompanying notes form part of these financial statements.

6
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
RECONCILIATION OF PROFIT AFTER INCOME TAX
TO NET CASH FLOWS FROM OPERATING ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2016
ALL VALUES IN $000’S 20162015
Profit for the year after income tax 123,412 72,825
Non cash items:
Fair value gain on investment properties (88,214) (46,471)
Gain on disposal of investment properties (302) (479)
Fair value (gain) / loss on derivative financial instruments (433) 3,952
Deferred taxation 136 (400)
Movements in working capital items:
Accounts receivable, prepayments and other assets 287 (623)
Accounts payable, accruals and other liabilities (2,502) 2,356
Taxation payable 415 332
Net cash flow from operating activities 32,799 31,492
The accompanying notes form part of these financial statements.

7
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
1. GENERAL INFORMATION8
1.1. Reporting entity8
1.2. Basis of preparation8
1.3. Group companies8
1.4. Basis of consolidation8
1.5. New standards, amendments and interpretations8
1.6. Critical judgements, estimates and assumptions9
1.7. Accounting policies9
1.8. Significant events and transactions9
2. PROPERTY10
2.1. Investment properties10
2.2. Rental and management fee income16
2.3. Non-recoverable property costs16
3. FUNDING17
3.1. Borrowings17
3.2. Derivative financial instruments18
4. INVESTOR RETURNS AND INVESTMENT METRICS19
4.1. Relationship of total comprehensive income to dividends paid19
4.2. Earnings per share20
4.3. Net tangible assets per share20
5. OTHER20
5.1. Audit fees and other fees paid to auditors20
5.2. Taxation21
5.3. Accounts receivable, prepayments and other assets23
5.4. Accounts payable, accruals and other liabilities23
5.5. Goodwill23
5.6. Financial instruments24
5.7. Financial risk management24
5.8. Related party transactions26
5.9. Operating segments26
5.10. Capital commitments26
5.11. Subsequent events26

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
8
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
1. GENERAL INFORMATION
IN THIS SECTION
This section sets out the basis upon which the Group’s Financial Statements are prepared. Specific accounting policies are described in the note to
which they relate.
1.1. Reporting entity
These financial statements are for Property for Industry Limited (the Company) and its subsidiary P.F.I. Property No. 1 Limited (PFI No. 1) (together,
the Group). The Company is a limited liability company incorporated in New Zealand and is registered under the New Zealand Companies Act 1993.
The Company is a FMC reporting entity under Part 7 of the Financial Markets Conduct Act 2013 and these audited consolidated financial statements
have been prepared in accordance with the requirements of the NZX Main Board Listing Rules. The Company is registered on the New Zealand Stock
Exchange (NZSX: PFI).
The Group’s principal activity is property investment and management in New Zealand.
1.2. Basis of preparation
The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP), the Financial
Reporting Act 2013 and the Financial Markets Conduct Act 2013. They comply with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and other applicable Financial Reporting Standards as appropriate to profit oriented entities. The financial statements also
comply with International Financial Reporting Standards (IFRS).
The financial statements have been prepared on the historical cost basis except where otherwise identified. All financial information is presented in
New Zealand dollars and has been rounded to the nearest thousand.
1.3. Group companies
As at 31 December 2016 and 31 December 2015, PFI No. 1 is the only controlled entity and is wholly owned.
1.4. Basis of consolidation
The consolidated financial statements comprise the Company and the entity it controls. All intercompany transactions are eliminated on consolidation.
1.5. New standards, amendments and interpretations
New standards, amendments and interpretations have been published that are not yet effective and have not been early adopted by the Group.
Those which may be relevant to the Group are explained below:
• NZ IFRS 9 ‘Financial Instruments’. This standard will eventually replace NZ IAS 39 Financial Instruments - Recognition and Measurement. It is
required to be adopted by the Group in the financial statements for the year ending 31 December 2018, the Group has not yet assessed the impact
of this standard.
• NZ IFRS 15 ‘Revenue from Contracts with Customers’. This standard addresses the recognition of revenue from contracts with customers.
It specifies the revenue recognition criteria governing the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. It is required to be adopted by the Group in the
financial statements for the year ending 31 December 2018, the Group has not yet assessed the impact of this standard.
• NZ IFRS 16 ‘Leases’. This standard will replace the current guidance in NZ IAS 17. Under NZ IFRS 16, a contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Under NZ IAS 17, a lessee
was required to make a distinction between a finance lease (on balance sheet) and an operating lease (off balance sheet). NZ IFRS 16 now
requires a lessee to recognise a lease liability reflecting future lease payments and a ‘right-of-use asset’ for virtually all lease contracts. Included
is an optional exemption for certain short-term leases and leases of low-value assets; however, this exemption can only be applied by lessees.
For lessors, the accounting for leases under NZ IFRS 16 is almost the same. However, as the guidance on the definition of a lease has been
updated (as well as the guidance on the combination and separation of contracts), lessors will also be affected by the new standard.
The standard is effective for accounting periods beginning on or after 1 January 2019. Early adoption is permitted but only in conjunction with
NZ IFRS 15, ‘Revenue from Contracts with Customers. The Group intends to adopt NZ IFRS 16 on its effective date and has yet to assess its
full impact.

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
9
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
1. GENERAL INFORMATION (CONTINUED)
1.6. Critical judgements, estimates and assumptions
In applying the Group’s accounting policies, the Board and Management continually evaluates judgements, estimates and assumptions that may have
an impact on the Group. The significant judgements, estimates and assumptions made in the preparation of these financial statements are as follows:
2.1. Investment properties Page 10
3.2. Derivative financial instruments Page 18
5.2. Taxation Page 21
5.5. Goodwill Page 23
1.7. Accounting policies
No changes to accounting policies have been made during the year and policies have been consistently applied to all years presented.
Significant accounting policies have been included throughout the notes to the financial statements.
Other relevant policies are provided as follows:
Share capital
All shares on issue are fully paid, carry equal voting rights, share equally in dividends and any surplus on wind up and have no par value. All shares
are recognised at the fair value of the consideration received by the Company. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction from the proceeds.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values. The Board and Management have overall
responsibility for overseeing all significant fair value measurements and transfers between levels of the fair value hierarchy. The Group’s policy is to
recognise transfers into and out of fair value levels as of the date of transfer or change in circumstances that caused the transfer.
The carrying values of all balance sheet financial assets and liabilities approximate their estimated fair values.
The Board and Management review significant unobservable inputs and valuation adjustments. If third party information is used to measure fair
values, then the Board and Management assesses the evidence obtained from the third parties to support the conclusion that such valuations meet
the requirements of NZ IFRS, including the level of the fair value hierarchy in which such valuations should be classified.
Goods and services tax
These financial statements have been prepared on a goods and services tax (GST) exclusive basis except for the accounts receivable balance,
accounts payable balance and other items where GST incurred is not recoverable. These balances are stated inclusive of GST.
1.8. Significant events and transactions
The financial position and performance of the Group was affected by the following events and transactions that occurred during the reporting period:
Investment property disposal
In December 2016 the Group entered into an unconditional contract to dispose of a non-core property at 27 Zelanian Drive, East Tamaki for a net sales
price of $8.3 million.

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
10
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
2. PROPERTY
IN THIS SECTION
This section shows the real estate assets used to generate the Group’s trading performance which are considered to be the most relevant to the
operations of the Group.
2.1. Investment properties
ALL VALUES IN $000’S20162015
Opening balance 986,565 876,005
Capital movements:
Additions– 48,203
Disposals (7,993) (8,973)
Capital expenditure 17,058 23,025
Capitalised interest
a
190 135
Movement in lease incentives, fees and fixed rental income (734) 1,699
8,521 64,089
Unrealised fair value gain 88,214 46,471
As at 31 December 1,083,300 986,565
a The effective interest rate applied to capitalised interest was 5.17% (2015: 5.88%).

PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
11
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
2. PROPERTY (CONTINUED)
2.1. Investment properties (continued)
ALL VALUES IN $000’S UNLESS NOTEDKey tenantOccupancy (%)
Yield on
valuation (%)Contract rent
Lettable
area
(sqm) Valuer
Carrying
value
Capital
movements
Fair value
adjustment
Carrying
value
2016201620152016201520162015201620162015201620162016
Avondale:
15 Copsey Place Canterbury 100%100%6.2%7.1% 732 719 6,878 CBRE 10,100 (15) 1,735 11,820
15 Jomac Place Southern Spars 100%100%6.6%7.3% 1,568 1,524 9,378 CBRE 21,000 22 2,578 23,600
61-69 Patiki Road Bidvest 100%100%7.4%8.0% 1,120 1,119 9,705 Savills 14,000 45 1,155 15,200
320 Rosebank Road Doyle Sails 100%100%6.3%7.4% 679 679 6,625 JLL 9,150 241 1,309 10,700
686 Rosebank Road New Zealand Comfort 97%97%6.8%7.0% 2,276 2,261 21,563 Savills 32,200 (48) 1,248 33,400
99%99%6.7%7.3% 6,375 6,302 54,149 86,450 245 8,025 94,720
East Tamaki:
17 Allens Road TSB Living 100%100%6.5%7.6% 1,000 1,000 9,926 Colliers 13,100 50 2,150 15,300
43 Cryers Road Astron Plastics 100%100%6.2%7.8% 703 703 6,068 Savills 9,000 2 2,248 11,250
6-8 Greenmount Drive Bridon 100%100%7.5%7.7% 644 591 6,590 CBRE 7,700 6 894 8,600
92-98 Harris Road GrainCorp 100%100%8.3%8.5% 1,265 1,222 10,687 Colliers 14,300 43 907 15,250
36 Neales Road Mainfreight 100%100%6.4%7.3% 1,160 1,082 12,546 JLL 14,800 45 3,155 18,000
1 Ron Driver Place Stewart Scott Cabinetry 100%100%5.3%5.9% 403 394 4,032 Colliers 6,700 (19) 869 7,550
78 Springs Road Fisher & Paykel Appliances 100%100%7.1%7.5% 5,580 5,418 41,387 JLL 72,000 722 5,778 78,500
10c Stonedon Drive Chemical Freight Services 100%100%7.1%7.4% 824 824 8,711 Colliers 11,100 16 534 11,650
12 Zelanian Drive Central Joinery 100%100%5.7%6.1% 564 559 6,098 CBRE 9,160 18 672 9,850
23 Zelanian Drive Exclusive Tyre Distributors 100%100%5.9%6.8% 385 380 3,811 Savills 5,550 (3) 953 6,500
27 Zelanian Drive n/a n/a100%n/a6.4%n/a 492 n/an/a 7,675 (7,675)––
100%100%6.9%7.4% 12,528 12,665 109,856 171,085 (6,795) 18,160 182,450
Manukau:
212 Cavendish Drive
a
Mainfreight 100%100%6.7%7.5% 1,288 1,284 18,596 Colliers 17,100 400 1,600 19,100
232 Cavendish Drive
a
Pacific Asset Leasing 100%100%6.8%7.4% 1,354 1,345 16,832 JLL 18,250 33 1,517 19,800
47 Dalgety Drive Peter Hay Kitchens 100%100%7.5%8.0% 979 979 8,860 Savills 12,250 248 552 13,050
59 Dalgety Drive Goodman Fielder 100%100%7.8%7.7% 1,300 1,256 8,649 Savills 16,350 (88) 438 16,700
1 Mayo Road Transdiesel 100%100%6.5%6.9% 515 498 6,361 Savills 7,200 3 747 7,950
9 Nesdale Avenue Brambles 100%100%6.2%6.7% 610 607 14,182 JLL 9,050 45 705 9,800
9 Narek Place
a
Z Energy 100%100%5.3%5.1% 518 377 5,663 Savills 6,500 1,667 1,683 9,850
100%100%6.8%7.3% 6,564 6,346 79,143 86,700 2,308 7,242 96,250
a Excludes development land shown separately below.

PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
12
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
ALL VALUES IN $000’S UNLESS NOTEDKey tenantOccupancy (%)
Yield on
valuation (%)Contract rent
Lettable
area
(sqm)Valuer
Carrying
value
Capital
movements
Fair value
adjustment
Carrying
value
2016201620152016201520162015201620162015201620162016
Mt Wellington:
30-32 Bowden Road Fletcher Building Products 100%100%6.8%7.0% 1,457 1,444 17,047 CBRE 20,700 (105) 795 21,390
50 Carbine Road Atlas Copco 100%100%5.2%5.8% 190 190 2,592 Colliers 3,280 25 375 3,680
54 Carbine Road & 6a Donnor Place EBOS 100%91%6.6%6.9% 1,710 1,548 16,872 Colliers 22,400 (169) 3,569 25,800
76 Carbine Road Atlas Gentech 100%100%5.9%6.5% 433 422 5,080 Colliers 6,450 100 850 7,400
7 Carmont Place CMI 100%100%5.8%6.3% 581 577 5,336 Colliers 9,200 85 815 10,100
6 Donnor Place Wickliffe 100%100%5.2%9.2% 780 1,328 14,555 Colliers 14,500 90 410 15,000
4-6 Mt Richmond Drive Brambles 100%100%5.8%6.4% 805 805 7,946 JLL 12,600 57 1,343 14,000
509 Mt Wellington Highway Fletcher Building Products 100%95%6.2%6.3% 979 873 8,745 Savills 13,760 160 1,830 15,750
511 Mt Wellington Highway Bremca Industries 100%100%6.0%6.2% 443 408 3,247 Colliers 6,600 (45) 845 7,400
515 Mt Wellington Highway Stryker 100%100%5.2%6.0% 259 253 1,708 Colliers 4,250 19 731 5,000
523 Mt Wellington Highway BGH Group 100%100%5.7%6.0% 220 219 1,677 Savills 3,620 22 208 3,850
1 Niall Burgess Road R L Button & Co 100%100%5.5%6.1% 218 216 1,742 CBRE 3,550 (14) 424 3,960
2-6 Niall Burgess Road McAlpine Hussmann 100%100%7.4%8.1% 914 864 6,874 CBRE 10,720 (10) 1,690 12,400
3-5 Niall Burgess Road Electrolux 100%100%6.0%6.6% 1,038 1,031 9,373 CBRE 15,675 (30) 1,630 17,275
7-9 Niall Burgess Road DHL Supply Chain 100%100%7.2%7.5% 2,069 2,052 23,565 Colliers 27,300 (158) 1,758 28,900
10 Niall Burgess Road Outside Broadcasting 100%100%6.4%6.5% 258 258 1,725 CBRE 3,940 (2) 112 4,050
2 Pacific Rise Hewlett-Packard 100%100%10.6%10.1% 916 890 2,757 CBRE 8,825 (3) (147) 8,675
5 Vestey Drive PPG Industries 100%100%5.7%5.9% 220 220 1,269 Savills 3,700 (7) 157 3,850
7 Vestey Drive True North 100%100%5.8%6.8% 481 481 4,598 Colliers 7,100 27 1,223 8,350
9 Vestey Drive Multispares 100%100%5.3%5.7% 193 193 1,600 Savills 3,400 (15) 265 3,650
11 Vestey Drive ASB Bank 100%100%8.1%7.8% 537 537 3,625 Savills 6,850 5 (205) 6,650
15a Vestey Drive PMP Maxum 100%100%6.8%7.4% 544 534 3,261 JLL 7,200 (51) 851 8,000
36 Vestey Drive Exlair 100%100%5.9%6.1% 150 142 1,120 Colliers 2,330 8 212 2,550
100%99%6.5%7.1% 15,395 15,485 146,314 217,950 (11) 19,741 237,680
2. PROPERTY (CONTINUED)
2.1. Investment properties (continued)

PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
13
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
ALL VALUES IN $000’S UNLESS NOTEDKey tenantOccupancy (%)
Yield on
valuation (%)Contract rent
Lettable
area
(sqm)Valuer
Carrying
value
Capital
movements
Fair value
adjustment
Carrying
value
2016201620152016201520162015201620162015201620162016
North Shore:
2-4 Argus Place Pharmapac 100%100%5.2%6.9% 409 433 3,560 Colliers 6,300 (52) 1,552 7,800
47 Arrenway Drive Device Technologies 100%100%5.9%6.8% 220 220 1,245 CBRE 3,250 5 470 3,725
51 Arrenway Drive Pacific Hygiene 100%100%5.1%5.9% 368 366 2,680 Colliers 6,200 (4) 1,004 7,200
229 Dairy Flat Highway Massey University 100%100%7.3%7.7% 1,794 1,774 6,719 JLL 22,900 (197) 1,997 24,700
15 Omega Street Wesfarmers 100%100%6.5%6.8% 551 551 3,498 Colliers 8,100 32 368 8,500
322 Rosedale Road Imake 100%100%6.5%7.0% 990 942 7,940 Savills 13,450 312 1,438 15,200
41 William Pickering Drive Innopak Global 100%100%5.7%6.6% 411 377 3,025 JLL 5,750 109 1,341 7,200
100%100%6.4%7.1% 4,743 4,663 28,667 65,950 205 8,170 74,325
Penrose:
4 Autumn Place Sistema Plastics 100%100%6.4%7.2% 148 148 1,364 JLL 2,050 (36) 286 2,300
6 Autumn Place Sistema Plastics 100%100%6.3%7.2% 166 166 1,645 JLL 2,300 (24) 374 2,650
10 Autumn Place Sistema Plastics 100%100%6.8%7.4% 613 613 7,042 JLL 8,300 (147) 847 9,000
122 Captain Springs Road New Zealand Crane Group 100%100%6.1%6.9% 496 496 7,431 Savills 7,220 (11) 891 8,100
8 Hugo Johnston Drive Argyle Schoolwear 100%100%6.3%6.9% 651 646 4,359 JLL 9,300 (55) 1,155 10,400
12 Hugo Johnston Drive W H Worrall 100%100%6.1%7.6% 329 329 2,639 JLL 4,350 284 766 5,400
16 Hugo Johnston Drive Modempak 100%100%6.6%7.3% 362 352 2,619 Colliers 4,850 (16) 616 5,450
65 Hugo Johnston Drive Sistema Plastics 100%100%7.4%7.8% 896 896 6,975 JLL 11,500 (222) 822 12,100
80 Hugo Johnston Drive Boxkraft 100%100%6.3%8.0% 457 456 3,872 JLL 5,675 (48) 1,673 7,300
102 Mays Road Go Logistics 100%100%6.3%7.4% 500 425 7,588 JLL 5,750 822 1,428 8,000
304 Neilson Street Fletcher Building Products 100%100%6.6%8.4% 703 743 13,438 Colliers 8,850 783 1,067 10,700
312 Neilson Street Transport Trailer Services 100%100%5.6%6.5% 308 299 3,862 CBRE 4,570 35 885 5,490
314 Neilson Street Wakefield Metals 100%100%6.0%6.4% 524 524 5,773 CBRE 8,220 3 517 8,740
12 Southpark Place Storepro Solutions 100%100%5.9%7.4% 490 447 5,477 CBRE 6,070 155 2,125 8,350
100%100%6.4%7.3% 6,643 6,540 74,084 89,005 1,523 13,452 103,980
Other Auckland:
58 Richard Pearse Drive, Mangere EBOS 100%100%6.5%6.6% 1,180 981 10,549 JLL 14,800 (77) 3,527 18,250
Carlaw Park Gateway Building, Parnell Quest 100%100%7.2%7.6% 2,523 2,564 2,369 JLL 33,800 118 1,082 35,000
Carlaw Park Office Complex, Parnell Jacobs 100%100%7.1%7.2% 4,367 4,357 11,149 JLL 60,800 59 941 61,800
170 Swanson Road, Swanson Transportation Auckland 100%100%5.8%6.3% 994 994
37,601 CBRE 15,800 49 1,261 17,110
100%100%6.9%7.1% 9,064 8,896 61,668 125,200 149 6,811 132,160
2. PROPERTY (CONTINUED)
2.1. Investment properties (continued)

PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
14
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
ALL VALUES IN $000’S UNLESS NOTEDKey tenantOccupancy (%)
Yield on
valuation (%)Contract rent
Lettable
area
(sqm)Valuer
Carrying
value
Capital
movements
Fair value
adjustment
Carrying
value
2016201620152016201520162015201620162015201620162016
North Island (outside Auckland):
124 Hewletts Road, Mt Maunganui RMD Bulk Storage 100%100%6.8%6.7% 2,730 2,716 29,270 JLL 27,240 11,723 5,137 44,100
124a Hewletts Road, Mt Maunganui Fonterra 100%100%7.4%7.7% 973 965 10,497 JLL 12,500 (48) 748 13,200
124b Hewletts Road, Mt Maunganui Ballance Agri-Nutrients 100%100%6.1%6.5% 857 853 8,867 JLL 13,100 – 1,000 14,100
3 Hocking Street, Mt Maunganui Trayco Manufacturing 100%100%7.2%7.1% 120 117 1,211 JLL 1,650 – 25 1,675
558 Te Rapa Road, Hamilton DEC Manufacturing 100%100%7.0%7.1% 461 453 4,606 Colliers 6,350 – 250 6,600
Shed 22, 23 Cable Street, Wellington Lion Liquor Property Division 100%100%6.9%6.9% 792 792 2,816 Colliers 11,450 9 41 11,500
143 Hutt Park Road, Wellington EBOS 100%100%7.1%7.2% 1,169 1,169 9,437 CBRE 16,240 82 28 16,350
8 McCormack Place, Wellington Information Management Group 100%100%9.1%8.9% 848 841 6,405 Colliers 9,450 (7) (133) 9,310
50 Parkside Road, Wellington
a
Waste Management 100%100%9.5%9.9% 335 335 7,104 Colliers 3,375 2 153 3,530
48 Seaview Road, Wellington
a
Goughs Gough & Hamer 100%100%9.2%9.4% 564 555 8,996 JLL 5,900 (15) 215 6,100
100%100%7.0%8.2% 8,849 8,796 89,209 107,255 11,746 7,464 126,465
Christchurch:
8a & 8b Canada Crescent Polarcold Stores 100%100%7.7%7.6% 1,129 1,119 9,500 JLL 14,750 – – 14,750
44 Mandeville Street Fletcher Building Products 77%100%7.0%8.6% 915 1,183 11,332 JLL 13,700 380 (980) 13,100
127 Waterloo Road DHL Supply Chain 100%100%7.7%7.6% 297 293 3,519 Colliers 3,870 371 (371) 3,870
90%100%7.4%8.0% 2,341 2,595 24,351 32,320 751 (1,351) 31,720
Investment properties subtotal100%100%6.7%7.3% 72,502 72,288 667,441 981,915 10,121 87,714 1,079,750
Development land:
212 Cavendish Drive, Manukau Colliers 1,400 – 500 1,900
232 Cavendish Drive, Manukau JLL 600 – – 600
9 Narek Place, Manukau Savills 1,600 (1,600) – –
50 Parkside Road, Wellington Colliers 550 – – 550
48 Seaview Road, Wellington JLL 500 – – 500
Development land - subtotal 4,650 (1,600) 500 3,550
Investment properties - total 986,565 8,521 88,214 1,083,300
a
Excludes development land shown separately.
2. PROPERTY (CONTINUED)
2.1. Investment properties (continued)

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
15
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
2. PROPERTY (CONTINUED)
2.1. Investment properties (continued)
Recognition and Measurement
Investment properties are held to earn rental income and for long term capital appreciation. After initial recognition at cost including directly
attributable acquisition costs, investment properties are measured at fair value, on the basis of valuations made by independent valuers on at least
an annual basis. Gains or losses arising from changes in the fair values of investment properties are included in the Consolidated Statement of
Comprehensive Income in the year in which they arise.
Subsequent expenditure is charged to the asset’s carrying amount only when it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably.
The fair value of investment property reflects the Directors’ assessment of the highest and best use of each property and amongst other things,
rental income from current leases and assumptions about rental income from future leases in light of the current market conditions. The fair value
also reflects the cash outflows that could be expected in respect of the property.
No depreciation or amortisation is provided for on investment properties. However, for tax purposes, depreciation is claimed on building fit-out and
a deferred tax liability is recognised where the building component of the registered valuation exceeds the tax book value of the building. The
deferred tax liability is capped at the amount of depreciation that has been claimed on each building.
Investment properties under construction are carried at cost until it is possible to reliably determine their fair value, from which point they are
carried at fair value less costs to complete.
Gains or losses on the disposal of investment properties are recognised in the Consolidated Statement of Comprehensive Income in the period in
which the risks and rewards of the investment property have been fully transferred to the purchaser.
Borrowing costs are capitalised if they are directly attributable to the acquisition or construction of a qualifying property. Capitalisation of
borrowing costs commences when the activities to prepare the asset are in progress and expenditures and borrowing costs are being incurred.
Capitalisation of borrowing costs will continue until the asset is substantially ready for its intended use. The rate at which borrowing costs are
capitalised is determined by reference to the weighted average borrowing costs of the Group and the average level of borrowings by the Group.
Key estimates and assumptions: Investment properties
The fair value of investment properties are determined from valuations prepared by independent valuers using Level 3 valuation techniques.
All investment properties were valued as at 31 December 2016 and 2015 by CB Richard Ellis (CBRE), Colliers International (Colliers), Jones Lang
LaSalle (JLL) or Savills. CBRE, Colliers, JLL and Savills are independent valuers and members of the New Zealand Institute of Valuers.
As part of the valuation process, the Manager, PFIM Limited (PFIM), verifies all major inputs to the independent valuation reports, assesses
movements in individual property values and holds discussions with the independent valuer.
The fair value was determined using Level 3 valuation techniques via a combination of the following approaches:
• Direct Capitalisation: The subject property rental is divided by a market derived capitalisation rate to assess the market value of the asset.
Further adjustments are then made to the market value to reflect under or over renting, additional revenue and required capital expenditure.
• Discounted Cash Flow: Discounted cash flow projections for the subject property are based on estimates of future cash flows, supported by the
terms of any existing lease and by external evidence such as market rents for similar properties in the same location and condition, and using
discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.
Significant inputs used together with the impact on fair value of a change in inputs:
RANGE OF SIGNIFICANT
UNOBSERVABLE INPUTS MEASUREMENT SENSITIVITY
20162015Increase in inputDecrease in input
Market capitalisation rate (%)
1
5.13 - 8.75 5.75 - 8.75 Decrease Increase
Market rental ($ per sqm)
2
28 - 368 28 - 368 Increase Decrease
Discount rate (%)
3
6.75 - 10.00 7.37 - 10.00 Decrease Increase
Rental growth rate (%)
4
1.61 - 2.80 1.95 - 2.78 Increase Decrease
Terminal capitalisation rate (%)
5
5.25 - 9.00 6.00 - 9.00 Decrease Increase
1. The capitalisation rate applied to the market rental to asses a property's value, determined through analysis of similar transactions taking into account location, weighted average
lease term, customer covenant, size and quality of the property.
2. The valuers assessment of the net market income which a property is expected to achieve under a new arm's length leasing transaction. Includes both leased and vacant areas.
3. The rate applied to future cash flows reflecting transactional evidence from similar properties.
4. The rate applied to the market rental over the future cash flow projection.
5. The rate used to assess the terminal value of the property.

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
16
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
2. PROPERTY (CONTINUED)
2.1. Investment properties (continued)
Generally, a change in the assumption made for the adopted market capitalisation rate is accompanied by a directionally similar change in the
adopted terminal capitalisation rate. The adopted market capitalisation rate forms part of the direct capitalisation approach and the adopted terminal
capitalisation rate forms part of the discounted cash flow approach. Both valuation methodologies are considered when determining an investment
property’s fair value.
When calculating the direct capitalisation approach, the market rental has a strong interrelationship with the adopted market capitalisation rate given
the methodology involves assessing the total market rental income receivable from the property and capitalising this in perpetuity to derive a capital
value. In theory, an increase in the market rent and an increase in the adopted market capitalisation rate could potentially offset the impact to the fair
value. The same can be said for a decrease in the market rent and a decrease in the adopted market capitalisation rate. A directionally opposite
change in the market rent and the adopted market capitalisation rate could potentially magnify the impact to the fair value.
When assessing a discounted cash flow, the adopted discount rate and adopted terminal capitalisation rate have a strong interrelationship in deriving
a fair value given the discount rate will determine the rate at which the terminal value is discounted to the present value. In theory, an increase in the
adopted discount rate and a decrease in the adopted terminal capitalisation rate could potentially offset the impact to the fair value. The same can be
said for a decrease in the discount rate and an increase in the adopted terminal capitalisation rate. A directionally similar change in the adopted
discount rate and the adopted terminal capitalisation rate could potentially magnify the impact to the fair value.
2.2. Rental and management fee income
ALL VALUES IN $000'S20162015
Gross rental receipts 70,817 67,144
Fixed rental income adjustments 102 (309)
Capitalised lease incentive adjustments (196) (277)
Management fee income 363 354
Total rental and management fee income 71,086 66,912
Recognition and Measurement
Rental income from investment properties is recognised in the Consolidated Statement of Comprehensive Income on a straight line basis over the
term of the lease. Lease incentives are capitalised to investment properties in the Statement of Financial Position and amortised on a straight line
basis in the Consolidated Statement of Comprehensive Income over the length of the lease to which they relate, as a reduction to rental income.
Management fee income is recognised in the Consolidated Statement of Comprehensive Income in the period in which the services are rendered.
Future minimum rentals receivable under non-cancellable operating leases are as follows:
ALL VALUES IN $000'S20162015
Within one year 69,017 70,162
After one year but not more than five years 193,373 194,260
More than five years 86,557 111,302
Total 348,947 375,724
2.3. Non-recoverable property costs
Other non-recoverable costs represents property maintenance and operating expenses not recoverable from tenants, property valuation fees and
property leasing costs.
ALL VALUES IN $000'S20162015
Service charge expenses (7,762) (7,374)
Service charge income recovered from tenants 7,762 7,374
Bad and doubtful debts recovery / (expense) 175 (258)
Other non-recoverable property costs (1,821) (1,925)
Total non-recoverable property costs (1,646) (2,183)

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
17
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
3. FUNDING
IN THIS SECTION
This section outlines how the Group manages its capital structure, financing costs and exposure to interest rate risk.
3.1. Borrowings
(i) Net borrowings
ALL VALUES IN $000'S20162015
Facility drawn down - non-current 333,700 331,700
Prepaid loan fees (776) (780)
Net borrowings 332,924 330,920
Recognition and Measurement
All borrowings are initially measured at fair value, plus directly attributable transaction costs, and subsequently measured at amortised cost using
the effective interest rate method. Under this method, directly attributable fees, costs, discounts and premiums are capitalised and spread over the
expected life of the facility. All other interest costs and bank fees are expensed in the period they are incurred.
(ii) Facility
On 3 February 2016, the Group entered into revised facilities (A and B) with a banking syndicate comprising ANZ Bank New Zealand Limited (ANZ),
Bank of New Zealand (BNZ), Commonwealth Bank of Australia (CBA) and Westpac New Zealand Limited (Westpac) for $375,000,000.
Facility A for $187,500,000 and Facility B for $187,500,000 are provided by ANZ, BNZ, CBA and Westpac. Facility A is a revolving facility of a long
term nature and expires 4 May 2020. Facility B is a revolving facility of a long term nature and expires 4 May 2021.
ALL VALUES IN $000'S20162015
ANZ 101,625 101,625
BNZ 91,125 91,125
CBA 91,125 91,125
Westpac 91,125 91,125
Total facilities available 375,000 375,000
Facility drawn down - non-current 333,700 331,700
Undrawn facility available 41,300 43,300
Total facilities available 375,000 375,000
Weighted average term to maturity (years) 3.84 3.84
After taking into account the impact of current interest rate swaps, the blended interest rate as at 31 December 2016 for the drawn down borrowings
was 5.24% (31 December 2015: 5.71%).
(iii) Security
The facility is secured by way of a security trust deed and registered mortgage security which is required to be provided over Group properties with
current valuations of at least $750,000,000. In addition to this, the facility agreement contains a negative pledge. The Company and PFI No. 1 are
guarantors to the facility. As at 31 December 2016, investment properties totalling $1,059,575,000 (31 December 2015: $968,115,000) were
mortgaged as security for the Group’s borrowings.

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
18
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
3.2. Derivative financial instruments
(i) Fair values
ALL VALUES IN $000'S20162015
Non-current assets 384 117
Current liabilities (242) (299)
Non-current liabilities (10,108) (10,217)
Total (9,966) (10,399)
(ii) Notional values, maturities and interest rates
20162015
Notional value of interest rate swaps - start dates commenced ($000'S) 243,000 253,000
Notional value of interest rate swaps - forward starting ($000'S) 70,000 55,000
Total ($000'S) 313,000 308,000
Average period to expiry - start dates commenced (years) 3.00 3.57
Average period to expiry - forward starting (years from commencement) 2.86 2.91
Average (years) 2.97 3.45
Average interest rate
1
- start dates commenced (%)4.53%4.66%
Average interest rate
1
- forward starting (% during effective period)3.54%3.92%
Average (%)4.31%4.52%
1 Excluding margin and fees.
Recognition and Measurement
The Group is exposed to changes in interest rates and uses derivative financial instruments, principally interest rate swaps, to mitigate this risk. The
Group does not apply hedge accounting. Derivative financial instruments are entered into to economically hedge the risk exposure.
Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured to fair value at each reporting date. Transaction costs are expensed on initial recognition and recognised in the
Consolidated Statement of Comprehensive Income. The fair value of derivative financial instruments is based on valuations prepared by independent
treasury advisers and is the estimated amount that the Group would receive or pay to terminate the derivative contract at reporting date, taking into
account current interest rates and creditworthiness of the derivative contract counterparties.
Key estimates and assumptions: Derivatives
The fair value of derivative financial instruments are determined from valuations prepared by independent treasury advisers using Level 2 valuation
techniques (2015: Level 2). These are based on the present value of estimated future cash flows accounting for the terms and maturity of each
contract and the current market interest rates at reporting date. Fair values also reflect the current creditworthiness of the derivative counterparty.
These values are verified against valuations prepared by the respective counterparties. The valuations were based on market rates at 31 December
2016 of between 2.00% (31 December 2015: 2.75%) for the 90 day BKBM and 3.49% (31 December 2015: 3.75%) for the 10 year swap rate. There
were no changes to these valuation techniques during the period.
3. FUNDING (CONTINUED)

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
19
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
4. INVESTOR RETURNS AND INVESTMENT METRICS
IN THIS SECTION
This section shows the relationship between the Group's accounting profit and dividends paid. It also summarises the earnings per share and net
tangible assets per share which are common investment metrics.
4.1. Relationship of total comprehensive income to dividends paid
The Group’s dividend policy is to distribute between 95% to 100% of its annual distributable profit, subject to the approval of the Board of Directors.
This can be increased to above 100% should management performance fees be earned in any given period.
Distributable profit is a non-GAAP measure determined as total comprehensive income for the period (as determined in accordance with NZ IFRS for
the period) adjusted for fair value gains or losses on investment properties, material damage insurance income, gains or losses on disposal of
investment properties (net of tax on depreciation claw-back), fair value gains or losses on derivative financial instruments, deferred tax, additional
revenue booked as a result of fixed rental review accounting entries and other one off items.
In the prior year, the definition of distributable profit included an additional adjustment for management performance fees net of tax. Applying the
previous definition the pay-out ratio for the year ended 31 December 2016 is 93% (2015: 100%). The table below shows the current policy calculation.
ALL VALUES IN $000'S UNLESS NOTED20162015
Total comprehensive income for the year attributable to the shareholders of the Company 123,412 72,825
Adjusted for:
Fair value gains on investment properties (88,214) (46,471)
Material damage insurance income– (17)
Gain on disposal of investment properties (302) (479)
Tax on depreciation claw-back on disposals of investment properties 132 –
Fair value (gain)/loss on derivative financial instruments (433) 3,952
Deferred taxation 136 (400)
Movement in fixed rent reviews (607) 200
Other
1
(12) (12)
Distributable profit 34,112 29,598
Weighted average number of ordinary shares (shares) 450,078,636 422,274,716
Distributable profit per share (cents) 7.58 7.01
Dividends paid relating to the year reported
2
33,141 31,412
Pay-out ratio (%)97%106%
1 Other comprises the current tax impact of an adjustment to one of the Company’s derivative financial instruments.
2 Includes dividends paid for the first three quarters of 2016 totalling $23,866,000 as per the Consolidated Statement of Changes in Equity, plus the fourth quarter dividend for 2016
due to be paid on 8 March 2017 of $9,275,000

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
20
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
4.2. Earnings per share
20162015
Total comprehensive income for the year attributable to the shareholders of the Company ($000) 123,412 72,825
Weighted average number of ordinary shares (shares) 450,078,636 422,274,716
Basic and diluted earnings per share (cents) 27.42 17.25
4.3. Net tangible assets per share
20162015
Net assets ($000) 756,138 658,014
Less: Goodwill ($000) (note 5.5) (29,086) (29,086)
Net tangible assets ($000) 727,052 628,928
Closing shares on issue (shares) 452,458,592 447,692,460
Net tangible assets per share (cents) 161 140
5. OTHER
IN THIS SECTION
This section includes additional information that is considered less significant in understanding of the financial performance and position of the
Group, but must be disclosed to comply with New Zealand Equivalents to International Financial Reporting Standards.
5.1. Audit fees and other fees paid to auditors
ALL VALUES IN $000'S20162015
Audit of annual financial statements (97) (94)
Review of interim financial statements (28) (28)
Review of management fee calculation (4) (4)
Audit of share registry (3) (3)
Benchmarking of director remuneration (9)–
Review of risk management framework– (14)
Total audit fees and other fees paid to auditors (141) (143)
4. INVESTOR RETURNS AND INVESTMENT METRICS (CONTINUED)

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
21
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
5.2. Taxation
(i) Reconciliation of accounting profit before income tax to income tax (expense) / benefit
ALL VALUES IN $000'S20162015
Profit before income tax 132,083 79,576
Prima facie income tax calculated at 28% (36,983) (22,281)
Adjusted for:
Non-tax deductible revenue and expenses (14) (6)
Fair value gain on investment properties 24,700 13,012
Gain on disposal of investment properties 85 134
Depreciation 2,505 2,520
Disposal of depreciable assets (122) 57
Deductible capital expenditure 910 591
Lease incentives, fees and fixed rental income (51) (95)
Derivative financial instruments 133 (1,095)
Impairment allowance 298 (73)
Current tax prior period adjustment 4 85
Current taxation expense (8,535) (7,151)
Depreciation 244 (863)
Lease incentives, fees and fixed rental income 51 95
Derivative financial instruments (133) 1,095
Impairment allowance (298) 73
Deferred taxation benefit (136) 400
Total taxation reported in Consolidated Statement of Comprehensive Income (8,671) (6,751)
(ii) Deferred tax
20142015201520162016
ALL VALUES IN $000'SAs at
Recognised
in profitAs at
Recognised
in profit As at
Deferred tax assets
Derivative financial instruments (1,847) (1,095) (2,942) 133 (2,809)
Impairment allowance (289) (73) (362) 298 (64)
Gross deferred tax assets (2,136) (1,168) (3,304) 431 (2,873)
Deferred tax liabilities
Investment properties 13,426 768 14,194 (295) 13,899
Gross deferred tax liabilities 13,426 768 14,194 (295) 13,899
Net deferred tax liability 11,290 (400) 10,890 136 11,026
5. OTHER (CONTINUED)

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
22
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
(iii) Imputation credit account
The amounts below represent the balance of the imputation credit account as at the end of the reporting period, adjusted for imputation credits that
will arise from the payment of taxation payable represented in the Consolidated Statement of Financial Position.
ALL VALUES IN $000'S20162015
Opening balance 1,507 1,214
Taxation paid / payable 8,435 7,082
Imputation credits attached to dividends paid (7,685) (6,789)
Closing balance available to shareholders for use in subsequent periods 2,257 1,507
Recognition and Measurement
The Company and Group are a listed Portfolio Investment Entity (PIE) for the purposes of the Income Tax Act 2007. Tax is accounted for on a
consolidated Group basis and the Group is required to pay tax to the Inland Revenue as required by the Income Tax Act 2007. Income tax expense
comprises current and deferred tax and is recognised in the Consolidated Statement of Comprehensive Income for the year.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and
any adjustment to tax payable in respect of previous years. Deferred tax is provided for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is recognised on all temporary differences, including:
• The tax liability arising from accumulated depreciation claimed on investment properties, where applicable;
• The tax asset arising from the allowance for impairment;
• The tax liability arising from certain prepayments and other assets; and
• The tax asset / liability arising from the unrealised gains / losses on the revaluation of interest rate swaps.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have
been enacted or substantively enacted by the reporting date. Deferred tax is not recognised for:
• Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss;
• Temporary differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future;
and
• Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income
taxes levied by the same tax authority on the same taxable entity, or on different entities, but they intend to settle current tax assets and liabilities on
a net basis.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can
be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
Additional income tax arising from distribution of dividends is recognised at the same time as the liability to pay the dividend is recognised.
Key estimates and assumptions: Deferred tax
Deferred tax is provided on the accumulated depreciation claimed on the building component of investment properties. Investment properties are
valued each year by independent valuers (as outlined in note 2.1). These values include an allocation of the valuation between the land and building
components. The calculation of deferred tax on depreciation recovered places reliance on the land and building split provided by the valuers.
5. OTHER (CONTINUED)
5.2. Taxation (continued)

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
23
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
5.3. Accounts receivable, prepayments and other assets
ALL VALUES IN $000'S20162015
Accounts receivable 1,082 1,605
Property sale proceeds to be settled 7,628 9,658
Provision for doubtful debts– (462)
Prepayments and other assets 319 133
Total accounts receivable, prepayments and other assets 9,029 10,934
Recognition and Measurement
Accounts receivable are recognised at fair value and subsequently measured at amortised cost using the effective interest rate method. Receivables
are assessed on an ongoing basis for impairment. A provision for doubtful debts is established where there is evidence that the Group will not be able
to collect all amounts due according to the original terms of the receivable. Those which are anticipated to be uncollectable are written off.
5.4. Accounts payable, accruals and other liabilities
ALL VALUES IN $000'S20162015
Accounts payable 715 2,218
Accrued interest expense and bank fees 2,417 2,687
Accruals and other liabilities in respect of investment properties 2,335 5,904
Other accounts payable, accruals and other liabilities 3,202 3,931
Total accounts payable, accruals and other liabilities 8,669 14,740
Recognition and Measurement
Expenses are recognised on an accruals basis and, if not paid at the end of the reporting period, are reflected as a payable in the Consolidated
Statement of Financial Position.
5.5. Goodwill
ALL VALUES IN $000'S20162015
Goodwill 29,086 29,086
Recognition and Measurement
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the fair value of the identifiable net
assets acquired.
Goodwill is measured at cost less accumulated impairment losses. It is tested annually for impairment or more frequently if events or changes in
circumstances indicate potential impairment. An impairment loss is recognised if the carrying amount exceeds the estimated recoverable amount.
Impairment losses are recognised in the Consolidated Statement of Comprehensive Income.
Goodwill is allocated to the Group’s cash generating units (CGU) identified according to the lowest level at which the goodwill is monitored.
To assess whether goodwill is impaired, the carrying amount of the CGU is compared to the recoverable amount, determined based on the greater of
its value in use and its fair value less costs of disposal.
Key estimates and assumptions: Goodwill
All goodwill relates to the Property for Industry Limited CGU.
The fair value of goodwill is determined using Level 3 valuation techniques (2015: Level 3). Fair value less costs of disposal is measured by calculating
the fair value of the Property for Industry Limited CGU using a 1 day volume-weighted average share price at the reporting date, applying a control
premium and deducting costs of disposal.
As at 31 December 2016 the estimated fair value less costs of disposal of the Property for Industry Limited CGU exceeded the carrying value
(2015: nil impairment).
5. OTHER (CONTINUED)

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
24
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
5.6. Financial instruments
The following financial assets and liabilities, that potentially subject the Group to financial risk, have been recognised in the financial statements:
ALL VALUES IN $000'S20162015
Financial Assets
Loans and receivables:
Cash at bank– 542
Accounts receivable and other assets8,71010,801
Total - Loans and receivables8,71011,343
Fair value through profit or loss - held for trading:
Derivative financial instruments 384 117
Total - Fair value through profit or loss 384 117
Total Financial Assets9,09411,460
Financial Liabilities
Liabilities at amortised cost:
Bank overdraft 113 –
Accounts payable, accruals and other liabilities 8,669 14,740
Borrowings 332,924 330,920
Total - Liabilities at amortised cost 341,706 345,660
Fair value through profit or loss - held for trading:
Derivative financial instruments 10,350 10,516
Total - Fair value through profit or loss 10,350 10,516
Total Financial Liabilities 352,056 356,176
5.7. Financial risk management
The Group’s activities expose it to a variety of financial risks: interest rate risk, credit risk, and liquidity risk. The Group’s overall risk management
strategy focuses on minimising the potential negative economic impact of unpredictable events on the Group’s financial well being.
(a) Interest rate risk
The Group’s exposure to the risk of changes in interest rates relates primarily to the Group's borrowings with a floating interest rate. The Group has
an interest rate hedging policy which has been reviewed by an external firm with expertise in this area. The policy calls for a band of the Group’s
borrowings to be at fixed interest rates, with a greater proportion of the near term to be fixed and a lesser percentage of the far dated to be fixed.
The Group uses derivative financial instruments, principally interest rate swaps, to exchange its floating short term interest rate exposure for fixed
long term interest rate exposure in accordance with its policy bands. As the Group holds derivative financial instruments, there is a risk that their fair
value will fluctuate because of underlying changes in market interest rates. This is accepted as a by-product of the Group’s interest rate hedging
policy. The fair value of derivative financial instruments is disclosed in the Consolidated Statement of Financial Position (refer note 3.2).
The following sensitivity analysis shows the effect on profit before tax and equity if interest rates at balance date had been 50 basis points (0.50%)
higher or lower with all other variables held constant.
20162015
ALL VALUES IN $000'S
Gain/(loss)
on increase
of 0.50%
Gain/(loss)
on decrease
of 0.50%
Gain/(loss)
on increase
of 0.50%
Gain/(loss)
on decrease
of 0.50%
Impact on profit before tax 2,030 (2,030) 1,873 (1,873)
Impact on equity 1,462 (1,462) 1,349 (1,349)
5. OTHER (CONTINUED)

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
25
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
(b) Credit risk
Credit risk represents the risk that the counterparty to a financial instrument will fail to discharge its obligations and the Group will suffer financial
loss as a result. Financial instruments which potentially subject the Group to credit risk consist of cash and cash equivalents, accounts receivable and
other assets, and interest rate swap agreements.
With respect to the credit risk arising from cash and cash equivalents, there is limited credit risk as cash is deposited with ANZ Bank New Zealand
Limited, a registered bank in New Zealand with a credit rating of AA– (Standard & Poor's).
With respect to the credit risk arising from accounts receivable, the Group only enters into lease arrangements over its investment properties with
parties whom the Group assesses to be creditworthy. It is the Group’s policy to subject all potential tenants to credit verification procedures and
monitor accounts receivable balances. Credit risk does not arise on property sale proceeds to be settled as title will not transfer until settlement.
With respect to the credit risk arising from interest rate swap agreements, there is limited credit risk as all counterparties are registered banks in
New Zealand. The credit ratings of these banks are all AA– (Standard & Poor's).
The carrying amount of financial assets as per note 5.6 approximates the Groups maximum exposure to credit risk . For certain receivables the Group
holds bank guarantees, parent company guarantees or personal guarantees.
(c) Liquidity risk
Liquidity risk is the risk that the Group will have difficulty realising assets and raising sufficient funds to satisfy commitments associated with
financial liabilities.
The Group manages its liquidity risk by ensuring that it has committed funding facilities at a minimum of 105% of the projected peak debt level over
the next twelve months (excluding business acquisitions).
The maturities of the Group’s borrowings based on the remaining period is 3.8 years (2015: 3.8 years), with all borrowings due later than one year
(2015: later than one year). Further details of the Group’s borrowings, including the maturities of the Group’s borrowings, are disclosed in note 3.1 to
the financial statements.
The table below analyses the Group financial liabilities (principal and interest) by the relevant contracted maturity groupings based on the remaining
period as at 31 December 2016 and 31 December 2015.
Carrying amount Contractual cash flows
ALL VALUES IN $000'S 0 - 1 year 1 - 2 years 2 - 5 years > 5 years Total
Financial liabilities
Bank overdraft 113 113 ––– 113
Accounts payable, accruals and other
liabilities 8,669 8,669 ––– 8,669
Derivative financial instruments
1
9,966 5,232 3,671 2,865 (289) 11,479
Borrowings 332,924 11,460 11,460 354,276 – 377,196
Total as at 31 December 2016 351,672 25,474 15,131 357,141 (289) 397,457
Accounts payable, accruals and other
liabilities 14,740 14,740 ––– 14,740
Derivative financial instruments
1
10,399 4,560 3,526 4,227 (345) 11,968
Borrowings 330,920 14,374 14,374 357,497 – 386,245
Total as at 31 December 2015 356,059 33,674 17,900 361,724 (345) 412,953
1 The carrying amount of derivative financial instruments shown is the net position of both derivative financial instrument assets and derivative financial instrument liabilities.
(d) Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern whilst maximising the return to
shareholders through maintaining an optimal balance of debt and equity. In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group's capital structure includes borrowings and shareholders equity. The Group monitors capital on the basis of the loan to value ratio and
borrowing covenant compliance. The loan to value ratio is calculated as borrowings divided by investment properties. The Group’s strategy is to
maintain a loan to value ratio of no more than 40%. The covenants on all borrowings require a loan to value ratio of no more than 50%.
The Group operates a Dividend Reinvestment Scheme (DRS) which allows eligible shareholders to reinvest dividends in shares. The board, at its sole
discretion, may suspend the DRS at any time and/or apply a discount to which shares are issued under the DRS.
5. OTHER (CONTINUED)
5.7. Financial risk management (continued)

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2016
26
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
5. OTHER (CONTINUED)
5.8. Related party transactions
(i) Management fees
The Manager, PFIM Limited (PFIM) is entitled to be paid base management and performance fees for the provision of management and administrative
services, pursuant to a management and administrative services contract. During the year, Gregory Reidy was a Director of both PFIM and the
Company. During the year, the Group incurred management fees of $7,259,000 (2015: $7,608,000) comprising:
(a) Base management fees
The base management fee payable monthly and is calculated as one twelfth of:
• 0.725% of total tangible assets under management up to $425 million;
• 0.450% of total tangible assets under management above $425 million and below $775 million; and
• 0.350% of total tangible assets under management above $775 million.
During the year, the Group incurred base management fees totalling $5,482,000 (2015: $5,194,000) from PFIM, for the provision of management
and administrative services. As at 31 December 2016 $458,000 (2015: $446,000) was owing and included in accounts payable, accruals and
other liabilities.
(b) Performance fees
The performance fee is calculated and payable on a quarterly basis. The performance fee is calculated as 10% of the change in shareholder returns
above 10% per annum (2.5% per quarter) and under 15% per annum (3.75% per quarter). Where shareholder returns exceed 3.75% in a quarter, no
payment is due for the actual amount of the increase above 3.75% but the amount of the increase above 3.75% is carried forward and added to the
calculation of shareholder returns in the next seven quarters. However, if shareholder returns are less than 2.5% in a quarter, the deficit is carried
forward and subtracted from the calculation of shareholder returns in the next seven quarters.
During the year, the Group incurred $1,777,000 performance fees from PFIM (2015: $2,414,000). As at 31 December 2016, a deficit amount of
$4,122,000 (2015: surplus $1,988,000) has been carried forward to be included in the calculation to determine whether an performance fee is payable
in the next seven quarters. As at 31 December 2016 nil (2015: $830,000) was owing and included in accounts payable, accruals and other liabilities.
(ii) Other related party transactions
During the year, the Group incurred $12,816,440 (2015: $19,843,000) for construction and maintenance works from Haydn & Rollett Limited.
John Waller was a Director of both Haydn & Rollett Limited and the Company until he passed away on 21 September 2016. As at 31 December 2016
$311,000 (31 December 2015: $1,558,000) was owing and included in accounts payable, accruals and other liabilities.
John Waller was a Director of both Bank of New Zealand and the Company until his retirement from the Bank of New Zealand on 31 July 2015.
During the prior year, the Group incurred $4,317,000 for interest expense and bank fees from the Bank of New Zealand. As at 31 December 2015:
$630,000 was owing and included in accounts payable, accruals and other liabilities.
No related party debts have been written off or forgiven during the year (2015: nil).
During the year, fees paid to Directors of the Group were $336,000 (2015: $280,000).
As at 31 December 2016, Directors of the Company held 8,007,684 (31 December 2015: 9,153,462) shares beneficially in the Company and 371,583
(31 December 2015: 371,583) shares non-beneficially in the Company. Included in the shares beneficially owned are 3,657,121 (31 December 2015:
3,657,121) shares held in the name of PFIM.
5.9. Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief
operating decision-maker has been identified as the Board of Directors. The Group is internally reported as a single operating segment to the chief
operating decision-maker.
5.10. Capital commitments
As at 31 December 2016 the Group had capital commitments totalling $3,638,000 (31 December 2015: $12,416,000) relating to work on
investment properties.
5.11. Subsequent events
On 9 January 2017, 686 Rosebank Road, Avondale sustained fire damage. A business interruption (loss of rents claim) and a material damage claim
will be submitted in due course to recover the loss of rents (if any) and the full cost of reinstatement.
On 2 February 2017, the Group purchased an investment property located at 11 Turin Place, East Tamaki for a net purchase price of $14,220,000.
On 13 February 2017, the Directors of the Company approved the payment of a net dividend of $9,275,000 (2.0500 cents per share) to be paid on
8 March 2017. The gross dividend (2.5488 cents per share) carries imputation credits of 0.4988 cents per share. The payment of this dividend will not
have any tax consequences for the Group and no liability has been recognised in the Consolidated Statement of Financial Position as at 31 December
2016 in respect of this dividend.

27
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
Independent auditor’s report
To the shareholders of Property for Industry Limited
We have audited the consolidated financial statements which comprise:
• the consolidated statement of financial position as at 31 December 2016;
• the consolidated statement of comprehensive income for the year then ended;
• the consolidated statement of changes in equity for the year then ended;
• the consolidated statement of cash flows for the year then ended; and
• the notes to the consolidated financial statements, which include significant accounting policies.
Our opinion
In our opinion, the consolidated financial statements of Property for Industry Limited (the Company), including its controlled entity (the Group),
present fairly, in all material respects, the financial position of the Group as at 31 December 2016, its financial performance and its cash flows for the
year then ended in accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and International Financial
Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs NZ) and International Standards on Auditing
(ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised) Code of Ethics for Assurance Practitioners (PES 1)
issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group in the areas of other related assurance services and the benchmarking of director remuneration. The
provision of these other services has not impaired our independence as auditor of the Group.
Our audit approach
Overview
An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement.
Overall group materiality: $2.2 million, which represents 5% of profit before tax excluding valuation movements relating to
investment properties and interest rate derivatives.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above
$0.2 million as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
We have two key audit matters:
• Valuation of Investment Properties; and
• Goodwill impairment assessment
Materiality
Audit scope
Key audit
matters

28
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the
consolidated financial statements as a whole as set out above. These, together with qualitative considerations, helped us to determine the scope of
our audit, the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the
consolidated financial statements as a whole.
Overall group materiality
$2.2 million.
How we determined it
5% of profit before tax excluding valuation movements relating to investment properties and
interest rate derivatives.
Rationale for the materiality benchmark applied
We applied this benchmark because, in our view, profit before tax is the metric against which
the performance of the Group is most commonly measured.
Audit scope
We designed our audit by assessing the risks of material misstatement in the consolidated financial statements and our application of materiality. As
in all of our audits, we also addressed the risk of management override of internal controls including among other matters, consideration of whether
there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a
whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements
of the current year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matterHow our audit addressed the key audit matter
Valuation of Investment Properties
Refer to note 2.1 of the consolidated financial statements.
The Group’s Investment Properties at $1,083 million represent
the majority of the assets as at 31 December 2016.
The valuation of the Group’s property portfolio is inherently
subjective due to, among other factors, the individual nature of
each property, its location and the expected future rental income
for that particular property.
The existence of significant estimation uncertainty, coupled with
the fact that only a small percentage difference in individual
property valuation assumptions, when aggregated, could result in
material misstatement, is why we have given specific audit focus
and attention to this area.
The valuations were carried out by third party valuers, Colliers
International New Zealand Limited, Jones Lang Lasalle Limited,
CBRE Limited and Savills New Zealand Limited (the Valuers). The
Valuers were engaged by the Group, and performed their work in
accordance with International Valuation Standards and the
Australia and New Zealand Valuation and Property Standards.
The Valuers used by the Group are well known firms, with
experience in the market in which the Group operates and are
rotated across the portfolio on a three-yearly cycle.
In determining a property's valuation, the Valuers take into
account property specific current information such as the current
tenancy agreements and rental income earned by the asset. They
then apply assumptions in relation to capitalisation rates and
External valuations
We read and discussed the valuation reports with each of the Valuers. We
confirmed that the valuation approach for each property was in accordance
with accounting standards and suitable for use in determining the carrying
value of Investment Properties at 31 December 2016.
It was evident from our discussions with management and the Valuers and our
review of the valuation reports that close attention had been paid to each
property's individual characteristics and its overall quality, geographic location
and desirability as a whole.
We assessed the Valuers' qualifications, expertise and their objectivity and we
found no evidence to suggest that the objectivity of any Valuer in their
performance of the valuations was compromised.
On a sample basis we agreed property-specific information supplied to
the Valuers by the Group to the underlying property records. No issues
were identified.
Assumptions
Our work over the assumptions focused on the largest properties in the
portfolio and those properties where the assumptions used and/or year-on-year
fair value movement suggested a possible outlier versus market data. We also
engaged our own in-house valuation specialist to critique and challenge the
work performed and assumptions used by the Valuers. In particular, we
compared the valuation metrics used by the Valuers to recent market activity.
We concluded that the assumptions used in the valuations were supportable in
light of available market evidence.
Independent auditor’s report (continued)

29
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
Key audit matterHow our audit addressed the key audit matter
current market rent and anticipated growth, based on available
market data and transactions, to arrive at a range of valuation
outcomes, from which they derive a point estimate. Due to the
unique nature of each property, the assumptions applied take into
consideration the individual property characteristics at a granular
tenant by tenant level, as well as the qualities of the property as
a whole.
The Group has adopted the assessed values determined by
the Valuers.
Overall valuation estimates
Because of the inherent level of precision and subjectivity involved in
determining valuations for individual properties and the existence of acceptable
alternative assumptions and valuation methods, we determined a range of
values that were considered reasonable to evaluate each independent property
valuation used by management.
The valuations adopted by the Group were all, individually, within an acceptable
range. We also considered whether or not there was bias from management in
determining individual valuations and found no evidence of such bias.
Goodwill impairment assessment
Refer to note 5.5 of the consolidated financial statements.
The goodwill balance of $29 million was recognised when
Property for Industry Limited merged with Direct Property Fund
and is supported by an annual impairment review. No impairment
charge has been recorded against this balance in the current
financial year.
Management have used the fair value of the Group less costs of
disposal to support the continued carrying value for the goodwill
balance and this involves the application of subjective judgement
about the control premium. The control premium is considered to
be a key area of judgement.
We evaluated management’s process around testing for goodwill impairment
and performed the following procedures:
• Agreed the daily high and low trade prices for the Group’s shares at year
end to NZX trading data;
• With the assistance of our in-house valuation specialist, we assessed the
reasonableness of the control premium applied in the goodwill impairment
calculation as well as the costs of disposal estimate through examining
market evidence from past transactions; and
• Recalculated the Group’s net assets as at 31 December 2016.
We also performed sensitivity analysis around the control premium assumption
to ascertain the extent of change that individually would be required for the
goodwill balance to be impaired and noted goodwill would not be impaired if the
control premium applied to the calculation was decreased by 50%.
Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. The other information included in the annual report is expected to be made available to us after
the date of this auditor’s report.
Our opinion on the financial statements does not cover the other information included in the annual report and we will not express any form of
assurance conclusion on the other information.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. When we read the other information in the annual report, if we conclude that there is a material
misstatement of this other information, we are required to communicate the matter to the Directors and consider further appropriate actions.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of the consolidated financial statements in
accordance with NZ IFRS and IFRS, and for such internal control as the Directors determine is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements, as a whole, are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs NZ and ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the External Reporting Board’s website at:
https://xrb.govt.nz/Site/Auditing_Assurance_Standards/Current_Standards/Page1.aspx
This description forms part of our auditor’s report.
Independent auditor’s report (continued)

30
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2016
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken so that we might state those matters which
we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our audit work, for this report or for the opinions we
have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Sam Shuttleworth.
For and on behalf of:
Chartered Accountants Auckland
13 February 2017
Independent auditor’s report (continued)

---

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumber
Date
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state whether:Taxable
/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
InterimYear
X
SpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per security
Payment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
Supplementary
Amount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FWP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
27 February, 20178 March, 2017
$9,275,401
Date Payable
8 March, 2017
$0.004988
In dollars and cents
Retained earnings
$0.012826
$0.007674
$NZ$0.002263
Enter N/A if not
applicable
Ordinary SharesNZPFIE0001S5
EMAIL: announce@nzx.com
Notice of event affecting securities
1
Property for Industry Limited
Craig PeirceDirectors' Resolution
+ 64 21 248 6301+ 64 9 303 965713022017

---

HIGHLIGHTS
4
•Record profit after tax for the year of $123.4 million or 27.42 cents per share
•Distributable profit for the year of 7.58 cents per share
•Fourth quarter cash dividend of 2.05 cents per share, total cash dividends for the year of 7.35
cents per share, an increase of 0.05 cents per share over the prior year
•2017 distributable profit guidance of between 7.50 and 7.70 cents per share, dividend guidance
of at least 7.35 cents per share
•Strong balance sheet maintained, committed gearing of 31.0%
•$88.2 million or 8.9% portfolio revaluation uplift, 14.4% increase in net tangible assets per share
to 160.7 cents
•74% of contract rent varied, leased or reviewed during the year
•Portfolio occupancy at 99.6%, 2017 expiries of 11.2%
•$14.2 million acquisition and $8.3 million divestment settled after year-end
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

PORTFOLIO SNAPSHOT
6
31 December 201631 December2015
Valuation
$1,083.3m$986.6m
Number ofproperties
8384
Number of tenants143141
Contract rent$72.5m$72.3m
Occupancy99.6%99.6%
Weighted average lease term
4.79years5.18years
Auckland property
85.3%85.8%
Industrialproperty
85.5%84.7%
•PFI’s portfolio is diversified across 83 properties and 143 tenants, with 99.6% occupancy and a
weighted average lease term of 4.79 years, weighted towards Auckland industrial property
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

PORTFOLIO PERFORMANCE
7
•Valuations:
•$88.2 million of 8.9% portfolio revaluation uplift to $1,083.3 million
•Passing yield firmed from 7.33% to 6.69%
•Leasing:
•32 leases agreed over ~123,000 sqmof space for an average term of 4.9 years
•Lease renewals accounted for more than 82% of the contract rent secured
•84 rent reviews conducted resulting in an average annual uplift of ~1.5% on ~$41.6 million of contract rent
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
TenantAddressTermArea% Rent Roll
EbosGroup58 Richard PearseDrive, Mangere6.0 years10,549 sqm1.8%
Mainfreight36 NealesRoad, EastTamaki3.0 years12,546 sqm1.6%
EbosGroup54 Carbine Road & 6aDonnorPlace, MtWellington6.0 years6,461 sqm1.0%
AstronPlastics 43 CryersRoad, EastTamaki5.0 years6,068 sqm0.9%
Fletcher Building Products304 Neilson Street, Penrose6.0 years13,438 sqm0.9%
27 other transactions, all forleases with contract rent of <$0.55m4.9years73,936sqm9.4%
32 leasing transactionsVarious4.9 years122,998 sqm15.6%

LEASE EVENTS
8
•Balance spread of 2017 lease events, ~23% of events
market related, provides opportunity to access projected
market rental growth:
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
2017 Lease Expiry Profile:
2017 Expiries:
Tenant % RentRoll
PenrosePortfolio (4 Properties)Sistema Plastics2.5%
124aHewlettsRoadFonterra1.3%
2 Pacific RiseHewlett-Packard1.3%
CarlawPark Office ComplexArgosy0.9%
686 Rosebank RoadSony0.7%
OtherVarious4.5%
Total11.2%

9
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
•Health & Safety (H&S):
•H&S a key area of focus for PFI
•H&S also high on tenant’s agenda
•Following initial reviews, all properties now reviewed for H&S on a triennial basis
•Contractor management processes in place for works on site
•Earthquake (EQ):
•4.4% of PFI’s portfolio in Wellington, 2.9% in Christchurch
•Portfolio performed well in November 2016 quakes
•~$0.1 million of damage, to be borne by PFI due to EQ insurance excesses
•PFI’s predominantly Auckland industrial portfolio currently an attractive insurance risk
HEALTH & SAFETY, EARTHQUAKE

MARKET UPDATE
11
•Strong economic growth in 2016, expected to continue in 2017, industrial property market highly
correlated with overall GDP trends, strong demand for industrial space expected in 2017
•Colliers International: Commercial Property Investor Confidence Survey
•Industrial property scored the highest level of investor confidence in each of the three main
centres of Auckland, Wellington and Christchurch
•Tauranga / Mount Maunganuiand Auckland (92% of PFI’s properties) recorded the second
and third highest levels of investor confidence nationally
•CBRE:
•Prime industrial indicative yields below premium grade office for the first time in CBRE’s
recorded history
•Auckland industrial vacancy just 1.7%
•PFI’s quality portfolio weighted towards Auckland industrial property is in excellent shape to
capitalise on continuation of favourable market conditions
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

STRATEGY
12
•PFI’s strategy is to invest in quality industrial property in New Zealand’s main urban centres
•The company aims to drive shareholder returns by:
•Managing the vacancy and upcoming lease expiries
•Opportunistically pursuing both core and value-add industrial acquisitions
•Maximising utilisation of the portfolio
•Divesting of non-core assets when value has been maximised and an opportunity to
recycle capital into industrial property arises
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

DIVESTMENTS
13
Year Ended December2016Year Ended December2015
Address
27 ZelanianDrive, East Tamaki85 Cavendish Drive, Manukau
Net sales proceeds
$8.3m$9.5m
Carrying value
$7.8m$9.0m
Gain on sale
$0.5m$0.5m
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
•~$45 million of property divested over the last three years
•$8.3 million sale of 27 ZelanianDrive, East Tamaki contracted prior to year-end, settled
subsequent to year-end (February 2017)
•Approximately 5% of the portfolio still considered non-core, PFI may look to divest over the
medium term as and when value has been maximised
•2017 strategy:divest of non-core assets when value has been maximised and an opportunity
to recycle capital into industrial property arises

ACQUISITIONS
14
11 Turin Place,
East Tamaki
Purchase price
$14.2m
Tenant
Thermakraft
Property description
Generic industrial
Purchase yield
6.5%
Lease term on settlement
15 years
Rent reviews
Fixed rent reviews,
4.55% every two years
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
•~$65 million of acquisitions over the last three years
•No acquisitions during 2016
•Purchase of 11 Turin Place, East Tamaki subsequent to year-end (February 2017)
•2017 strategy:opportunisticallypursue both core and value-add industrial acquisitions

DEVELOPMENTS
15
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
•~$30 million of developments over the last three years:
•$1.9 million on generic industrial at 54 Carbine Road & 6a DonnorPlace, Mount
Wellington in 2015;
•$25.9 million on bulk store facilities at 124 HewlettsRoad, Mount Maunganuiduring
2015 –2016;
•$3.6 million on bio-fuel facility at 9 Narek Place, Manukauduring 2014 –2015,
remaining land at 9 Narek Place, Manukauleased during 2016 to Fletchers for 10 years
•2017 strategy:maximise utilisation of the portfolio by development of surplus land over the
medium term

OPERATING REVENUE
17
•Operating revenues of
$71.1 million up $4.2 million
or 6.2%
•Around half of the increase
due to FY 2015 acquisitions
($2.0 million)
•Remainder of the increase
from positive leasing activity
that was broad based in
nature, offset by loss of
income from disposals
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

COMPREHENSIVE INCOME
18
•Operating revenuesup $4.2
million or 6.2%, refer slide
17: operating revenue
•Operating expenses down
7.9%, due to lower interest
and bank fees ($1.6
million), non-recoverable
property costs ($0.5 million)
•Effective current tax rate
static at 19.8% (2015:
19.6%)
•Record profit after tax of
$123.4m or 27.42 cents per
share
For the yearended (audited, $000)Dec 16Dec 15Change
Total operating revenue71,10866,9274,181
Non-recoverable property costs(1,646)(2,183)537
Interest expense and bank fees(17,839)(19,398)1,559
Management fees(7,259)(7,608)349
Other expenses(1,230)(1,177)(53)
Total operating expenses(27,974)(30,366)2,392
Total operating earnings43,13436,5616,573
Fair value gain on investment properties88,21446,47141,743
Gain on disposal of investment properties302479(177)
Material damage insuranceincome-17(17)
Fair value gain/ (loss) on derivative financial instruments433(3,952)(3,519)
Total non-operating income and expenses88,94943,01545,934
Profit before taxation132,08379,57652,507
Current taxation(8,535)(7,151)(1,384)
Deferred taxation(136)400(536)
Total income tax expense(8,671)(6,751)(1,920)
Profit after income tax123,41272,82550,587
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

DISTRIBUTABLE PROFIT (CENTS PER SHARE, CPS)
19
•Distributable profit per share
up 0.57 cps or 8.1%
•2016 dividends of 7.35 cps,
0.05 cps ahead of 2015
dividend and guidance
•FY17 earnings guidance of
between 7.50 and 7.70
cents per share, dividend
guidance of at least 7.35cps
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
1.Distributable profit is non-GAAP financial information used by the PFI Board to assist in determining dividends to shareholders.Refer: Appendix 1: Distributable Profit for further detail.
2.Earnings guidance is based on distributable profit before management performance fees, if any.

FUNDS / ADJUSTED FUNDS FROM OPERATIONS
20
For yearended (unaudited, $000, unless noted)Dec 2016
Profit and total comprehensive income after income tax attributable to the shareholders of the Company
123,412
Adjusted for:
Fair value gain on investment properties(88,214)
Gainon disposals of investment properties
(302)
Fair value gainon derivative financial instruments
(433)
Amortisation of tenant incentives1,973
Straight lining of fixed rental increases
(607)
Deferred taxation
136
Funds from operations (FFO)
35,965
FFOper share (cents)
7.99
FFO dividend pay-out ratio
92%
Maintenance capex
(2,962)
Incentives and leasing fees given for the year
(1,729)
Other
(12)
Adjusted funds from operations (AFFO)
31,262
AFFOper share (cents)
6.95
AFFO dividend pay-out ratio
106%
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
•Funds From Operations
(FFO) earnings of 7.99 cps
and Adjusted Funds From
Operations (AFFO),
earnings of 6.95 cps
•FFO dividend pay-out ratio
of 92%, AFFO dividend pay-
out ratio of 106%
1.FFO and AFFO are non-GAAP financial information and are common investor metrics, which have been calculated in accordance with the guidelines issued by the Property Council of Australia.

INVESTMENT PROPERTIES
21
•Portfolio value now in
excess of $1 billion
•$17.2 million of capital spent
on portfolio, including $15.8
million on the finalisationof
the development at 124
HewlettsRoad
•Fair value gain of $88.2
million or 8.9% refer slide 7:
portfolio performance
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

NET TANGIBLE ASSETS (CENTS PER SHARE, CPS)
22
•Net tangible assets (NTA)
per share up 20.2 cps or
14.4% to 160.7 cps
•Fair value gain of $88.2
million or 19.5 cps key
driver of the increase
•Other minor items
accounted for the remaining
increase of 0.7 cps
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
1.Refer: Appendix 2: Financial Position for further detail.

CAPITAL MANAGEMENT
24
•Capital management initiatives helped to ensure a strong balance sheet:
•Equity: $7.5 million raised from dividend reinvestment
•Loan facilities: refinance of facilities in February 2016 and active management of hedging
•Disposal of non-core property: $9.5 million sale settled February 2016, $8.3m sale settled
February 2017
•Committed gearing of 31.0% and interest cover of 3.4 times provides ability to withstand
shocks and capacity for opportunities
•Historic weighted averaged cost of debt (WACOD) continued to trend down as expensive
hedging rolled off, coupled with historic low BKBM rates:
•WACOD December 2015: 5.71%, June 2016: 5.36%, December 2016: 5.24%
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

LOAN FACILITIES
25
Dec 2016Dec 2015
Facilities
Drawn (excluding overdraft)
$333.7m$331.7m
Facilities limit
$375.0m$375.0m
Facilities headroom
$41.3m$43.3m
Facilities term (average)
3.8 years3.8 years
Facilitiesbanks
ANZ, BNZ, CBA, WestpacANZ, BNZ, CBA, Westpac
Covenants
Gearing (adjusted)
30.1%(31.0%committed)33.3%
Interest cover ratio
3.4 times2.9 times
Interest rates
Weightedaverage cost of debt (including margin and fees)
5.24%5.71%
Interestrate hedging (excluding forward starting hedging, $m / rate / duration)
$243m/ 4.53% / 3.0 years$253m/ 4.66% / 3.6 years
Interestrate hedging (forward starting hedging, $m / rate / duration)
$70m/ 3.54% / 2.9 years$55m / 3.92% / 2.9 years
•Facilities refinanced February 2016, average term extended, cost reduced
•Hedging rate for 2017 will reduce to ~4.46%
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
1.Refer: Appendix 3: Hedging for further detail.
2.Adjusted gearing is defined as total borrowings as a percentage of the most recent independent valuation of the property portfolio, adjusted for divestments which had been unconditionally sold
as at year-end and settled subsequent to year-end.

27
•PFI’s strategy is to invest in quality industrial property in New Zealand’s main urban centres and
the company aims to deliver strong, stable shareholder returns
•2016: record financial result, quality industrial portfolio continuing to perform
•2014 -2016: growth in values, consistently high occupancy, reduced leverage, earnings growth
•Company well positioned to capture growth or withstand shocks
•Questions?
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING
REVIEW & QUESTIONS

APPENDIX1:DISTRIBUTABLE PROFIT
29
For yearended (audited, $000, unless noted)Dec 2016Dec 2015
Profit and total comprehensive income after income tax attributable to the shareholders of the Company
123,41272,825
Adjusted for:
Fair value gain on investment properties(88,214)(46,471)
Material damage insurance income
-(17)
Gainon disposals of investment properties
(302)(479)
Tax on depreciation claw-back on disposals of investment properties132-
Fair value (gain) / loss on derivative financial instruments
(433)3,952
Deferred taxation
136(400)
Movementin fixed rent reviews
(607)200
Other
(12)(12)
Distributable profit
34,11229,598
Distributable profit per share (cents)
7.587.01
Dividends paid relating to period reported
33,14131,412
Pay-out ratio (%)
97%106%
1.Distributable profit is non-GAAP financial information and is calculated in accordance with the methodology shown above. Distributable profit is used by the PFI Board to assist in determining
dividends to shareholders.
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

APPENDIX2:FINANCIAL POSITION
30
As at (audited,$000, unless noted)Dec 2016Dec2015Change
Investment properties
1,083,300986,56596,735
Goodwill
29,08629,086-
Other assets
9,41311,593(2,180)
Total assets
1,121,7991,027,24494,555
Borrowings
332,924330,9202,004
Deferred tax liabilities
11,02610,890136
Other liabilities
21,71127,420(5,709)
Total liabilities
365,661369,2303,569
Total equity
756,138658,01498,124
Shares on issue
452,458,592447,692,4604,766,132
Net tangible (excludinggoodwill)assets (cents per share)
16114021
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

APPENDIX3: HEDGING
31
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

DISCLAIMER
32
The information included in this presentation is provided as at 13 February 2017.
Neither Property for Industry Limited (PFI) nor PFIM Limited (PFIM), the manager of PFI, guarantee the repayment of capital or the
performance referred to in this presentation.
Past performance is not a reliable indicator of future performance.
The presentation includes a number of forward looking statements. Forward looking statements, by their nature, involve inherent risks and
uncertainties. Many of those risks and uncertainties are matters which are beyond PFI’sand PFIM’scontrol and could cause actual results
to differ from those predicted. Variations could either be materially positive or materially negative.
While every care has been taken in the preparation of this presentation, PFI and PFIMmakes no representation or warranty as to the
accuracy or completeness of any statement in it including, without limitation, any forecasts.
This presentation has been prepared for the purpose of providing general information, without taking account of any particular investor’s
objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the
information in this presentation, and seek professional advice, having regard to the investor’s objectives, financial situation and needs.
This presentation is solely for the use of the party to whom it is provided.
PROPERTYFORINDUSTRY 2016 ANNUAL RESULTS BRIEFING

---

1

NZX and media announcement 13 February 2017

PFI ANNOUNCES RECORD ANNUAL RESULTS

The PFI management team will present these results via live webcast from 11.00 am NZT today. To view and listen
to the webcast, please visit http://edge.media-server.com/m/p/cztizxmi. We recommend you log on a few minutes
before the start time, and if you cannot attend the live webcast, a recording will be available on PFI’s website shortly
after the conclusion of the live event.

Highlights
 Record profit after tax for the year of $123.4 million or 27.42 cents per share
 Distributable profit
1
for the year of 7.58 cents per share
 Fourth quarter cash dividend of 2.05 cents per share, total cash dividends for the year of 7.35 cents per share,
an increase of 0.05 cents per share over the prior year
 2017 distributable profit guidance of between 7.50 and 7.70 cents per share
2
, dividend guidance of at least 7.35
cents per share
 Strong balance sheet maintained, committed gearing of 31.0%
 $88.2 million or 8.9% portfolio revaluation uplift, 14.4% increase in net tangible assets per share to 160.7 cents
 74% of contract rent varied, leased or reviewed during the year
 Portfolio occupancy at 99.6%, 2017 expiries of 11.2%
 $14.2 million acquisition and $8.3 million divestment settled after year-end

NZX listed industrial property landlord Property for Industry Limited (PFI, the company) today announced record
results for the year ended 31 December 2016.

“Persistence and patience” is PFI Chairman Peter Masfen’s summary of 2016. “We’ve maintained our focus on
industrial property, concentrated on extracting value from strong Auckland demand, and watched and waited for
favourable investment opportunities. A record profit, but— more importantly— another year of PFI delivering on its
promise: consistent, long-term performance and strong, stable returns.”

Financial performance (refer appendix 1)
Operating revenues for the year increased by $4.2 million or 6.2% over the prior year to $71.1 million, as increases
due to acquisitions ($2.0 million), completed developments and rentalised capital expenditure ($1.4 million) and
positive leasing activity ($1.3 million) were partially offset by decreases due to disposals ($0.5 million).

Operating expenses for the year of $28.0 million were down $2.4 million or 7.9%. A reduction in interest expense
and bank fees of $1.6 million, driven by a reduction in the weighted average cost of debt of almost 50 basis points,
was responsible for the majority of this reduction, but reductions in non-recoverable property costs (decrease of $0.5
million) and management fees (decrease of $0.3 million) also contributed. As a result of these decreases, the ratio
of operating expenses to operating revenues reduced to 39.3% from 45.4%.

PFI’s effective current tax rate for the year, being the ratio of current taxation to operating earnings, remained static
at 19.8% (2015: 19.6%).

Non-operating income and expenses, which, for the most part, comprised an $88.2 million fair value gain on
investment properties, were more than double the amount in prior year. After allowing for these non-operating income
and expenses and deferred tax, the company made a record profit after tax of $123.4 million.

1
Distributable profit is a non-GAAP performance measure used by the PFI board in determining dividends to shareholders. Please refer to the
appendices for more detail as to how this measure is calculated.
2
Before management performance fees, if any.

2

Distributable profit and dividends (refer appendix 2)
PFI recorded distributable profit of 7.58 cents per share for the year, an increase of 0.57 cents per share or 8.1%
over the prior year (2015: 7.01 cents per share).

The PFI board has today resolved to pay a fourth quarter final cash dividend of 2.05 cents per share. The dividend
will have imputation credits of 0.50 cents per share attached and a supplementary dividend of 0.23 cents per share
will be paid to non-resident shareholders. The record date for the dividend is 27 February 2017 and the payment
date is 8 March 2017. The dividend reinvestment scheme (DRS) will not operate for this dividend.

The fourth quarter final dividend will take cash dividends for the year to 7.35 cents per share, an increase of 0.05
cents per share over the prior year, resulting in a dividend pay-out ratio of 97% (2015: 106%).

Guidance
PFI Chairman Peter Masfen said: “Looking to 2017, we expect distributable profit before management performance
fees, if any, to be between 7.50 and 7.70 cents per share, subject as always to economic conditions.”

The company has, for the first time, today released an analysis of Funds From Operations (FFO) and Adjusted Funds
From Operations (AFFO), calculated in accordance with the Property Council of Australia’s best practice guidelines
3
.
These calculations show that PFI’s recorded FFO earnings of 7.99 cents per share and AFFO earnings of 6.95 cents
per share, resulting in a FFO dividend pay-out ratio of 92% and an AFFO pay-out ratio of 106%.

Peter Masfen continued: “For some investors, FFO and AFFO earnings are important measures, as there is a belief
that they help investors better understand and compare the underlying financial performance of property entities.
Some investors also advocate for an AFFO dividend pay-out ratio that is less than 100%.

“That said, there are other investors for whom maintaining at least the current level of— or growing— cash dividends
is more desirable.

“The PFI board is looking to balance these views by maintaining or gradually increasing cash dividends, whilst at the
same time seeking to grow AFFO earnings to cover those dividends. That being the case, we expect to pay a cash
dividend of at least 7.35 cents per share in 2017.”

Balance sheet
PFI’s net tangible assets per share increased during the year by 20.2 cents per share or 14.4% to 160.7 cents per
share. The $88.2 million fair value gain on investment properties, discussed further in the portfolio performance
section below, accounted for 19.5 cents per share of the increase, with other minor items accounting for the remaining
increase of 0.7 cents per share.

Capital management
PFI carried out a number of capital management initiatives during the year to ensure that the company maintained a
strong balance sheet.

The company’s DRS operated throughout the year raising $7.5 million.

In February 2016, the company’s $375 million syndicated bank loan facility was refinanced on competitive terms.
Existing lenders ANZ, BNZ, CBA and Westpac committed two $187.5 million tranches until May 2020 and 2021,
extending the average term to expiry to 3.8 years as at end of the year. The cost of the facilities was also reduced
as part of this process.


3
FFO and AFFO are non-GAAP financial information and are common investor metrics. Please refer to the appendices for more detail as to
how this measure is calculated.

3

In addition to these facilities, PFI maintained current total hedging
4
with a notional value of $313 million at an average
rate of 4.31% for an average duration of 3.0 years. This current hedge rate is forecast to remain at low rates during
2017: based on current hedging and debt levels, an average of ~65% of the company’s debt will be hedged at an
average rate of ~4.46% (beginning of 2016: average of ~73% hedged at an average rate of 4.61%). The fair value
of this hedging – recorded on PFI’s statement of financial position – was largely unchanged at year-end (2016: liability
of $10.0 million, 2015: liability of $10.4 million) despite significant volatility during the course of the year as a result
of changes in market interest rates.

When combined with the syndicated bank loan facility PFI’s hedging provides the company with a weighted average
cost of debt (WACOD) of 5.24%
5
, which has continued to trend downwards (WACOD at December 2015: 5.71%), as
historic expensive hedging rolled off during the year and was replaced with hedging at lower rates and low BKBM
rates.

The company ended the year with adjusted gearing
6
of 30.1%. Following the settlement of 11 Turin Place, East
Tamaki (see development, divestments and acquisition below), PFI’s gearing increased slightly to 31.0%, well within
the company’s self-imposed gearing limit of 40% and bank covenants of 50%. The interest cover ratio
7
of 3.4 times
was also well within bank covenants of 2.0 times.

Portfolio performance
Portfolio snapshot as at 31 December 2016 31 December 2015
Valuation $1,083.3m $986.6m
Number of properties 83 84
Number of tenants 143 141
Contract rent $72.5 million $72.3 million
Occupancy 99.6% 99.6%
Weighted avg. lease term 4.79 years 5.18 years
Auckland property 85.3% 85.8%
Industrial property 85.5% 84.7%

Further to the announcement in December, PFI recorded an annual increase from independent valuations in the
value of its property portfolio of $88.2 million or 8.9% to $1,083.3 million. An active year of portfolio management
resulted in a number of individual property values increasing. High levels of demand for industrial property from both
investors and owner occupiers, spurred on by low interest rates, also influenced the increase. As a result of the year-
end valuation process, PFI’s passing yield firmed from 7.33% to 6.69%, and on a portfolio basis there is now no over
or under renting.

Nearly 123,000 square metres representing 18% of PFI’s existing portfolio was leased during the year to 32 new and
existing tenants for an average term of 4.9 years. More than 80% of the contract rent secured by this leasing was as
a result of lease renewals with 25 PFI tenants for an average term of 4.6 years. In addition to this, seven new leases
were secured for an average term of 6.7 years. Incentives required to attract and retain tenants have reduced
noticeably during 2016, with an average incentive of just 0.3 months per year of lease term being recorded in 2016.

Included in the aforementioned totals was the lease of 3,872 square metres to Boxkraft at PFI’s 80 Hugo Johnston
Drive property in Penrose. This property is one of the five purchased by PFI in August 2015 from Sistema Plastics,
with Boxkraft’s lease commencing shortly after Sistema’s departure in January 2017.

4
PFI defines hedging as any debt that has an interest rate secured for more than three months.
5
As at 31 December 2016. Weighted average cost of debt comprises BKBM, hedging, margins and all borrowings related fees.
6
That is, total borrowings as a percentage of the most recent independent valuation of the property portfolio, adjusted for the sale of 27
Zelanian Drive, which had been unconditionally sold as at 31 December 2016 and settled on 1 February 2017.
7
That is, the ratio of interest expense and bank fees to operating earnings excluding interest expense and bank fees.

4

The company also completed rent reviews on 84 leases during the year, resulting in an average annual uplift of 1.5%
on $41.6 million of contract rent.

Looking forward, PFI’s near term leasing outlook remains positive: at year-end the company’s portfolio was almost
100% occupied and 11.2% of contract rent is due to expire during 2017 (as at 31 December 2015: 9.3% was due to
expire during 2016). In total, ~68% of PFI’s portfolio is subject to some form of lease event during 2017, and PFI will
continue to be able to access projected market rental growth as ~35% of those lease events
8
are market related.

Development, divestments and acquisition
The company’s $25.9 million development of four pre-leased bulk store facilities at 124 Hewletts Road in Mount
Maunganui, was completed in June 2016 ahead of schedule and under budget. A new $1.9 million warehouse at 54
Carbine Road & 6a Donnor Place, Mount Wellington was also completed during the first half of the year, with tenant
commitment secured during the build process.

The sale of PFI’s non-core property at 85 Cavendish Drive, Manukau, settled in February 2016, with the funds
realised from that sale being reinvested into the aforementioned developments. In December 2016, the company
contracted to sell a property at 27 Zelanian Drive, East Tamaki, for a net sales price of $8.3 million. The sale of this
vacant property settled subsequent to year-end on 1 February 2017.

Also subsequent to year-end, on 2 February 2017, PFI purchased an industrial property at 11 Turin Place, East
Tamaki. The property is leased for 15 years to Thermakraft
—
a market leader in building and wall wrap, roofing
underlay, and window flashing tape
—
and the lease provides fixed rental growth of 4.55% every two years. The
property was purchased in a sale and lease back transaction for a net purchase price of $14.2 million, representing
a yield on purchase of 6.5%.

Market update
ANZ estimate that the New Zealand economy grew around 3.5% over 2016, and suggest that a similar pace of
annualised growth will be achieved for at least the first half of 2017. Paul Bloxham, the HSBC economist who branded
New Zealand as the "rock-star economy" of the OECD in 2014, has said he expects the country's economy to
continue to outperform many of its peers in the coming years.

This positive period of economic growth, say Colliers International, is reflected in the industrial sector. “The recurring
commentary,” they say, “is the lack of stock.” Access to suitable levels of stock remains a vital ingredient for an
expanding market and across the country demand is outweighing supply. They believe the medium-term outlook for
the industrial sector is robust.

CBRE point out that the amount of new industrial supply that entered the market in 2016 is the largest since 2007,
and they expect 2017 to be another strong year, with no significant slowdown in construction activity and with more
speculative developments in the pipeline than in recent years. Nevertheless, they say given that economic
forecasters have unanimously revised New Zealand’s growth prospects upwards, and because the industrial property
market is highly correlated with overall GDP trends, they expect strong demand for industrial space in 2017.
Consequently, they expect overall industrial vacancy to be stable in 2017 at below 2%. They also predict yields will
largely be stable in 2017.

Strategy and outlook
PFI remains focused on its strategy of investing in quality industrial property in New Zealand’s main urban centres.
The company will continue to drive shareholder returns by actively managing vacancy and upcoming lease expiries,
opportunistically pursuing both core and value-add industrial acquisitions, maximising utilisation of the portfolio and
divesting of non-core assets when value has been maximised and an opportunity to recycle capital into industrial

8
Being ~23% of total contract rent.

5

property arises.

“Commentators are very positive about New Zealand’s economic prospects for 2017,” says Peter Masfen, “but we
should not ignore their caveats: as the ANZ says, ‘the world is awash with risks and challenges’. At PFI, we’ll take it
carefully and stay focused on the long-term. That is the key to successful investing.”

Contact
For further information please contact:

Simon Woodhams Craig Peirce
General Manager Chief Financial Officer and Company Secretary
Phone: +64 9 303 9652 Phone: +64 9 303 9651
Email: woodhams@propertyforindustry.co.nz Email: peirce@propertyforindustry.co.nz

About PFI
PFI is New Zealand's only listed company specialising in industrial property. PFI's portfolio of 84 industrial properties
in Auckland, Hamilton, Mount Maunganui, Wellington and Christchurch, is leased to 143 tenants
9
.

www.propertyforindustry.co.nz


Attachments
NZX Appendix 1 – 12ME 31 December 2016
NZX Appendix 1 – 12ME 31 December 2016 – Financial Statements
NZX Appendix 7 – 12ME 31 December 2016
NZX Annual Results Presentation – 12ME 31 December 2016



9
As at 13 February 2017.

6

Appendices
Appendix 1

Comprehensive income
for the year ended (audited, $000) 31 December 2016 31 December 2015
Total operating revenue 71,108 66,927
Non-recoverable property costs (1,646) (2,183)
Interest expense and bank fees (17,839) (19,398)
Management fees (7,259) (7,608)
Other expenses (1,230) (1,177)
Total operating expenses (27,974) (30,366)
Total operating earnings 43,134 36,561
Fair value gain on investment properties 88,214 46,471
Gain on disposal of investment properties 302 479
Material damage insurance income - 17
Fair value gain / (loss) on derivative financial instruments 433 (3,952)
Total non-operating income and expenses 88,949 43,015
Profit before taxation 132,083 79,576
Current taxation (8,535) (7,151)
Deferred taxation (136) 400
Total income tax expense (8,671) (6,751)
Profit and total comprehensive income after income
tax attributable to the shareholders of the Company
123,412 72,825

7

Appendix 2

Distributable profit
for the year ended (audited, $000) 31 December 2016 31 December 2015
Profit and total comprehensive income after income
tax attributable to the shareholders of the Company
123,412 72,825
Adjusted for:

Fair value gain on investment properties (88,214) (46,471)
Material damage insurance income - (17)
Gain on disposal of investment properties (302) (479)
Tax on depreciation claw-back on disposals of investment properties 132 -
Fair value (gain) / loss on derivative financial instruments (433) 3,952
Deferred taxation 136 (400)
Movement in fixed rent reviews (607) 200
Other (12) (12)
Distributable profit 34,112 29,598
Distributable profit per share (cents) 7.58 7.01
Dividends paid relating to period reported 33,141 31,412
Pay-out ratio (%) 97% 106%

Appendix 3

Funds / Adjusted funds from operations
for the year ended (unaudited, $000) 31 December 2016
Profit and total comprehensive income after income
tax attributable to the shareholders of the Company
123,412
Adjusted for:

Fair value gain on investment properties (88,214)
Gain on disposal of investment properties (302)
Fair value gain on derivative financial instruments (433)
Amortisation of tenant incentives 1,973
Straight lining of fixed rental increases (607)
Deferred taxation 136
Funds from operations (FFO) 35,965
FFO per share (cents) 7.99
FFO dividend pay-out ratio (%) 92%
Maintenance capex (2,962)
Incentives and leasing fees given for the year (1,729)
Other (12)
Adjusted funds from operations (AFFO) 31,262
AFFO per share (cents) 6.95
AFFO dividend pay-out ratio (%) 106%