Precinct 2017 AGM

Annual General Meeting
9 November 2017

Welcome
and good morning
Craig Stobo,
Chairman

BOARD AND EXECUTIVE
George Crawford
Chief Operating Officer
Chris Judd
Director
Rob Campbell
Director
Graeme Wong
Independent Director
Don Huse
Independent Director
Scott Pritchard
Chief Executive Officer
Mohammed Al Nuaimi
Director
Management
Board
Launa Inman
Independent Director
Davida Dunphy
General Counsel and Company Secretary
Richard Hilder
Chief Financial Officer
Anthony Bertoldi
Director

MEETING AGENDA
▪Review performance and activity
▪Shareholder questions
▪Consider and vote on three ordinary
resolutions

STRONG RESULTS
$162.1m
net profit after tax
+2.7%
increase in net operatingincome
$1.24
net tangible assets per share, up 6%
$77.5m
revaluation gain
+3.7%
increase in FY17
dividend

CAPITAL MANAGEMENT
▪Post balance date initiative:
−$150 million subordinated convertible note
−Considering a senior bond issue
(announced today)
▪Sustainable growth:
−Diversify funding sources
−Continue to manage risk

FY18 DIVIDEND
5.80cps
FY18 dividend guidance
1 Dec 2017
FY18 Q1 dividend payment
+3.6%
expected increase
in FY18 dividend

HEALTH AND SAFETY
▪17,000 workers across Precinct’s portfolio
−Contractors/clients/public
▪530 workers on 2 development sites
▪Precinct’s heath and safety polices:
−Developed in accordance with best
practice

20 YEARS
Founded
6 properties
Listed Unit Trust
Re-
invention
Executing
our strategy
Developing
the future
City Centre
Specialist
Bowen Campus
Wynyard Quarter
Mason Brothers
NZX Top 25
$2.0b portfolio
Commercial Bay
Establishment
of Downtown
Precinct
Corporatisation
and improved
governance
PwC Tower
completed

PORTFOLIO
SUCCESS
100%
occupancy
8.7yrs
weighted average
lease term

STRATEGY OVERVIEW
▪Strategy provides clear direction
▪May invest in other city centre real estate
▪Creation of vibrant environments

STRATEGY FOCUS
Empowering
people
Operational
excellence
Developing
the future
PRINCIPLES OF SUCCESS
1.Concentrated ownership in strategic locations
3.Investing in quality
2.Great client relationships
4.A long-term view

Earnings per share –Actual and pathway
Note: The graph presented above represents a hypothetical scenario only and should not be considered a budget, plan or forecast.There is no certainty that earnings will eventuate as illustrated.
4.5
5
5.5
6
6.5
7
7.5
FY 12FY 13FY 14FY 15FY 16FY 17FY 18FY 19FY 20FY 21
Earnings per share after tax
2014 pathway2016 pathwayCAGRActual EPSFY18 guidance
EARNINGS PATHWAY

80%
85%
90%
95%
100%
3.00
5.00
7.00
9.00
121314151617
Occupancy
WALT
Financial Year End
OccupancyWALT
Portfolio WALT and OccupancyWeighted average portfolio age
5 years
10 years
15 years
20 years
25 years
20122013201420152016201720182019
HistoricForecast
QUALITY SHIFT

KEY STRATEGY ACHIEVEMENTS
Asset Age
2012
2017
21 years
11 years
WALT5.9 years
8.7 years
AKL Weighting 50%
72%
Occupancy94%
100%

Auckland
Portfolio
$1.1 billion
Asset value (excluding
developments)
6.1 years
Weighted average lease term
100%
Occupancy
134,800m
2
Net lettablearea
6.0%
Valuation cap rate
*Excludes development properties

Map Key:
Office(potential supply)
Non office(Hotel/Other)
Public investment
City Rail Link
Public regeneration
CommercialBay
Other CBD projects:
■Wynyard Quarter
■Americas cup
■Park Hyatt Hotel
■UOA Engineering
■Light rail
Auckland CBD
market

COMMERCIAL
BAY

HIGH QUALITY
SPACE

COMMERCIAL BAY
▪$88 million increase in value on completion
▪Unconditional agreement to acquire Queen
Elizabeth Square
$213m
of expected profit

HARBOUR
EATS

WYNYARD QUARTER STAGE ONE
▪Completed in June 2017
▪Increase in profit to $16.2 million
▪The innovation precinct totals 13,000sqm
−Mason Brother’s
−5A Innovation Building
−Both 100% leased
18%
return on cost

GENERATOR
50% interest
acquired
GENERATOR
50% interest
acquired

BOWEN CAMPUS
▪100% pre-committed
▪Crown to lease remaining 4 floors of campus
▪Construction works on programme and on
budget

2016

2017

FUTURE
OPPORTUNITIES
1 QUEEN STREET
WYNYARD QUARTER
BOWEN CAMPUS

OUTLOOK
▪Precinct well positioned
▪Strong balance sheet
▪Continue to advance our strategy
▪Strong and growing Auckland
▪Focus on portfolio quality and EPS growth

QUESTIONS
AND
ANSWERS
Please state your name and advise
whether you are a shareholder

FORMAL
BUSINESS

Resolution 1 & 2
Craig Stobo, Chairman
First appointed: 4 May 2010
Board committees: Member of the Audit and Risk, the Due Diligence and
the Remuneration and Nominations Committees.
Launa Inman, Independent Director
First appointed: 28 October 2015
Board committees: Member of the Audit and Risk Committee.

Resolutions
That Craig Stobobe
re-elected as a
director of Precinct.
That Launa Inman be
re-elected as a
director of Precinct.
Resolution 2
Resolution 1

Resolutions
That the directors be
authorised to fix the
remuneration of Ernst
& Young as auditor for
the ensuing year.
Resolution 3

Thank you
PLEASE JOIN US FOR
REFRESHMENTS DIRECTLY
OUTSIDE THIS ROOM.

---

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
NZX announcement - 9 November 2017
Precinct Properties New Zealand Limited Annual General Meeting
10:00am (New Zealand time), Thursday 9 November 2017
Pullman Auckland, Corner Princes Street and Waterloo Quadrant, 1010 Auckland, New Zealand

Chairman’s Opening address
Good morning and welcome everyone. I’m Craig Stobo, Precinct’s Chairman, and it’s a pleasure to
welcome you all here to our 2017 Annual General Meeting.
It has been another good year for Precinct in many respects, we recorded another strong financial
result and again increased our dividend. We have also reduced our risk profile as major developments
were completed or passed construction milestones.
As we continue to focus on our long-term strategy as city centre specialists, we are particularly pleased
with the strong position we are in, not only are we seeing our earnings continue to grow, but we are
also achieving a significant shift upwards in our portfolio quality.
I would now like to introduce the members of the Board and executive team here today.
I am particularly pleased to be welcoming Richard Hilder to his first Annual Meeting in his new capacity
as Chief Financial Officer for Precinct following his recent appointment. Richard has been a member
of the team for 7 years and his appointment reflects the significant contribution Richard has made to
the business and shaping the direction of Precinct’s long-term strategy in recent years. We also have
with us representatives from our auditors, Ernst & Young, tax advisors, KPMG, our legal advisors,
Chapman Tripp, along with Precinct staff.
We will shortly begin by reviewing the recent performance and activity of Precinct. We will then take
any shareholder questions after concluding the presentation.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
Finally, the meeting will also consider three ordinary resolutions this morning, two relating to the re-
appointment of Independent Directors and as with previous years, one resolution on fixing the
remuneration of Precinct’s auditors, Ernst and Young.
We hope you will stay and join us for some morning tea and refreshments after the meeting.
Strong Results
Our financial results confirm another good year for our business.
Net profit after tax was up 17.3% to $162.1 million after achieving a revaluation gain of $77.5 million. Net
tangible assets per share rose 6% to $1.24 and net operating income was 2.7% higher and in line with
guidance.
Dividends paid and attributed to the 2017 financial year totalled 5.60 cents per share, this was 3.7%
higher than last year and represents a payout ratio of around 90%, consistent with Precinct’s dividend
policy.
Capital Management
The Board monitors risk closely and applies sound capital management. As projects advanced during
the year we reduced our risk profile, and we are continuing to diversify funding sources.
In September, we successfully raised $150 million of four-year, fixed- rate subordinated convertible
notes. We believe this is a capital management solution which is well suited to Precinct’s current
strategy and opportunities. It gives us the comfort of having the capital available to match our
development commitments while ensuring that earnings are not diluted in the short term. Post issue, our
committed gearing has reduced supporting growth through a flexible funding option.
Today, we are also pleased to announce the consideration of a senior bond issue. The proceeds of the
considered bond will be used to repay bank debt. We believe this option is well suited to Precinct’s
current strategy and will further improve our capital structure post issue.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
Diversifying our funding sources remains a core component of Precinct’s capital management
strategy. We will prudently consider future funding options which are well suited to Precinct’s strategy
and further improve our capital structure. This allows us to pursue strong opportunities within our
portfolio, which Scott will tell you more about shortly.
In safeguarding a sustainable future, our gearing of 25.1% at year end has subsequently reduced to
around 18% following the convertible notes issue.
As you will know, we reviewed our dividend policy last year, and have continued to match dividends
with cash flow, as defined by adjusted funds from operations, or AFFO. This produces a more
transparent dividend flow and is also more sustainable.
Increased FY18 Dividend
We have said previously we expect dividends to rise as we advance our development programme.
Based on another good year I am pleased to confirm a first quarter dividend for the 2018 financial year
of 1.45 cents per share, representing an increase of 3.6%.
The Board expect to pay a 5.80 cents per share dividend for the 2018 financial year, and are confident
about the dividend growth into the future.
Payment of the 2018 first quarter dividend will be on the 1st of December this year.
Health and Safety
With approximately 17,000 workers across Precinct’s stabilised property portfolio and a current 530
workers on its two development sites, forecasted to increase to 2,000, the Board recognises Precinct’s
influence on health and safety across the business and wider industry. It is something we take very
seriously.
Precinct’s health and safety policies are embedded throughout its operations and are continually
developed in accordance with best practice. During the six months to 30 June 2017, over 150
additional principal audit and monitoring inspections were undertaken outside regular contractor
health and safety monitoring. In addition, we also had 162 contractors and suppliers complete
Precinct’s health and safety pre-qualification processes over the year.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
20 Years on the NZX
And finally, this year we celebrate our 20th birthday as a listed company on the New Zealand Stock
Exchange.
When we first listed back in 1997, we were a unit trust and owned just six properties. We significantly
enhanced our corporate governance when we corporatised in 2011 and have continued to refine our
ongoing strategy in order to grow value for you, our shareholders. Today, Precinct owns 15 properties
across Auckland and Wellington, and is ranked in the NZX top 25.
We adopted our new name in 2012 to reflect our evolution as a business, and have since grown to
become a city centre specialist investing in high quality real estate.
It is an evolution we continue to be excited about.
I’d like to thank you, our shareholders, for being with us on what has been an exciting journey. We look
forward to more strong results as we deliver more of our long-term strategy.
I will now hand you over to Scott to take you through the past year in more detail and our strategy for
continued future growth.
Thank you.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
Scott Pritchard, Chief Executive
Portfolio Success and Strategy Overview
Thank you Craig. It has been a good year. And this slide sums up the good position our portfolio is in
today.
A major highlight for the business has been growing our portfolio occupancy to 100%, this is a great
result which is complimented with a strong weighted average lease term that is now almost nine years.
As Craig mentioned, we have continued to review and refine our strategy since the company listed in
1997.
Precinct has always been a city centre specialist and we will continue to invest in high-quality,
strategically located office real estate. However, both the Board and management believe that to
advance our position as a city centre specialist, considering a broader mix of real estate offers greater
opportunity for Precinct to create value for shareholders.
City centres around the world are enjoying a resurgence. We are taking advantage of this growth in a
variety of ways. Commercial Bay is a great example with Precinct developing a premium retail offering
in the heart of the CBD. Fundamentally, we are growing in, and with, the cities we are part of.
We have a clear strategy for creating vibrant environments with a broad retail, leisure and food and
beverage offering. Our aim is to create precincts that our clients like working in, and that CBD residents,
visitors and whole communities enjoy being in.
Strategy Focus
Precinct has defined its strategic focus into three essential areas including our people, our portfolio and
our developments.
Putting strategy into effect means empowering our team, seeking operational excellence and
developing real estate for the future. Over the last five years our dedicated staff have grown from 14
to 55 with the management company now providing all core functions for the business. Measures of
staff engagement and client satisfaction continue to rise.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
We currently have $900 million of developments which are underway and have identified a further $600
million development pipeline within our portfolio. This is a significant increase from five years ago when
the business had no development capability.
As Craig mentioned briefly at the beginning of the presentation, we are very pleased with the strong
position we are currently in. The next three graphs illustrate this. The first graph illustrates our actual
earnings to the earnings pathways we published in 2014 and 2016.
The next two graphs show the significant jump in our weighted average lease term as a result of our
development activity and the decline in the average age of our portfolio, respectively.
As you can see not only are our earnings growing but we are also achieving a significant increase in
portfolio quality. Achieving a positive result in all three measures is a great outcome and further
reinforces the strength of our business. The following slide shows some of our key strategy achievements
over the last 5 years.
Our asset age has nearly halved, from 21 to 11 years. Along with an extended WALT and full occupancy
we have secured and advanced development in highly strategic locations. We have shifted more
weighting to Auckland, which now accounts for 72% of our portfolio.
City Centre Focus
Our focus on city centres, particularly Auckland is very positive. With continued growth supported by
key drivers such as net migration and tourism, we believe we are well-placed to benefit from the city’s
strong growth going forward.
I’ll start with the Auckland market and our activities in this market.
Auckland is growing and this looks set to continue. And like cities all around the world it is seeing
increasing centralisation. The current slide illustrates the committed and forecast private and public
investment in Auckland city. As you can see, most of the works are occurring in close proximity to
Commercial Bay.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
A major focus for Precinct continues to be the extensive public regeneration which is set to occur on
all surrounding streets of Commercial Bay. Auckland is growing fast and billions of dollars are being
invested in regional infrastructure such as the city rail link and new bus network. Of course, more
recently there has been the commitment by New Zealand’s new Government to a light rail system
which will support Auckland city’s ongoing economic performance.
Our research shows Auckland city centre population growth in 2016 was 17% and it is now growing 6
times faster than Auckland as a whole. With over 12,000 people moving to the city centre in the last
three years, the population is already 15 years ahead of previous predictions of 45,000 people by 2032.
Auckland is certainly moving ahead at pace, and we are very pleased with our positioning in this
market.
Developing the Future – Commercial Bay
The opportunity in Auckland is clear when you look at Commercial Bay.
We remain positive and excited about Commercial Bay. Having launched the project in 2015, we have
gained an additional $88 million increase in the project’s value.
Lease commitments have also increased to around 50% of the retail space and 66% of the office space.
We are attracting leading corporate clients, and we are particularly pleased about the high quality of
local and global retail and food brands choosing Commercial Bay. They will give Auckland a whole
new retail and dining experience in the heart of the city.
We are now forecasting a development profit for Commercial Bay of $213 million, reflecting a return
on cost of 31%.
To give you a sense of what to expect, Commercial Bay will include a range of food and beverage
including a communal dining offer designed by the legendary New York-based AvroKO, who are one
of the world’s most respected names in hospitality design.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
The name for this food offering is Harbour Eats which is distinctively Kiwi, but AvroKO will bring the
international flair. The 700-seat eatery will use plenty of natural greenery and foliage, making most of
the open air atrium that will sit right at the waterfront location.
This will be a truly world-class dining precinct.

Wynyard Quarter Stage One
A major milestone reached this year has been the completion of our most recent development,
Wynyard Quarter Stage One part of the wider Innovation precinct.
The first stage of Wynyard consists of two buildings totalling around 13,000 squares metres of office
space. Achieving 100% occupancy upon completion of both buildings is a great result and we are
delighted to see the development complete ahead of program and consistent with budget.
Precinct has achieved a development profit of 18% or $16.2 million on this project.
Our involvement in this Innovation Precinct shows how we are meeting different client needs in different
ways, and our commitment to building strong partnerships.
This is achieved through a joint venture with Panuku Development Auckland, an Auckland Council-
controlled organisation, and on what is the last site left on Auckland’s waterfront.
Our buildings here have a particular focus on sustainability and innovation.
During the year, we acquired a 50% interest in Generator New Zealand Limited, the co-working and
shared office space provider.
Quality co-working spaces are growing and are substantial businesses in cities around the world. We
see the acquisition of a stake in Generator as being consistent with our strategic focus on building client
relationships and increasing our service levels.
This year Generator was also appointed by ATEED to manage GRID AKL in the Innovation precinct,
where it now operates almost 10,000 sqm of space and is leading an approach to co-working spaces
we expect to see grow.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
Bowen Campus
In Wellington, we are also very positive about our development at Bowen Campus, at the centre of a
unique Government precinct. As with Wynyard Quarter we enjoyed both a revaluation uplift at Bowen
and 100% leasing pre-commitment following the Crown exercising their right to lease the remaining
vacant floors at the campus.
The Kaikoura earthquake changed the fundamentals of the Wellington market, with many buildings still
closed. With limited prime stock available all research houses are predicting increased occupier
demand.
However, we too have been impacted following the earthquake with Deloitte House being closed for
a period and remaining largely unoccupied since it reopened in March. Investigations are continuing
to be undertaken to try and identify the best solution for the property and its existing clients.
The next two slides show the development progress on site at Bowen Campus over the last 12 months.
The works to date at Bowen Campus are progressing well and we remain both on programme and on
budget. The façade is nearly installed on one of the buildings, and we are on track for completion in
April 2019.
Future Opportunities
We are in the good position of having several attractive future development opportunities available to
us within our portfolio.
Our property at 1 Queen Street is part of the Commercial Bay precinct and enjoys a prime waterfront
location offering very good potential for further development as this whole area continues to grow.
At Wynyard we have the option to develop three remaining sites, covering 30,000 square metres and
we are already in discussion with occupiers for Stage 2, developing another 8,000 square metres.
At Bowen Campus we can build a further 20,000 square metres of office space suitable for government
and corporate occupiers.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
Each of these opportunities provide Precinct with feasible opportunities. We hope to commit to the
second stage of Wynyard Quarter within the next year.
Before I conclude and hand back to Craig for the formalities of the meeting, we would like to play you
a short video. It shows the construction time-lapse of 12 Madden Street at Wynyard Quarter, which
recently reached practical completion in July 2017.
Conclusion and Outlook
In summary, it has been a good year, we delivered on strategy and because of this enjoyed strong
results and grew the value of our portfolio.
Just over a year ago we had three big developments all just starting or at an early stage. Since then all
have advanced significantly or been completed.
While there is continued global uncertainty, we expect the New Zealand economy and property
markets to remain strong, particularly in Auckland where growth is driven by population increase,
tourism and construction.
We also expect to see the trend to centralisation remain and allow us to make further gains from our
city-centre strategy. This has put us in the strong position we are in today.
We look forward to further advancing our strategy and shareholder value in the year ahead.
Lastly, I would like to thank the Precinct Board for their support, the Precinct team for their on-going
work during another successful year, and also you, our shareholders, for your continued support of our
business.
I will now hand you back to Craig.
Thank you.

-ends-