Property for Industry Limited/Announcement

Industrial Property Specialist Continues to Deliver

Full Year Results11 February 2018PFIReal Estate

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INDUSTRIAL PROPERTY SPECIALIST
CONTINUES TO DELIVER
The PFI management team will present these results via live webcast from 10.30 am NZT today. To
view and listen to the webcast, please visit https://edge.media-server.com/m6/p/af9awvr6. 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
▪ Significant acquisition activity: $84.3 million of property acquired, improving portfolio metrics and
providing significant medium to long-term development potential
▪ Transition of the Penrose portfolio: approximately $14 million of shareholder value created equating
to a property level internal rate of return of approximately 26%
▪ Strong balance sheet: $70 million rights offer, $100 million of senior secured fixed rate seven-year
bonds, gearing of 30.8%
▪ Dividend policy change and increased dividend for FY18: guidance of full year cash dividends of
approximately 7.55 cents, approximately 95% to 100% of Adjusted Funds From Operations
1

▪ Governance and management changes: David Thomson appointed to the Board as an Independent
Director on 12 February 2018, internalisation of management on 30 June 2017

NZX listed industrial property landlord Property for Industry Limited (PFI, or the Company) today
announced its annual results for the year ended 31 December 2017.

Chairman Peter Masfen noted: “PFI’s 2017 financial results reflect strong leasing outcomes with nearly
97,000 square metres leased during the year. A series of important strategic initiatives have also been
completed during the year, with the internalisation of management, portfolio acquisition, rights offer and
bond offer all contributing to a very successful year.”

Summary
▪ Including the impact of the internalisation payment, net of tax, PFI recorded a profit after tax for the
year of $51.7 million or 11.25 cents per share and net tangible assets of 163.2 cents per share
▪ Excluding the impact of the internalisation payment, net of tax
2
, PFI recorded profit after tax for the
year of $82.6 million or 17.96 cents per share (down 34.5% on the prior year) and net tangible assets
of 169.4 cents per share (up 5.4% from 31 December 2016)
▪ Distributable profit for the year up 6.6% on the prior year to 8.08 cents per share
▪ Fourth quarter cash dividend of 2.15 cents per share, total cash dividends for the year of 7.45 cents
per share, an increase of 0.10 cents per share over the prior year
▪ $43.6 million or 3.7% increase in the value of the property portfolio from independent valuations
▪ 63% of contract rent varied, leased or reviewed during the year
▪ Year-end portfolio occupancy at 99.9%, 2018 expiries of 7.4%

Internalisation
At the Company’s annual meeting in June 2017, PFI’s shareholders passed a resolution to internalise
the management of PFI, and the internalisation was settled on the 30
th
of that month.
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1
Funds From Operations (FFO) and Adjusted Funds From Operations (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. Please refer to Appendix 1 for more detail as to how these measures were calculated.
2
The internalisation of management is a significant one-off event. In order to provide a basis for comparison, some measures
have been presented excluding the impact of internalisation payment, net of tax. Please refer to Appendix 2 for more detail as to
how these measures were calculated.

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Cost savings as a result of the internalisation in the second half of 2017 are estimated at approximately
$2.7 million before interest and tax, equating to an increase in distributable profit of 0.59 cents per share.
After allowing for interest and tax, the increase is $1.4 million or 0.30 cents per share, a contribution of
7.1% to the increase in distributable profit in the second half of 2017. This contribution is ahead of the
6% estimated by Northington Partners in their Independent Appraisal Report.

Financial performance
Operating revenues for the year increased by $2.4 million or 3.4% over the prior year to $73.5 million,
as increases due to positive leasing activity ($1.9 million), acquisitions ($1.7 million) and completed
developments ($0.8 million) were partially offset by decreases due to increased intra-period vacancy
($1.2 million) and disposals ($0.8 million). The transition of the portfolio of five Penrose properties from
the prior tenant (Sistema) to new tenants contributed approximately $0.8 million to the increase in
vacancy.

Operating expenses for the year of $25.9 million reduced by $2.0 million or 7.3%. A reduction in
management fees due to the June 2017 internalisation resulted in a reduction of $4.3 million, which was
partially offset by a $1.6 million increase in administrative expenses incurred from July to December
2017 in lieu of management fees. Non-recoverable property costs also increased by $0.7 million due to
the aforementioned higher levels of vacancy, and costs incurred due to PFI’s recent asbestos testing
programme.

Given these changes in operating revenues and expenses, the ratio of operating expenses to operating
revenues reduced to 35.3% from 39.3%.

In May 2017, PFI received a binding ruling from the Inland Revenue Department confirming that the
proportion of the payment relating to the termination of the PFI management contract is deductible for
income tax purposes. As a result, PFI recorded no current taxation expense in 2017. Current year tax
losses of $2.0 million will be carried forward and are expected to be fully utilised in 2018.

Excluding the impact of the internalisation payment, PFI’s effective current tax rate (being the ratio of
current taxation to operating earnings) increased to 21.0% (2016: 19.8%), this increase being largely
due to the timing of deductible capital expenditure.

Non-operating income and expenses, which, for the most part, comprised the gross charge for the
termination of management agreement of $42.9 million, offset by a $43.6 million fair value gain on
investment properties, totalled income of $1.9 million, as compared to income of $88.9 million in the prior
year.

After allowing for these non-operating income and expenses and deferred tax, the Company made a
profit after tax for the year of $51.7 million or 11.25 cents per share. Excluding the impact of the
internalisation payment, net of tax, the Company recorded profit after tax of $82.6 million or 17.96 cents
per share, down 34.5% on the prior year.

Distributable profit, dividends, FFO and AFFO
PFI recorded distributable profit of 8.08 cents per share for the year, an increase of 0.50 cents per share
or 6.6% over the prior year (2016: 7.58 cents per share).

The PFI Board has today resolved to pay a fourth quarter final cash dividend of 2.15 cents per share.
Due to there being no tax paid by the Company during 2017, the dividend will have no imputation credits
attached and a supplementary dividend will not be paid to non-resident shareholders. The record date
for the dividend is 26 February 2018 and the payment date is 7 March 2018.

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The Company’s dividend reinvestment scheme (DRS) will not operate for this Q4 dividend, having only
operated for the Q2 dividend during 2017, raising $1.5 million.

The fourth quarter final dividend will take cash dividends for the year to 7.45 cents per share, an
increase of 0.10 cents per share over the prior year. The dividend pay-out ratio was 96% (2016: 97%).

PFI also reported FFO earnings of 8.57 cents per share (2016: 7.99 cents per share) and AFFO earnings
of 7.49 cents per share (2016: 6.95 cents per share), resulting in a FFO dividend pay-out ratio of 87%
(2016: 92%) and an AFFO pay-out ratio of 99% (2016: 106%).

Change in dividend policy
The PFI Board has today also resolved to make a change to the Company’s dividend policy.

Whereas previously the dividend policy was based on Distributable Profit, from the start of the 2018
financial year, the new policy will be based on FFO and AFFO.

A copy of the new policy can be found in Appendix 3 but, put simply, the new policy means that dividend
payments will reflect cashflow from sustainable rental activity alone.

The PFI Board believes that the new policy is in line with best practice in this area and is expected to
have a minimal impact on the quantum of dividends paid. The change will also have no impact on the
Company’s DRS.

Guidance
The PFI Board recognises the importance of a rewarding dividend yield for shareholders.

Peter Masfen, explains: “Historically, dividends have increased by approximately 0.05 cps each year, if
performance allowed. However, in the first half of 2018, higher earnings are forecast in part due to the
2017 management internalisation, and it is expected that this will allow for higher dividends in this period.

Therefore, taking all factors into consideration, we expect to pay full year cash dividends of
approximately 7.55 cents per share for the 2018 financial year, up 0.10 cents per share on the prior year.
It is expected that this level of full year cash dividends will approximate 95% to 100% of AFFO, in line
with the Company’s revised dividend policy.”

By way of comparison, this represents full year distributable profit guidance of 8.10 – 8.30 cents per
share, with the range being heavily influenced by the leasing of PFI’s FY18 expiries (7.4% of contract
rent), and in particular the leasing of the expiries at PFI’s Carlaw Park asset in Parnell (see below for
further details). The bottom of the guidance ranges assumes average occupancy during the year of
around 97%, before reaching almost 100% again by the end of 2018.

Balance sheet
PFI’s net tangible assets (NTA) per share increased by 2.5 cents per share or 1.6% from 160.7 cents
per share as at the end of 2016 to 163.2 cents per share as at 2017.

After rebasing for additional shares on issue (-14.9 cents per share) and allowing for the rights offer and
DRS (+13.9 cents per share), the change in NTA per share was driven by the increase in the fair value
of investment properties (described below, +8.7 cents per share), retained earnings (+0.8 cents per
share) and a gain on the disposal of PFI’s property at 65 Hugo Johnston Drive in Penrose (described
below, +0.4 cents per share). Offsetting this were reductions in NTA as a result of the decrease in fair
value of derivative financial instruments (-0.2 cents per share) and the net internalisation payment (-6.2
cents per share).

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Excluding the impact of the internalisation payment, net of tax, PFI’s net tangible assets per share would
have increased by 8.7 cents per share or 5.4% over the year to 169.4 cents per share.

Capital management
PFI carried out several capital management initiatives during the year to ensure that the Company
maintained a strong balance sheet.

In the last quarter of 2017, PFI raised approximately $70 million of new equity via a rights offer, to support
acquisition and ongoing activity across its portfolio. Existing shareholders were given the opportunity to
purchase one additional share for every ten held, and there was a high level of take-up by those existing
shareholders: almost 80% of the new shares available under the rights offer.

In November 2017, the Company also issued $100 million of senior secured fixed rate seven-year bonds.
The interest rate of 4.59% per annum, which reflected a margin of 1.65% per annum above the seven-
year swap rate, was swapped back to float interest rates via fixed rate receiver swaps.

PFI Chief Financial Officer and Company Secretary, Craig Peirce, noted: “Whilst the bank loan market
remains supportive of PFI and the listed property sector more generally, we are delighted to have taken
advantage of market conditions to have successfully issued PFI’s inaugural senior secured bond. The
bond not only helps us to diversify the Company’s borrowings, but also increases the average term to
expiry of all facilities to 3.7 years as at the end of 2017.”

No changes were made to the Company’s $375 million syndicated bank loan facility with ANZ, BNZ,
CBA and Westpac, which expires in equal portions in May 2020 and 2021. Following the senior secured
bond offer, PFI has approximately $100 million of unutilised bank loan capacity.

PFI’s weighted average cost of debt (WACOD) reduced to 4.96%
3
as at 31 December 2017, a significant
reduction from the 31 December 2016 rate of 5.24%, but up slightly from the end of the interim period
(4.78%) rate, which was particularly low due to the increased levels of borrowings to fund the
internalisation at that time.

The Company ended the year with gearing
4
of 30.8%, well within the Company’s self-imposed gearing
limit of 40% and bank covenants of 50%. The interest cover ratio
5
of 3.7 times was also well within bank
covenants of 2.0 times.

Portfolio performance
Portfolio snapshot as at 31 December 2017 31 December 2016
Valuation $1,210.8m $1,083.3m
Number of properties 92 83
Number of tenants 148 143
Contract rent $79.6m $72.5m
Occupancy 99.9% 99.6%
Weighted avg. lease term (WALT) 5.33 years 4.79 years
Auckland property 82.4% 85.3%
Industrial property 86.4% 85.5%

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3
Weighted average cost of debt comprises BKBM, hedging, margins and all borrowings related fees.
4
That is, total borrowings as a percentage of the most recent independent valuation of the property portfolio.
5
That is, the ratio of interest expense and bank fees to operating earnings excluding interest expense and bank fees.

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Further to the announcement in December, PFI recorded an annual increase from independent
valuations in the value of its property portfolio of $43.6 million or 3.7% to $1,210.8 million. A key driver
of this valuation outcome was the successful leasing described below. High levels of demand for
industrial property from both investors and owner occupiers also influenced the increase. As a result of
the year-end valuation process, PFI’s passing yield firmed from 6.69% to 6.57%, and on a portfolio basis
there continues to be no over or under renting.

Nearly 97,000 square metres representing more than 14% of PFI’s existing portfolio by rent was leased
during the year to 27 new and existing tenants for an average increase in term of 5.5 years. Lease
renewals with 12 PFI tenants for an average term of 4.6 years represented approximately half of the
contract rent secured. In addition to this, fifteen new leases were secured for an average term of 6.4
years. Across these renewals and new leases low levels of incentives were required to attract and retain
tenants. Headline rental growth is being achieved, with contracted rental rates ahead of December 2016
market rents.

The Company also completed rent reviews on 73 leases during the year, resulting in an average annual
uplift of 2.5% on $38.6 million of contract rent.

PFI has now completed the successful transition of the portfolio of five Penrose properties purchased
for $28.5 million in August of 2015. In October of 2017, just over two years after purchase, Ryco
Hydraulics began their occupation of 4 Autumn Place, and now all properties have been transitioned:
four properties from former tenant Sistema to new tenants and one property has been sold for a gain on
sale of $1.9 million.

Looking forward, the near-term leasing outlook remains positive: at year-end, the Company’s portfolio
was almost 100% occupied and just 7.4% of contract rent is due to expire during 2018 (as at 31
December 2016: 11.2% was due to expire during 2017). Of that 7.4% of contract rent, expiries at PFI’s
Carlaw Park asset in Parnell represent 3.2%, the leasing of that space being a key priority in 2018.

Around 68% of PFI’s portfolio is subject to some form of lease event during 2018. PFI will continue to
access projected market rental growth as approximately 25% of those lease events
6
are market related.

Divestments, acquisitions and development
2017 has been a busy year of divestments and acquisitions for PFI.

The sale of PFI’s vacant industrial property at 27 Zelanian Drive, East Tamaki, settled in February 2017.
Also in February 2017, the Company purchased a $14.2 million
7
industrial property at 11 Turin Place,
East Tamaki.

In May 2017, the Company accepted an unsolicited offer to sell its property at 65 Hugo Johnston Drive,
Penrose, for a gross sales price of $14.3 million.

In October 2017, PFI secured a portfolio of eight industrial properties and one head office for an
acquisition price of $70.0 million. The portfolio has occupancy of 100% and was acquired on a passing
yield of 7.22%. The WALT of the portfolio – 13.9 years on acquisition – increased PFI’s overall WALT
by more than half a year. The portfolio acquisition was settled on 31 October 2017 and has been
successfully integrated into PFI’s operations.

In speaking about the portfolio acquisition, PFI General Manager Simon Woodhams noted: “In addition
to the immediate benefits of this transaction, the acquisition provides PFI with significant medium to
--------

6
Being ~17% of total contract rent.
7
Net purchase price.

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long-term development potential as a result of low site coverage of approximately 25% across the nine
sites.”

Tenant commitment continues to be sought for the Company’s new 2,500 sqm warehouse to be built on
surplus land at 212 Cavendish Drive, Manukau.

Market update
At a macro level, ANZ retain a broadly positive medium-term expectation: they forecast of annual growth
of “up towards 3% by the end of 2018, and averaging 2½-3% over the next couple of years overall” and
note that this is effectively the average rate of growth experienced since 2010.

In their December 2017 Auckland Market Outlook, CBRE note that for industrial property “... structural
economic changes [are] supporting demand and the supply outlook [is] remaining fairly well balanced
relative to our absorption forecasts.”

They go on to say that “... secondary industrial continues as the market with the best return outlook,
largely driven by favourable supply and demand conditions underpinning relatively good rent growth.”
Their forecast of annual returns over the next five years totals 11.9% per annum, comprising an income
return of 6.5% and capital growth of 5.4%.

Prime industrial ranks seventh out of 12 property classes in their forecasts, with annual returns over the
next five years expected to total 8.8% per annum, comprising an income return of 5.6% and capital
growth of 3.2%. They note that prime industrial’s very firm cap rates provide “...limited potential for
further firming to influence its return rankings.”

Governance changes
The PFI Board is also pleased to announce the appointment of David Thomson to the Board as an
Independent Director, with effect from today.

David is a senior partner and member of the Board of Management at law firm Buddle Findlay, where
he runs a broad corporate and commercial law practice, with particular expertise in mergers and
acquisitions. He advises a wide range of local and international businesses and public-sector clients
including Auckland Council, Panuku Development Auckland, The University of Auckland and Te Papa.

David was raised in Christchurch, where he completed commerce and law degrees at the University of
Canterbury. He then practiced law in Wellington and London, before returning to Buddle Findlay in 2000
and becoming a partner of the firm in Auckland in 2002.

“We’re delighted David has agreed to bring his expertise and experience to the PFI Board,” said PFI
Chairman Peter Masfen. “Through his clients, he has an active involvement in a wide variety of sectors,
especially in matters concerning the growth of Auckland, as well as experience guiding companies
through change. He brings a valuable and fresh perspective.”

Please refer to the separate announcement made today for further details.

Strategy and outlook
2017 represented a significant year for PFI: a major acquisition funded by a rights offer, the Company’s
inaugural retail bond offer and the internalisation of management were all successfully concluded, and
the Company has ended the year with improved operating and financial metrics.

Simon Woodhams notes: “PFI has ended 2017 in great shape, with significant balance sheet capacity
to opportunistically pursue both core and value-add industrial acquisitions.”

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PFI Deputy Chairman Anthony Beverley concludes: “If you look at a number of our recent transactions,
particularly the TIL transaction, and the earlier Sistema transaction, you see PFI operating at a scale
that for a long time it didn’t have. And yet strategically nothing has changed: the yardstick has always
been maintaining and growing earnings per share.”

“In 2018, we remain focused on investing in quality industrial property in New Zealand’s main centres.
Our internalised team will continue to drive shareholder returns by actively managing vacancy and
upcoming lease expiries, maximising utilisation of the portfolio and divesting of non-core assets when
value has been maximised.”

ENDS

ABOUT PFI & CONTACT

PFI is New Zealand’s only listed company specialising in industrial property. PFI’s nationwide portfolio of 92 properties is leased
to 148 tenants.

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
---
Property for Industry Limited
Shed 24, Prince’s Wharf, 147 Quay Street, Auckland 1010
PO Box 1147, Shortland Street, Auckland 1140
---
www.propertyforindustry.co.nz

Attachments
NZX Appendix 1 – 12ME 31 December 2017
NZX Appendix 1 – 12ME 31 December 2017 – Financial Statements
NZX Appendix 7 – 12ME 31 December 2017
NZX Annual Results Presentation – 12ME 31 December 2017

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Appendices
Appendix 1 – Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)
Funds / Adjusted Funds From Operations
For the year
ended
For the year
ended
(unaudited, $000, unless noted)
31 December
2017
31 December
2016
Profit and total comprehensive income after income
tax attributable to the shareholders of the Company
51,684 123,412
Adjusted for:
Fair value gain on investment properties (43,595) (88,214)
Material damage insurance income (504) -
Gain on disposal of investment properties (1,949) (302)
Fair value loss / (gain) on derivative financial instruments 1,230 (433)
Amortisation of tenant incentives 2,287 1,973
Straight lining of fixed rental increases (490) (607)
Deferred taxation (2,142) 136
Termination of management agreement 42,869 -
Current taxation without deductibility of termination of management
agreement
(10,010) -
Funds from operations (FFO) 39,380 35,965
FFO per share (cents) 8.57 7.99
FFO dividend pay-out ratio (%) 87% 92%
Maintenance capex (2,641) (2,962)
Incentives and leasing fees given for the year (2,316) (1,729)
Other (12) (12)
Adjusted funds from operations (AFFO) 34,411 31,262
AFFO per share (cents) 7.49 6.95
AFFO dividend pay-out ratio (%) 99% 106%

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Appendix 2 – Earnings and net tangible assets excluding the impact of the internalisation payment, net
of tax
Adjusted earnings per share For the year
ended
For the year
ended
(unaudited, $000, unless noted)
31 December
2017
31 December
2016
Total comprehensive income attributable to the shareholders of
the Company
51,684 123,412
Adjusted for internalisation:
Termination of management agreement 42,869 -
Tax benefit of termination of management agreement (12,003) -
Adjusted total comprehensive income attributable to the
shareholders of the Company
82,550 123,412
Weighted average number of ordinary shares (shares) 459,600,237 450,078,636
Adjusted basic and diluted earnings per share (cents) 17.96 27.42

Adjusted net tangible assets per share As at As at
(unaudited, $000, unless noted)
31 December
2017
31 December
2016
Net tangible assets 813,857 727,052
Adjusted for internalisation:
Termination of management agreement 42,869 -
Tax benefit of termination of management agreement (12,003) -
Adjusted net tangible assets 844,723 727,052
Closing shares on issue (shares) 498,723,330 452,458,592
Adjusted net tangible assets per share (cents) 169.4 160.7

Appendix 3 – Revised Dividend Policy

The dividend policy of the Property for Industry Limited Group (the Group) is to distribute between 80%
to 90% of Funds From Operations (FFO) and 95% to 100% of Adjusted Funds From Operations
(AFFO).

FFO and AFFO are non-GAAP financial information and are common investor metrics. They are
calculated in accordance with the guidelines issued by the Property Council of Australia.

To provide sufficient flexibility for dividends to be maintained or normalised despite variations in FFO
and AFFO, the payout ratios may be decreased or increased from time to time.

In fixing a dividend for any period, consideration will be given to, amongst other things, the Group’s
current and forecast financial performance and position, general business and financial conditions, and
the solvency requirements of the Companies Act.

Dividends are paid quarterly, the payment of dividends is not guaranteed by the Group, and the
Group’s dividend policy may change from time to time.

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Property for Industry Limited (PFI)
Results for announcement to the market
Reporting period 12 months to 31 December 2017
Previous reporting period 12 months to 31 December 2016

Amount (000s) Percentage change
Revenue from ordinary
activities
$NZ 73,528 +3.4%
Profit from ordinary activities
after tax attributable to
shareholders
$NZ 51,684 -58.1%
Net profit attributable to
shareholders
$NZ 51,684 -58.1%

Interim/final dividend Amount per security Imputed amount per security
Final dividend $NZ 0.021500 $0.000000

Record date 26 February 2018
Dividend payment date 7 March 2018

Comments: 1. “Profit from ordinary activities after tax” and “Net profit
attributable to shareholders” includes a “termination of
management agreement” expense of $NZ 42,869k.
Excluding this one off expense, net of tax, “Profit from
ordinary activites after tax” and “Net profit attributable to
shareholders” would have been $NZ 82,550k, a decrease of
33.1% from the previous reporting period.
2. No imputation credits are available to attach to this dividend
in accordance with the imputation credit rules and as
determined by the Directors of PFI.
3. This announcement is extracted from PFI’s audited financial
statements as at and for the year ended 31 December 2017.
A copy of these audited financial statements is attached to
this announcement.

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FINANCIAL
STATEMENTS
Property
for Industry
Limited
Group
Financial
Statements
31 December
2017
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
ALL VALUES IN $000’SNOTE20172016
OPERATING REVENUE
Rental and management fee income2.2 73,450 71,086
Licence income6.8 50 –
Interest income 28 22
Total operating revenue 73,528 71,108
OPERATING EXPENSES
Non-recoverable property costs2.3 (2,357) (1,646)
Interest expense and bank fees (17,768) (17,839)
Administrative expenses6.1 (2,891) (1,230)
Management fees6.8 (2,919) (7,259)
Total operating expenses (25,935) (27,974)
Total operating earnings 47,593 43,134
NON-OPERATING INCOME AND EXPENSES
Fair value gain on investment properties2.1 43,595 88,214
Gain on disposal of investment properties 1,949 302
Material damage insurance income 504 –
Fair value (loss) / gain on derivative financial instruments (1,230) 433
Termination of management agreement5 (42,869) –
Total non-operating income and expenses 1,949 88,949
Profit before taxation 49,542 132,083
INCOME TAX BENEFIT / (EXPENSE)
Current taxation6.2 – (8,535)
Deferred taxation6.2 2,142 (136)
Total income tax benefit / (expense) 2,142 (8,671)
Profit and total comprehensive income after income tax
attributable to the shareholders of the Company4.1 51,684 123,412
Basic and diluted earnings per share (cents)4.2 11.25 27.42
The accompanying notes form part of these financial statements.
2
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
Cents
per Share
No. of
Shares
Ordinary
Shares
($000s)
Retained
Earnings
($000s)
Total
Equity
($000s)
Balance as at 1 January 2016– 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
Total comprehensive income–– – 51,684 51,684
Issue of shares
Rights issue – 45,337,280 67,690 – 67,690
Dividends and reinvestment
Q4 2016 final dividend - 8/3/2017 2.05 – – (9,275) (9,275)
Q1 2017 interim dividend - 29/5/2017 1.75 – – (7,918) (7,918)
Q2 2017 interim dividend - 1/9/2017 1.75 – – (7,918) (7,918)
Q2 2017 dividend reinvestment – 927,458 1,519 – 1,519
Q3 2017 interim dividend - 22/11/2017 1.80 – – (8,977) (8,977)
Balance as at 31 December 2017– 498,723,330 562,429 280,514 842,943
The accompanying notes form part of these financial statements.
3
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
ALL VALUES IN $000’SNOTE20172016
CURRENT ASSETS
Cash at bank 605 –
Accounts receivable, prepayments and other assets6.3 1,295 9,029
Taxation receivable 32 –
Total current assets 1,932 9,029
NON-CURRENT ASSETS
Investment properties2.1 1,210,805 1,083,300
Property, plant and equipment 95 –
Derivative financial instruments3.2 272 384
Goodwill6.5 29,086 29,086
Total non-current assets 1,240,258 1,112,770
Total assets 1,242,190 1,121,799
CURRENT LIABILITIES
Bank overdraft – 113
Derivative financial instruments3.2 372 242
Accounts payable, accruals and other liabilities6.4 8,261 8,669
Taxation payable – 2,579
Total current liabilities 8,633 11,603
NON-CURRENT LIABILITIES
Borrowings3.1 370,635 332,924
Derivative financial instruments3.2 11,095 10,108
Deferred tax liabilities6.2 8,884 11,026
Total non-current liabilities 390,614 354,058
Total liabilities 399,247 365,661
Net assets4.3 842,943 756,138
EQUITY
Share capital 562,429 493,220
Retained earnings 280,514 262,918
Total equity 842,943 756,138
These Group financial statements are signed on behalf of Property for Industry Limited and were authorised for issue on 12 February 2018.

Peter Masfen Anthony Beverley
Chairman Chairman, Audit and Risk Committee
The accompanying notes form part of these financial statements.
4
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2017
ALL VALUES IN $000’S20172016
CASH FLOWS FROM OPERATING ACTIVITIES
Property income received72,853 71,194
Material damage insurance income 504 –
Licence income 50 –
Net GST received 95 350
Interest received 28 22
Interest and other finance costs paid (19,244) (18,105)
Payments to suppliers and employees (6,801) (12,542)
Income tax paid (2,611) (8,120)
Termination of management agreement (42,869) –
Net cash flows from operating activities 2,005 32,799
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment properties 21,765 9,927
Acquisition of investment properties (84,283) –
Acquisition of assets relating to a business combination (106) –
Acquisition of property, plant and equipment (15)
Expenditure on investment properties (12,769) (19,903)
Capitalisation of interest on development properties – (190)
Net cash flows from investing activities (75,408) (10,166)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (repayment of) / proceeds from syndicated bank facility (61,000) 2,000
Proceeds from fixed rate bonds 100,000 –
Proceeds from the issue of new shares 67,690 –
Proceeds from institutional credit facility61,400–
Repayment of institutional credit facility(61,400)–
Dividends paid to shareholders (32,569) (25,288)
Net cash flows from financing activities 74,121 (23,288)
Net increase / (decrease) in cash and cash equivalents 718 (655)
Cash and cash equivalents at beginning of year (113) 542
Cash and cash equivalents at end of year 605 (113)
Cash and cash equivalents at end of year comprises:
ALL VALUES IN $000'S20172016
Cash at bank 605 –
Bank overdraft– (113)
Cash and cash equivalents at end of year 605 (113)
The accompanying notes form part of these financial statements.
5
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

RECONCILIATION OF PROFIT AFTER INCOME TAX
TO NET CASH FLOWS FROM OPERATING ACTIVITIES
FOR THE YEAR ENDED 31 DECEMBER 2017
ALL VALUES IN $000’S 20172016
Profit for the year after income tax 51,684 123,412
Non cash items:
Fair value gain on investment properties (43,595) (88,214)
Gain on disposal of investment properties (1,949) (302)
Fair value loss / (gain) on derivative financial instruments 1,230 (433)
Deferred taxation (2,142) 136
Depreciation26–
Provision for doubful debts67–
Movements in working capital items:
Accounts receivable, prepayments and other assets (1,250) 287
Accounts payable, accruals and other liabilities 545 (2,502)
Taxation receivable / payable (2,611) 415
Net cash flows from operating activities 2,005 32,799
The accompanying notes form part of these financial statements.
6
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
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 transactions10
2. PROPERTY11
2.1. Investment properties11
2.2. Rental and management fee income18
2.3. Non-recoverable property costs18
3. FUNDING19
3.1. Borrowings19
3.2. Derivative financial instruments20
4. INVESTOR RETURNS AND INVESTMENT METRICS21
4.1. Relationship of total comprehensive income to dividends paid21
4.2. Earnings per share22
4.3. Net tangible assets per share22
5. INTERNALISATION OF MANAGEMENT22
6. OTHER23
6.1. Administrative expenses23
6.2. Taxation24
6.3. Accounts receivable, prepayments and other assets26
6.4. Accounts payable, accruals and other liabilities26
6.5. Goodwill26
6.6. Financial instruments27
6.7. Financial risk management27
6.8. Related party transactions29
6.9. Operating segments30
6.10. Capital commitments30
6.11. Subsequent events30
7
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

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 listed on the NZX Main Board (NZX: 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 2017 and 31 December 2016, 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 replaces NZ IAS 39 Financial Instruments - Recognition and Measurement and addresses the
recognition, measurement and classification of financial assets and financial liabilities. It is required to be adopted by the Group in the financial
statements for the year ending 31 December 2018. PFI has assessed the impact of this standard on the Group and no significant changes are
expected to the recognition, measurement, classification of financial assets and liabilities compared with the Group’s existing accounting policies.
• NZ IFRS 15 ‘Revenue from Contracts with Customers’. This standard addresses the recognition of revenue from contracts with customers and is
required to be adopted by the Group in the financial statements for the year ending 31 December 2018. 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. PFI has assessed the impact of this standard on the Group and no significant changes are expected
to the recognition of revenue compared with existing accounting policies.
• 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.
8
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

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 11
3.2. Derivative financial instruments Page 20
5. Internalisation of Management Page 22
6.2. Taxation Page 24
6.5. Goodwill Page 26
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, apart from the fixed rate bonds
(refer Note 3.1 (iii) for further details).
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. GENERAL INFORMATION (CONTINUED)
9
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

1. GENERAL INFORMATION (CONTINUED)
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:
Internalisation
On 22 June 2017, the Company’s shareholders approved the internalisation of management which was effective 30 June 2017. For further details,
refer Note 5.
Investment property acquisitions and disposals
On 2 February 2017, the Group purchased an investment property located at 11 Turin Place, East Tamaki for a net purchase price of $14.3 million.
On 21 June 2017, the Group disposed of an investment property located at 65 Hugo Johnston Drive, Penrose for a net sales price of $14.0 million.
On 31 October 2017, the Group purchased a portfolio of nine investment properties comprising:
Property
Net Purchase
Price (million)
61 McLaughlins Road, Manukau$20.9
39 Edmundson Street, Napier $2.7
330 Devon Street East, New Plymouth$1.4
2 Smart Road, New Plymouth$4.1
20 Constance Street, New Plymouth$3.3
28 Paraite Road, New Plymouth$14.9
11 Sheffield Street, Blenheim$6.1
15 Artillery Place, Nelson$7.0
41 & 55 Foremans Road, Christchurch$9.6
$70.0
For further details, refer Note 2.
Capital Raising
On 7 November 2017, the Company completed a 1 for 10 rights issue, raising a total of $67.7 million (net of issue costs) through the issue of 45 million
shares at $1.54 per share.
Bond Issue
On 28 November 2017, PFI issued $100 million of fixed rate bonds with a 7 year term expiring 28 November 2024, paying an interest rate of 4.59%.
For further details, refer Note 3.1 (iii).
10
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

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’S20172016
Opening balance 1,083,300 986,565
Capital movements:
Additions 84,283 –
Disposals (12,188) (7,993)
Capital expenditure 10,422 17,058
Capitalised interest
a
– 190
Movement in lease incentives, fees and fixed rental income 1,393 (734)
83,910 8,521
Unrealised fair value gain 43,595 88,214
As at 31 December 1,210,805 1,083,300
a
No interest was capitalised to investment properties in 2017. The effective interest rate applied to capitalised interest in 2016 was 5.17%.
11
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

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
2017201720162017201620172016201720172016201720172017
Avondale:
15 Copsey Place Canterbury 100%100%5.9%6.2% 751 732 6,878 CBRE 11,820 56 784 12,660
15 Jomac Place Southern Spars 100%100%6.7%6.6% 1,614 1,568 9,378 CBRE 23,600 (27) 427 24,000
61-69 Patiki Road Bidvest 100%100%7.0%7.4% 1,174 1,120 9,767 Savills 15,200 486 1,064 16,750
320 Rosebank Road Doyle Sails 100%100%6.0%6.3% 679 679 6,625 JLL 10,700 (33) 733 11,400
686 Rosebank Road New Zealand Comfort 98%97%7.0%6.8% 2,447 2,276 21,563 Savills 33,400 899 701 35,000
99%99%6.7%6.7% 6,665 6,375 54,211 94,720 1,381 3,709 99,810
East Tamaki:
17 Allens Road TSB Living 100%100%6.7%6.5% 1,034 1,000 9,926 Colliers 15,300 605 (405) 15,500
43 Cryers Road Astron Plastics 100%100%6.1%6.2% 721 703 6,068 Savills 11,250 120 380 11,750
6-8 Greenmount Drive Bridon 100%100%7.7%7.5% 644 644 6,590 CBRE 8,600 81 (306) 8,375
92-98 Harris Road GrainCorp 100%100%8.6%8.3% 1,309 1,265 10,687 CBRE 15,250 (69) 69 15,250
36 Neales Road Mainfreight 100%100%6.3%6.4% 1,160 1,160 12,546 JLL 18,000 21 379 18,400
1 Ron Driver Place Stewart Scott Cabinetry 100%100%5.3%5.3% 403 403 4,032 Colliers 7,550 (23) 73 7,600
78 Springs Road Fisher & Paykel Appliances 100%100%6.9%7.1% 5,748 5,580 41,387 JLL 78,500 478 3,822 82,800
10c Stonedon Drive Chemical Freight Services 100%100%7.0%7.1% 824 824 8,711 Colliers 11,650 – 50 11,700
11 Turin Place Thermakraft Industries 100%n/a6.0%n/a 925 n/a 8,523 Savills – 14,365 1,135 15,500
12 Zelanian Drive Central Joinery 100%100%5.5%5.7% 564 564 6,098 CBRE 9,850 8 417 10,275
23 Zelanian Drive Exclusive Tyre Distributors 100%100%6.2%5.9% 416 385 3,811 Savills 6,500 (5) 255 6,750
100%100%6.7%6.9% 13,748 12,528 118,379 182,450 15,581 5,869 203,900
Manukau:
212 Cavendish Drive
a
Mainfreight 100%100%6.1%6.7% 1,368 1,288 18,596 Colliers 19,100 980 2,320 22,400
232 Cavendish Drive
a
TIL Logistics 100%100%6.7%6.8% 1,354 1,354 16,832 JLL 19,800 22 378 20,200
47 Dalgety Drive Peter Hay Kitchens 100%100%7.3%7.5% 979 979 8,860 Savills 13,050 21 429 13,500
59 Dalgety Drive Goodman Fielder 100%100%8.1%7.8% 1,345 1,300 8,649 Savills 16,700 86 (86) 16,700
1 Mayo Road Transdiesel 100%100%6.5%6.5% 542 515 6,361 Savills 7,950 (18) 418 8,350
61 McLaughlins Road TIL Logistics 100%n/a5.3%n/a 1,150 n/a 13,347 Colliers – 20,894 906 21,800
9 Nesdale Avenue Iron Mountain 100%100%6.1%6.2% 622 610 14,182 JLL 9,800 31 369 10,200
9 Narek Place Z Energy 100%100%5.3%5.3% 530 518 5,663 Savills 9,850 (5) 155 10,000
100%100%6.4%6.8% 7,890 6,564
92,490 96,250 22,011 4,889 123,150
a
Excludes development land shown separately below.
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017
12
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

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
2017201720162017201620172016201720172016201720172017
Mt Wellington:
30-32 Bowden Road Fletcher Building Products 100%100%6.6%6.8% 1,672 1,457 17,047 CBRE 21,390 (26) 3,986 25,350
50 Carbine Road Atlas Copco 100%100%5.3%5.2% 202 190 2,592 Colliers 3,680 2 118 3,800
54 Carbine Road & 6a Donnor Place EBOS 100%100%6.5%6.6% 1,723 1,710 16,872 CBRE 25,800 401 199 26,400
76 Carbine Road Atlas Gentech 100%100%5.5%5.9% 433 433 5,080 Colliers 7,400 (70) 520 7,850
7 Carmont Place CMI 100%100%5.6%5.8% 588 581 5,336 Colliers 10,100 63 337 10,500
6 Donnor Place Wickliffe 100%100%5.6%5.2% 840 780 14,555 Colliers 15,000 34 66 15,100
4-6 Mt Richmond Drive Brambles 100%100%5.5%5.8% 805 805 7,946 JLL 14,000 110 640 14,750
509 Mt Wellington Highway Fletcher Building Products 100%100%6.2%6.2% 985 979 8,745 Savills 15,750 73 177 16,000
511 Mt Wellington Highway Bremca Industries 100%100%5.8%6.0% 443 443 3,247 Colliers 7,400 (43) 243 7,600
515 Mt Wellington Highway Stryker 100%100%5.4%5.2% 259 259 1,708 CBRE 5,000 4 (204) 4,800
523 Mt Wellington Highway BGH Group 100%100%5.5%5.7% 220 220 1,677 Savills 3,850 – 150 4,000
1 Niall Burgess Road R L Button & Co 100%100%5.7%5.5% 230 218 1,742 CBRE 3,960 – 100 4,060
2-6 Niall Burgess Road McAlpine Hussmann 100%100%6.2%7.4% 813 914 6,874 CBRE 12,400 61 739 13,200
3-5 Niall Burgess Road Electrolux 100%100%5.9%6.0% 1,038 1,038 9,373 CBRE 17,275 30 345 17,650
7-9 Niall Burgess Road DHL Supply Chain 100%100%6.8%7.2% 2,108 2,069 23,565 Savills 28,900 959 1,141 31,000
10 Niall Burgess Road Outside Broadcasting 100%100%6.1%6.4% 258 258 1,725 CBRE 4,050 (5) 155 4,200
2 Pacific Rise Hewlett-Packard 100%100%10.7%10.6% 944 916 2,757 CBRE 8,675 11 164 8,850
5 Vestey Drive PPG Industries 100%100%5.6%5.7% 223 220 1,269 Savills 3,850 (3) 153 4,000
7 Vestey Drive True North 100%100%5.3%5.8% 516 481 4,598 Colliers 8,350 183 1,117 9,650
9 Vestey Drive Multispares 100%100%5.5%5.3% 212 193 1,600 Savills 3,650 (34) 234 3,850
11 Vestey Drive N & Z 100%100%5.5%8.1% 431 537 3,470 Savills 6,650 1,263 (113) 7,800
15a Vestey Drive Hills 100%100%6.2%6.8% 553 544 3,261 Savills 8,000 86 814 8,900
36 Vestey Drive Hose Supplies 100%100%5.3%5.9% 159 150 1,120 Colliers 2,550 178 272 3,000
100%100%6.2%6.5% 15,655 15,395 146,159 237,680 3,277 11,353 252,310
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017
13
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

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
2017201720162017201620172016201720172016201720172017
North Shore:
2-4 Argus Place Pharmapac 100%100%5.2%5.2% 419 409 3,560 Colliers 7,800 55 245 8,100
47 Arrenway Drive Device Technologies 100%100%5.5%5.9% 225 220 1,245 CBRE 3,725 7 378 4,110
51 Arrenway Drive Pacific Hygiene 100%100%5.1%5.1% 376 368 2,680 Colliers 7,200 (46) 246 7,400
229 Dairy Flat Highway Massey University 100%100%6.9%7.3% 1,857 1,794 6,719 JLL 24,700 (7) 2,307 27,000
15 Omega Street Wesfarmers 100%100%6.6%6.5% 567 551 3,498 Colliers 8,500 (16) 116 8,600
322 Rosedale Road Imake 100%100%6.2%6.5% 1,078 990 7,936 Savills 15,200 52 2,248 17,500
41 William Pickering Drive Innopak Global 100%100%5.7%5.7% 419 411 3,025 JLL 7,200 60 140 7,400
100%100%6.2%6.4% 4,941 4,743 28,663 74,325 105 5,680 80,110
Penrose:
4 Autumn Place Ryco Hydraulics 100%100%5.5%6.4% 148 148 1,210 JLL 2,300 160 250 2,710
6 Autumn Place MOTAT 100%100%6.1%6.3% 171 166 1,718 JLL 2,650 131 9 2,790
10 Autumn Place MOTAT 100%100%5.7%6.8% 653 613 7,646 JLL 9,000 906 1,594 11,500
122 Captain Springs Road New Zealand Crane Group 100%100%5.9%6.1% 496 496 7,431 Savills 8,100 (14) 314 8,400
8 Hugo Johnston Drive Argyle Schoolwear 100%100%6.0%6.3% 658 651 4,359 JLL 10,400 21 479 10,900
12 Hugo Johnston Drive W H Worrall 100%100%5.9%6.1% 337 329 2,639 JLL 5,400 (6) 366 5,760
16 Hugo Johnston Drive Newflor Industries 100%100%5.8%6.6% 373 362 2,619 Colliers 5,450 32 918 6,400
65 Hugo Johnston Drive Sistema Plastics n/a100%n/a7.4% n/a 896 n/a n/a 12,100 (12,100) – –
80 Hugo Johnston Drive Boxkraft 100%100%6.0%6.3% 457 457 3,872 JLL 7,300 272 28 7,600
102 Mays Road Go Logistics 100%100%6.4%6.3% 513 500 7,588 JLL 8,000 141 (141) 8,000
304 Neilson Street Fletcher Building Products 100%100%6.6%6.6% 720 703 13,438 Colliers 10,700 (24) 274 10,950
312 Neilson Street Transport Trailer Services 100%100%5.6%5.6% 344 308 3,862 CBRE 5,490 231 429 6,150
314 Neilson Street Wakefield Metals 100%100%5.7%6.0% 551 524 5,818 CBRE 8,740 313 607 9,660
12 Southpark Place Storepro Solutions 100%100%5.5%5.9% 490 490 5,477 CBRE 8,350 298 202 8,850
100%100%5.9%6.4% 5,911 6,643 67,677 103,980 (9,639) 5,329 99,670
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017
14
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

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
2017201720162017201620172016201720172016201720172017
Other Auckland:
58 Richard Pearse Drive, Mangere EBOS 100%100%6.0%6.5% 1,174 1,180 10,549 JLL 18,250 316 1,034 19,600
Carlaw Park Gateway Building, Parnell Quest 100%100%7.2%7.2% 2,545 2,523 2,369 JLL 35,000 13 487 35,500
Carlaw Park Office Complex, Parnell Jacobs 100%100%7.2%7.1% 4,484 4,367 11,149 JLL 61,800 107 193 62,100
170 Swanson Road, Swanson Transportation Auckland 100%100%5.3%5.8% 994 994 37,601 CBRE 17,110 211 1,399 18,720
100%100%6.8%6.9% 9,197 9,064 61,668 132,160 647 3,113 135,920
North Island (outside Auckland):
124 Hewletts Road, Mt Maunganui RMD Bulk Storage 100%100%6.3%6.8% 2,814 2,730 29,270 JLL 44,100 30 870 45,000
124a Hewletts Road, Mt Maunganui Ballance Agri-Nutrients 100%100%7.6%7.4% 1,013 973 10,497 JLL 13,200 (54) 234 13,380
124b Hewletts Road, Mt Maunganui Ballance Agri-Nutrients 100%100%6.1%6.1% 875 857 8,867 JLL 14,100 – 250 14,350
3 Hocking Street, Mt Maunganui Trayco Manufacturing 100%100%7.1%7.2% 120 120 1,211 JLL 1,675 1 4 1,680
558 Te Rapa Road, Hamilton DEC Manufacturing 100%100%6.8%7.0% 461 461 4,606 Savills 6,600 16 134 6,750
39 Edmundson Street, Napier TIL Logistics 100%n/a7.9%n/a 220 n/a 8,540 Colliers – 2,710 90 2,800
20 Constance Street, New Plymouth Aviagen 100%n/a11.4%n/a 388 n/a 1,366 Colliers – 3,273 127 3,400
330 Devon Street East, New Plymouth TIL Logistics 100%n/a7.5%n/a 112 n/a 482 Colliers – 1,456 44 1,500
28 Paraite Road, New Plymouth TIL Logistics 100%n/a7.7%n/a 1,195 n/a 15,636 Colliers – 14,976 624 15,600
2 Smart Road, New Plymouth New Zealand Post 100%n/a7.4%n/a 320 n/a 2,359 Colliers – 4,143 157 4,300
Shed 22, 23 Cable Street, Wellington Shed 22 Hospo 100%100%6.2%6.9% 831 792 2,809 Colliers 11,500 540 1,260 13,300
143 Hutt Park Road, Wellington EBOS 100%100%7.1%7.1% 1,200 1,169 11,372 Colliers 16,350 68 382 16,800
8 McCormack Place, Wellington Information Management Group 100%100%11.2%9.1% 848 848 6,405 Colliers 9,310 89 (1,799) 7,600
50 Parkside Road, Wellington
a
Waste Management 100%100%9.9%9.5% 335 335 7,104 Colliers 3,530 (3) (127) 3,400
48 Seaview Road, Wellington
a
Goughs Gough & Hamer 100%100%9.4%9.2% 573 564 8,996 Colliers 6,100 (15) (5) 6,080
100%100%7.2%7.0% 11,305 8,849 119,520 126,465 27,230 2,245 155,940
a
Excludes development land shown separately.
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017
15
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

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 2017 and 2016 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 Group’s management 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
20172016Increase in inputDecrease in input
Market capitalisation rate (%)
1
5.13 - 10.50 5.13 - 8.75 Decrease Increase
Market rental ($ per sqm)
2
26 - 420 28 - 368 Increase Decrease
Discount rate (%)
3
6.75 - 12.00 6.75 - 10.00 Decrease Increase
Rental growth rate (%)
4
1.61 - 2.93 1.61 - 2.80 Increase Decrease
Terminal capitalisation rate (%)
5
5.25 - 12.00 5.25 - 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, tenant 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.
17
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

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’S20172016
Gross rental receipts 72,698 70,817
Fixed rental income adjustments 603 102
Capitalised lease incentive adjustments (312) (196)
Management fee income 461 363
Total rental and management fee income 73,450 71,086
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 Consolidated 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’S20172016
Within one year 76,061 69,017
After one year but not more than five years 218,152 193,373
More than five years 129,840 86,557
Total 424,053 348,947
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’S20172016
Service charge expenses (8,502) (7,762)
Service charge income recovered from tenants 8,502 7,762
Bad and doubtful debts recovery 79 175
Other non-recoverable property costs (2,436) (1,821)
Total non-recoverable property costs (2,357) (1,646)
18
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

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’S20172016
Syndicated bank facility drawn down - non-current 272,700 333,700
Fixed rate bonds - non-current 100,000 –
Unamortised borrowings establishment costs (2,065) (776)
Net borrowings 370,635 332,924
Weighted average interest rate for drawn debt (inclusive of current interest rate swaps, margins and line fees)4.96%5.24%
Weighted average term to maturity (years) 3.70 3.84
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) Syndicated bank 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’S20172016
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
Syndicated bank facility drawn down - non-current 272,700 333,700
Undrawn facility available 102,300 41,300
Total facilities available 375,000 375,000
On 31 March 2017, the Group entered into a $40 million 16 month institutional credit facility provided by ANZ. The facility was cancelled on 29 November
2017 and never drawn.
On 3 October 2017, the Group entered into a $70 million 16 month institutional credit facility provided by ANZ. The facility was repaid and cancelled on
7 November 2017.
(iii) Fixed rate bonds
On 28 November 2017, the Group issued $100 million of fixed rate bonds, bearing a fixed interest rate of 4.59% per annum. The bonds are quoted on
the NZX Debt Market and mature on 28 November 2024. Interest is payable quarterly in February, May, August and November in equal instalments.
As at 31 December 2017, the fair value of the fixed-rate bonds is $102,333,000 based on their listed market prices at balance date. The fair value is
classified as Level 1 in the fair value hierarchy
(iv) Security
The syndicated bank facility and fixed rate bonds are 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 $950,000,000 (31 December 2016: $750,000,000). In addition to this, the syndicated
bank facility agreement and the fixed rate bond terms also contain a negative pledge. The Company and PFI No. 1 are guarantors to the facility and fixed
rate bonds. As at 31 December 2017, investment properties totalling $1,175,705,000 (31 December 2016: $1,059,875,000) were mortgaged as security
for the Group’s borrowings.
19
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

3.2. Derivative financial instruments
(i) Fair values
ALL VALUES IN $000’S20172016
Non-current assets 272 384
Current liabilities (372) (242)
Non-current liabilities (11,095) (10,108)
Total (11,195) (9,966)
(ii) Notional values, maturities and interest rates
20172016
Notional value of interest rate swaps - fixed rate payer - start dates commenced ($000’S) 220,000 243,000
Notional value of interest rate swaps - fixed rate receiver
2
- start dates commenced ($000’S) 100,000 –
Notional value of interest rate swaps - fixed rate payer - forward starting ($000’S) 155,000 70,000
Total ($000’S) 475,000 313,000
Percentage of borrowings fixed (%)59%73%
Fixed rate payer swaps:
Average period to expiry - start dates commenced (years) 2.62 3.00
Average period to expiry - forward starting (years from commencement) 3.65 2.86
Average (years) 3.04 2.97
Fixed rate payer swaps:
Average interest rate
1
- start dates commenced (%)4.37%4.53%
Average interest rate
1
- forward starting (% during effective period)3.55%3.54%
Average (%)4.03%4.31%
1 Excluding margin and fees.
2 The Group has $100 million fixed rate receiver swaps for the duration of the $100 million fixed interest bond, the effect of the fixed rate receiver swaps is to convert the $100 million bond
to floating interest rates.
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 (2016: 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
2017 of between 1.88% (31 December 2016: 2.00%) for the 90 day BKBM and 3.14% (31 December 2016: 3.49%) for the 10 year swap rate. There were
no changes to these valuation techniques during the period.
3. FUNDING (CONTINUED)
20
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

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.
Prior to the internalisation of management (for further details refer to Note 5) this could have 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, termination of management agreement cost and associated tax benefit and other one off items.
Subsequent to year-end, the Board has resolved to change its dividend policy. The new policy of the Group is to distribute between 80% to 90% of
Funds From Operations (FFO) and 95% to 100% of Adjusted Funds From Operations (AFFO). FFO and AFFO are non-GAAP financial information and
are common investor metrics. They are calculated in accordance with the guidelines issued by the Property Council of Australia. To provide sufficient
flexibility for dividends to be maintained or normalised despite variations in FFO and AFFO, the payout ratios may be decreased or increased from time
to time. In fixing a dividend for any period, consideration will be given to, amongst other things, the Group’s current and forecast financial performance
and position, general business and financial conditions, and the solvency requirements of the Companies Act. Dividends are paid quarterly, the payment
of dividends is not guaranteed by the Group, and the Group’s dividend policy may change from time to time.
ALL VALUES IN $000’S UNLESS NOTED20172016
Total comprehensive income for the year attributable to the shareholders of the Company 51,684 123,412
Adjusted for:
Fair value gains on investment properties (43,595) (88,214)
Material damage insurance income (504) –
Gain on disposal of investment properties (1,949) (302)
Tax on depreciation claw-back on disposals of investment properties 34 132
Fair value loss / (gain) on derivative financial instruments 1,230 (433)
Deferred taxation (2,142) 136
Movement in fixed rent reviews (490) (607)
Termination of management agreement 42,869 –
Current taxation without deductibility of termination of management agreement (10,010) –
Other
1
(12) (12)
Distributable profit 37,115 34,112
Weighted average number of ordinary shares (shares) 459,600,237 450,078,636
Distributable profit per share (cents) 8.08 7.58
Dividends paid relating to the year reported
2
35,536 33,141
Pay-out ratio (%)96%97%
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 2017 totalling $24,813,000 as per the Consolidated Statement of Changes in Equity, plus the fourth quarter dividend for 2017 due to
be paid on 7 March 2018 of $10,723,000.
21
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

4.2. Earnings per share
20172016
Total comprehensive income for the year attributable to the shareholders of the Company ($000) 51,684 123,412
Weighted average number of ordinary shares (shares) 459,600,237 450,078,636
Basic and diluted earnings per share (cents) 11.25 27.42
4.3. Net tangible assets per share
20172016
Net assets ($000) 842,943 756,138
Less: Goodwill ($000) (note 6.5) (29,086) (29,086)
Net tangible assets ($000) 813,857 727,052
Closing shares on issue (shares) 498,723,330 452,458,592
Net tangible assets per share (cents) 163 161
5. INTERNALISATION OF MANAGEMENT
On 22 June 2017, the Company’s shareholders approved the internalisation of the management of the Company. As a result, effective from 30 June 2017,
the Company terminated the management and administrative services contract that was undertaken by PFIM Limited (“PFIM”). PFIM had subcontracted
the property and administrative function to McDougall Reidy & Co Limited (“MRCO”), this management and administrative services contract was
also terminated.
The Company paid $41.9 million to PFIM for the termination of the management and administrative services contract. In addition the Company acquired
certain assets of PFIM and MRCO (comprising $0.1 million, for which a payment of $0.1 million was paid by the Company). Accordingly, the net consideration
for the termination of the management and administrative services contract and the purchase of certain assets was $42.0 million. The previous employees
of MRCO are now directly employed by the Company with the exception of three senior executives who have entered into independent service contracts
with the Company.
Judgement was involved in determining whether these transactions met the definition of a business combination in accordance with NZ IFRS 3 Business
Combinations. It has been determined that this transaction was a business combination. A business consists of inputs and processes applied to those
inputs that have the ability to create outputs. In making this assessment, the key consideration was whether processes were being acquired. The inputs
included the fixed assets and the employees of PFIM and MRCO. The conclusion is that processes were being acquired in the form of the knowledge,
skills and experience of the workforce in carrying out the property management processes.
The cancellation of the management arrangements terminates the pre-existing relationships between the Company and PFIM. $41.9 million of
the consideration transferred has been attributed to the extinguishment of the pre-existing relationships and has been included in the Consolidated
Statement of Comprehensive Income. These arrangements did not contain any substantive settlement provisions that were reasonably available to
the Company. It was also determined that there were no favourable or unfavourable terms in the arrangements when compared with terms for current
market transactions for similar arrangements. Accordingly, no settlement gain or loss arose from the settlement of the pre-existing relationships.
Costs of $1.0 million relating to the internalisation are also recognised in the Consolidated Statement of Comprehensive Income for the period.
Assets acquired
The assets acquired at the date of the acquisition were as follows:
ALL VALUES IN $000’S UNLESS NOTED2017
Property, plant & equipment 106
Total assets acquired 106
No goodwill arose as a result of this transaction.
4. INVESTOR RETURNS AND INVESTMENT METRICS (CONTINUED)
22
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

6. 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.
6.1. Administrative expenses
ALL VALUES IN $000’S20172016
Auditors remuneration:
Audit of annual financial statements (113) (97)
Review of interim financial statements (28) (28)
Review of management fee calculations (2) (4)
Voting procedures over the annual shareholders’ meeting (3) (3)
Benchmarking of director remuneration – (9)
Employee and independent contractor benefits expense (1,310) –
Directors’ fees (360) (336)
Office expenses(253)–
Rent(55)–
Depreciation (26) –
Other expenses (741) (753)
Total administrative expenses (2,891) (1,230)
23
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

6.2. Taxation
(i) Reconciliation of accounting profit before income tax to income tax benefit / (expense)
ALL VALUES IN $000’S20172016
Profit before income tax 49,542 132,083
Prima facie income tax calculated at 28% (13,872) (36,983)
Adjusted for:
Non-tax deductible revenue and expenses 115 (14)
Fair value gain on investment properties 12,207 24,700
Gain on disposal of investment properties 546 85
Depreciation 2,391 2,505
Disposal of depreciable assets (34) (122)
Deductible capital expenditure 740 910
Lease incentives, fees and fixed rental income 213 (51)
Derivative financial instruments (333) 133
Impairment allowance 22 298
Current tax prior period adjustment – 4
Current year tax losses carried forward (1,995) –
Current taxation expense – (8,535)
Current year tax losses carried forward 1,995 –
Depreciation 49 244
Lease incentives, fees and fixed rental income (213) 51
Derivative financial instruments 333 (133)
Impairment allowance (22) (298)
Deferred taxation benefit 2,142 (136)
Total taxation reported in Consolidated Statement of Comprehensive Income 2,142 (8,671)
Prior to the internalisation of management on 30 June 2017, the Group received a binding tax ruling from Inland Revenue on 22 May 2017 which
confirmed that the payment for the termination of the management agreement is deductible for tax purposes. This has resulted in a current year tax
losses to be carried forward. The Group expects to utilise these tax losses during 2018.
(ii) Deferred tax
20152016201620172017
ALL VALUES IN $000’SAs at
Recognised
in profitAs at
Recognised
in profitAs at
Deferred tax assets
Losses carried forward – – – (1,995) (1,995)
Derivative financial instruments (2,942) 133 (2,809) (333) (3,142)
Impairment allowance (362) 298 (64) 22 (42)
Gross deferred tax assets (3,304) 431 (2,873) (2,306) (5,179)
Deferred tax liabilities
Investment properties 14,194 (295) 13,899 164 14,063
Gross deferred tax liabilities 14,194 (295) 13,899 164 14,063
Net deferred tax liability 10,890 136 11,026 (2,142) 8,884
6. OTHER (CONTINUED)
24
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

(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’S20172016
Opening balance 2,257 1,507
Taxation paid / payable 6 8,435
Imputation credits attached to dividends paid (2,225) (7,685)
Closing balance available to shareholders for use in subsequent periods 38 2,257
Due to the current year tax loss, the Group has not generated imputation credits during the current financial year through the payment of taxation.
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.
6. OTHER (CONTINUED)
6.2. Taxation (continued)
25
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

6.3. Accounts receivable, prepayments and other assets
ALL VALUES IN $000’S20172016
Accounts receivable 1,163 1,082
Property sale proceeds to be settled – 7,628
Provision for doubtful debts (67) –
Prepayments and other assets 199 319
Total accounts receivable, prepayments and other assets 1,295 9,029
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.
6.4. Accounts payable, accruals and other liabilities
ALL VALUES IN $000’S20172016
Accounts payable 2,038 715
Accrued interest expense and bank fees 2,230 2,417
Accruals and other liabilities in respect of investment properties 1,381 2,335
Accruals and other liabilities 2,612 3,202
Total accounts payable, accruals and other liabilities 8,261 8,669
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.
6.5. Goodwill
ALL VALUES IN $000’S20172016
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 (2016: 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 (15.9%, as determined by a third party) and deducting costs of disposal.
As at 31 December 2017 the estimated fair value less costs of disposal of the Property for Industry Limited CGU exceeded the carrying value
(2016: nil impairment).
6. OTHER (CONTINUED)
26
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

6.6. 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’S20172016
Financial Assets
Loans and receivables:
Cash at bank 605 –
Accounts receivable and other assets 1,096 8,710
Total - Loans and receivables 1,701 8,710
Fair value through profit or loss - held for trading:
Derivative financial instruments 272 384
Total - Fair value through profit or loss 272 384
Total Financial Assets 1,973 9,094
Financial Liabilities
Liabilities at amortised cost:
Bank overdraft– 113
Accounts payable, accruals and other liabilities 8,261 8,669
Borrowings 370,635 332,924
Total - Liabilities at amortised cost 378,896 341,706
Fair value through profit or loss - held for trading:
Derivative financial instruments 11,467 10,350
Total - Fair value through profit or loss 11,467 10,350
Total Financial Liabilities 390,363 352,056
6.7. 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 fixed rate payer 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.
20172016
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 tax692 (692) 2,630 (2,630)
Impact on equity498 (498) 1,894 (1,894)
6. OTHER (CONTINUED)
27
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

(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 6.6 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 3.7 years (2016: 3.8 years), with all borrowings due later than one year
(2016: 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 2017 and 31 December 2016.
ALL VALUES IN $000’S
Carrying
amount
Contractual cash flows
0 - 1 year 1 - 2 years 2 - 5 years > 5 years Total
Financial liabilities
Accounts payable, accruals and other liabilities 8,261 8,261 – – – 8,261
Derivative financial instruments
1
11,195 4,265 3,124 4,424 1,117 12,930
Borrowings 370,635 12,639 12,639 289,800 106,887 421,965
Total as at 31 December 2017 390,091 25,165 15,763 294,224 108,004 443,156
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
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.
6. OTHER (CONTINUED)
6.7. Financial risk management (continued)
28
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

6.8. Related party transactions
The Company internalised its management on 30 June 2017 and paid $41.9 million to PFIM. For further details refer to Note 5.
Gregory Reidy was a Director of both PFIM and the Company, accordingly this transaction and the management fees detailed below were related
party transactions.
As at 31 December 2016, $458,000 in relation to management fees was owing to PFIM and included in accounts payable, accruals and other liabilities.
(i) Management fees
From 30 June 2017 no further base management fees or performance fees are payable. Instead the costs of managing the Company are incurred directly.
Prior to the internalisation, PFIM was 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.
(a) Base management fees
The base management fee was payable monthly and was 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 $2,919,000 (2016: $5,482,000) from PFIM, for the provision of management and
administrative services.
(b) Performance fees
The performance fee was calculated and payable on a quarterly basis. The performance fee was 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 exceeded 3.75% in a quarter, no
payment was due for the actual amount of the increase above 3.75% but the amount of the increase above 3.75% was carried forward and added to the
calculation of shareholder returns in the next seven quarters. However, if shareholder returns were less than 2.5% in a quarter, the deficit was carried
forward and subtracted from the calculation of shareholder returns in the next seven quarters.
During the year, the Group incurred no performance fees from PFIM (2016: $1,777,000).
(ii) Key management personnel
ALL VALUES IN $000’S20172016
Directors’ fees360336
Short-term independent contractors benefits 805 –
Key management personnel1,165336
Please note that, as PFI internalised on 30 June 2017, the amounts above represent a half-year of remuneration for the independent contractors.
(iii) Other related party transactions
During the year ended 31 December 2016, the Group incurred $12,816,440 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.
On 30 June 2017, the Group entered into a lease agreement with McDougall Reidy & Co Limited (MRCO) to lease the head office for the Group. Gregory
Reidy, a senior executive who became an independent contractor with the Company on 30 June 2017 is also a Director of MRCO. During the year, rental
income of $39,000 was paid to MRCO and is included within other expenses. The head office was sold to a unrelated party on 6 November 2017.
On 30 June 2017, the Group entered into a licence agreement with MRCO enabling MRCO to operate its business from the Group’s premises, access the
Group’s IT and support systems and employees for its business. During the year, licence income of $50,000 was received from MRCO.
On 1 July 2017, Susan Peterson became a Director of ASB Bank Limited (ASB), a 100% subsidiary of CBA. During the year, the Group incurred $2,120,000
of interest expense and bank fees and received $48,000 of interest income from CBA during the period that Susan Peterson was a Director of both ASB
and the Company. As at 31 December 2017: $499,000 was owing to CBA and included in accounts payable, accruals and other liabilities and $48,000
was owing from CBA and included in accounts receivable.
No related party debts have been written off or forgiven during the year (2016: nil).
During the year, fees paid to Directors of the Group were $360,000 (2016: $336,000).
As at 31 December 2017, Directors of the Company held 5,809,115 (31 December 2016: 8,007,684) shares beneficially in the Company and 408,741
(31 December 2016: 371,583) shares non-beneficially in the Company.
6. OTHER (CONTINUED)
29
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

6.9. 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.
6.10. Capital commitments
As at 31 December 2017, the Group had capital commitments totalling $7,666,000 (31 December 2016: $3,638,000) relating to work on investment
properties.
6.11. Subsequent events
On 12 February 2018, the Directors of the Company approved the payment of a net dividend of $10,723,000 (2.1500 cents per share) to be paid
on 7 March 2018. The gross dividend (2.1500 cents per share) carries no imputation credits. 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 2017
in respect of this dividend.
On 12 February 2018, David Thomson was appointed to the Board of Directors of the Company and PFI No. 1 as an Independent Director.
6. OTHER (CONTINUED)
30
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE YEAR ENDED 31 DECEMBER 2017

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 2017;
• 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;
• the reconciliation of profit after income tax to net cash flows from operating activities; 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 2017, 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 comprising the review of management fee calculations
and voting procedures over the annual shareholders’ meeting. The provision of these other services has not impaired our independence as auditor of
the Group.
Our audit approach
Overview
Materiality
Audit scope
Key audit
matters
An audit is designed to obtain reasonable assurance whether the consolidated financial statements are free from material
misstatement.
Overall group materiality: $2.5 million.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above
$0.25 million as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
We have three key audit matters:
• Valuation of Investment Properties;
• Goodwill impairment assessment; and
• Internalisation of management.
31
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

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
$2.5 million.
How we determined it
Approximately 5% of profit before tax excluding valuation movements relating to investment properties,
interest rate derivatives and the termination of management agreement expense.
Rationale for the materiality
benchmark applied
We applied this benchmark because, in our view, it is more reflective of 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 judgement, were of most significance in our audit of the consolidated financial statements
of the current year. We have three key audit matters: valuation of investment properties; goodwill impairment assessment; and internalisation of
management. 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
As disclosed in note 2.1 of the consolidated financial statements,
the Group’s Investment Properties at $1,211 million represent the
majority of the assets held by the Group as at 31 December 2017.
The valuation of the Group’s property portfolio is inherently
subjective due to, amongst other factors, the individual nature
of each property, location and the expected future rental income
for each respective 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 markets 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 information such as the current tenancy
agreements and rental income earned by the asset. They then
External valuations
We read the valuation reports for all properties and discussed the 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 2017.
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.
We carried out procedures, on a sample basis to test whether property-specific
information supplied to the Valuers by the Group reflected the underlying property
records held by the Group. For the items tested, the information was consistent.
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)
32
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

Key audit matterHow our audit addressed the key audit matter
apply assumptions in relation to capitalisation rates and 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 subjectivity involved in determining the appropriate valuations
for individual properties with the existence of alternative assumptions and
valuation methods, we determined a range of values that were considered
reasonable for an individual property to evaluate the independent property
valuations used by management. If we find an error in a property valuation or
determine that the valuation is outside the reasonable range, we would evaluate
the error or difference against overall materiality to determine if there is a material
misstatement in the consolidated financial statements.
The valuations adopted by the Group were all within an acceptable range. We also
considered whether or not there was bias in determining individual valuations and
found no evidence of bias.
Goodwill impairment assessment
As disclosed in note 6.5 of the consolidated financial statements,
the goodwill balance of $29 million was recognised when the
Company merged with Direct Property Fund Limited 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 2017.
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. The control premium will need to fall by more than 80%
before there is an impairment issue.
Internalisation of management
As disclosed in note 5 of the consolidated financial statements,
the Company paid $41.9 million to PFIM Limited to terminate
the management and administrative services contract with
the Company.
Management have accounted for this transaction as a business
combination in accordance with accounting standards.
This transaction is considered to be a significant transaction.
We have evaluated management’s accounting treatment for the internalisation
and performed the following procedures:
• Considered the requirements under accounting standards to that adopted
by management in respect of the internalisation of management;
• Assessed the accounting treatment and the related disclosures in the
consolidated financial statements of the internalisation of management
through examining the internalisation agreement supporting the underlying
transaction; and
• In respect of the payment to cancel the management arrangement, this has
been attributed to the extinguishment of the pre-existing relationship and
has been expensed in the consolidated statement of comprehensive income.
The accounting for the internalisation transaction has been appropriately reflected
in the consolidated financial statements.
Information other than the consolidated 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 consolidated 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.
Independent auditor’s report (continued)
33
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

Independent auditor’s report (continued)
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 consolidated financial statements is located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
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 Samuel Shuttleworth.
For and on behalf of:
Chartered Accountants Auckland
12 February 2018
34
PROPERTY FOR INDUSTRY LIMITED GROUP FINANCIAL STATEMENTS 2017

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ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount 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:
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 965712022018
Enter N/A if not
applicable
In dollars and cents
Retained earnings
$0.000000
$0.021500
$NZ$0.000000
$0.021500
Date Payable
7 March, 2018
$0.000000
26 February, 20187 March, 2018

---

HIGHLIGHTS
4
▪Significant acquisition activity: $84.3 million of property acquired, improving portfolio metrics
and providing significant medium to long-term development potential
▪Transition of the Penrose portfolio: approximately $14 million of shareholder value created
equating to a property level internal rate of return of approximately 26%
▪Strong balance sheet: $70 million rights offer, $100 million of senior secured fixed rate seven-
year bonds, gearing of 30.8%
▪Dividend policy change and increased dividend for FY18: guidance of full year cash
dividends of approximately 7.55 cents, approximately 95% to 100% of Adjusted Funds From
Operations
1
▪Governance and management changes: David Thomson appointed to the Board as an
Independent Director on 12 February 2018, internalisation of management on 30 June 2017
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
1.Adjusted Funds From Operations is non-GAAP financial information and a common investor metric, which has been calculated in accordance with the guidelines issued by the Property Council
of Australia. Please refer to slide 24 for further details.

PORTFOLIO SNAPSHOT
6
31 December 201731 December 2016
Book value
$1,210.8m$1,083.3m
Number ofproperties
9283
Number of tenants148143
Contract rent$79.6m$72.5m
Occupancy99.9%99.6%
Weighted average lease term
5.33 years4.79years
Auckland property
82.4%85.3%
Industrialproperty
86.4%85.5%
▪PFI’s portfolio is diversified across 92 properties and 148 tenants, with 99.9% occupancy and a
weighted average lease term of 5.33 years, weighted towards Auckland industrial property
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING

7
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
HISTORICAL OPERATIONAL PERFORMANCE
▪Since 2008, PFI has achieved a year end average occupancy of 98.6% and WALT of 4.81 years
Jean -Tuesday

PORTFOLIO PERFORMANCE
8
▪Valuations:
▪$43.6 million or 3.7% portfolio revaluation uplift to $1,210.8 million
▪Passing yield firmed from 6.69% to 6.57%
▪Leasing:
▪27 leases agreed over ~97,000 sqm of space for an average term of 5.5 years
▪Lease renewals accounted for approximately half of the contract rent secured
▪73 rent reviews, average annual uplift of ~2.5% on ~$38.6 million of contract rent
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
TenantAddressTermArea% Rent Roll
Ballance Agri-Nutrient124a HewlettsRoad, Mt Maunganui2.1 years11,765 sqm1.3%
Massey University229 Dairy Flat Highway, North Shore8.0 years4,429 sqm1.2%
Hewlett-Packard2 Pacific Rise, Mt Wellington1.7 years2,799 sqm1.2%
Shed 22 HospoShed 22, 23 Cable Street, Wellington15.0 years2,816 sqm1.0%
Mainfreight Air & Ocean212 Cavendish Drive, Manukau6.0 years9,225 sqm0.9%
MOTAT10 Autumn Place, Penrose9.0 years7,646 sqm0.8%
21 other transactions, all forleases with contract rent of <$0.65m 5.2years58,170sqm7.8%
27 leasing transactions
Various
5.5 years96,850 sqm14.2%

LEASE EVENTS
9
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
Tenant % RentRoll
Carlaw Park Office ComplexNestle1.8%
8 McCormack PlaceInformation Management1.1%
10c StonedonDriveChemical Freight Services1.0%
CarlawPark Office ComplexArgosy0.8%
41 William Pickering DriveSo-Pac Marine0.1%
OtherVarious2.6%
Total7.4%
▪Near term leasing outlook remains positive: just
7.4% of contract rent is due to expire during 2018
▪Expiries at Carlaw Park, Parnell represent 3.2%,
leasing of that space is a key priority in 2018
▪~68% of portfolio subject to some form of lease
event during 2018

PENROSE PORTFOLIO
10
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
▪Portfolio of five Penrose
properties purchased in
August 2015
▪All five properties have
been transitioned: four
from former tenant
Sistema to new tenants,
one sold for a gain on
sale of $1.9 million
▪~$14 million of
shareholder value has
been created
▪Property level internal
rate of return of ~26%

11
ACQUISITIONS
▪During 2017 PFI secured ten quality properties for a total
acquisition cost of $84.3 million
▪The acquisitions:
▪Established PFI’s presencein additional centres across
New Zealand, whilst maintaining a high weighting towards
the attractive Auckland property market
▪Improved a number of PFI’s portfolio metrics
▪Were purchased with attractive lease terms, with a high
proportion of the assets benefiting from fixed rent reviews,
providing future rental growth
▪Have low site coverage providing for significant medium to
long-term development potential
▪Established a strategic partnership with a quality
nationwide tenant, the TIL Logistics Group
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING

DIVESTMENTS AND DEVELOPMENT
12
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
▪65 Hugo Johnston Drive, Penrose sold during H1 2017 to an owner occupier for $14.3 million, with a $1.9
million gain on sale representing a 17.8% premium above the December 2016 book value
▪~$32.3million of divestments over the last three years
▪Tenant commitment continues to be sought for the Company’s new 2,500 sqm warehouse to be built on
surplus land at 212 Cavendish Drive, Manukau
▪~$29.5 million of developments over the last three years

MARKET UPDATE
14
▪ANZ retain a broadly positive medium-term expectation:
▪Forecast annual growth of “...up towards 3% by the end of 2018, and averaging 2½-3% over the
next couple of years overall...”
▪Equates to the average rate of growth experienced since 2010
▪CBRE December 2017 Auckland Market Outlook for industrial property:
▪“... structural economic changes [are] supporting demand and the supply outlook [is] remaining
fairly well balanced relative to our absorption forecasts.”
▪Secondary industrial “... continues as the market with the best return outlook, largely driven by
favourable supply and demand conditions underpinning relatively good rent growth”
▪Prime industrial ranks seventh out of 12 property classes in their returns forecasts
▪Secondary industrial forecast five year returns total 11.9% per annum (income 6.5%, capital
5.4%)
▪Prime industrial forecast five year returns total 8.8% per annum (income 5.6%, capital 3.2%)
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING

STRATEGY
15
▪PFI has always invested in quality industrial property in prime locations, in order to deliver attractive returns
with a low level of volatility: our average annual return to shareholders since inception has been ~9.7%
1
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
▪We aim to drive shareholder returns by:
▪Active asset management
▪Development
▪Divestments
▪Acquisitions
▪In 2017:
▪Internalisation and retention of existing team
ensured continuity of strategy
▪Capital management initiatives ensured that the
Company maintained a strong balance sheet
▪PFI has ended the year with significant capacity to
opportunistically pursue both core and value-add
industrial acquisitions
1.Cash dividends plus change in share price, assuming dividends are invested. Source: DataStream.

▪Equity: ~$70 million raised via October/November 2017 one-for-ten rights offer, high level of take-up by
existing shareholders: almost 80% of the new shares available
▪Debt: inaugural bond offer in November 2017, $100 million of senior secured fixed rate seven-year bonds, rate
of 4.59% per annum equating to a margin of 1.65%
EQUITY AND DEBT INITIATIVES
17
Debt facility maturity profile ($m)
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING

FUNDING, COVENANTS, INTEREST RATES
18
Dec 2017Dec 2016
Funding
Syndicated Bank Facility drawn (excluding overdraft)
$272.7m$333.7m
Syndicated Bank Facilities limit
$375.0m$375.0m
Syndicated Bank Facilities headroom
$102.3m$41.3m
Fixed Rate Bonds
$100.0m-
Funding term (average)
3.7 years3.8 years
Syndicated Bank Facilitiesbanks
ANZ, BNZ, CBA, WestpacANZ, BNZ, CBA, Westpac
Covenants
Gearing
30.8%30.1%
Interest cover ratio
3.7 times3.4 times
Interest rates
Weightedaverage cost of debt (including margin and fees)
4.96%5.24%
Fixed rate payer interestrate hedging (excl. forward starting hedging, $m / rate / duration)
$220m/ 4.37% / 2.6 years$243m/ 4.53% / 3.0 years
Fixed rate payer interestrate hedging (forward starting hedging, $m / rate / duration)
$155m / 3.55% / 3.0 years$70m / 3.54% / 2.9 years
▪Bond helps to diversify PFI’s borrowings and to increase the average term to expiry of all facilities to 3.7 years as
at the end of 2017
▪Gearing of 30.8% and interest cover ratio of 3.7 times well within bank covenants
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING

FIXED RATE PAYER HEDGING
19
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
▪Weighted average cost of debt decreased from 5.24% at end FY16 to 4.96% at end FY17
▪Cover profile provides for an average of ~59% of debt to be hedged at an average fixed rate of ~4.28% in FY18

OPERATING REVENUE
21
▪Operating revenues of
$73.5 million up $2.4 million
or 3.4%
▪Increases due to positive
leasing activity ($1.9
million), acquisitions ($1.7
million) and completed
developments ($0.8 million),
▪Decreases due to increased
intra-period vacancy ($1.2
million) and disposals ($0.8
million)
▪Transition of the portfolio of
five Penrose properties
from prior tenant Sistema to
new tenants contributed
~$0.8 million to the increase
in vacancy (refer slide 10)
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING

COMPREHENSIVE INCOME
22
▪Operating revenuesup $2.4
million or 3.4%, refer slide
21: operating revenue
▪Operating expenses down
$2.0 million or 7.3%, due to
management fees (down
$4.3 million) partially offset
by $1.6 million increase in
administrative expenses
incurred from July to
December 2017 in lieu of
management fees
▪Higher non-recoverable
property costs ($0.7 million)
due to increased vacancy
and asbestos testing
programme
▪Excl. the impact of the
internalisation payment, net
of tax, profit after tax of
$82.6 million or 17.96 cents
per share (refer Appendix 1)
For the year ended (audited, $000)Dec 17Dec 16Change
Total operating revenue73,52871,1082,420
Non-recoverable property costs(2,357)(1,646)(711)
Interest expense and bank fees(17,768)(17,839)71
Management fees(2,919)(7,259)4,340
Other expenses(2,891)(1,230)(1,661)
Total operating expenses(25,935)(27,974)(2,039)
Total operating earnings47,59343,1344,459
Fair value gain on investment properties43,59588,214(44,619)
Gain on disposal of investment properties1,9493021,647
Material damage insuranceincome504-504
Fair value (loss) / gain on derivative financial instruments(1,230)433(1,663)
Termination of management agreement(42,869)-(42,869)
Total non-operating income and expenses1,94988,949(87,000)
Profit before taxation49,542132,083(82,541)
Current taxation-(8,535)8,535
Deferred taxation2,142(136)2,278
Total income tax benefit / (expense)2,142(8,671)10,813
Profit after income tax51,684123,412(71,728)
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING

DISTRIBUTABLE PROFIT (CENTS PER SHARE, CPS)
23
▪Distributable profit per share
up 0.50 cps or 6.6%
▪Internalisation cost savings
in H2 2017:
▪Estimated at ~$2.7 million
(0.59 cps) before interest
and tax, or $1.4 million
(0.30 cps) after interest
and tax
▪Represent a contribution
of 7.1% to the H2 2017
increase in distributable
profit, ahead of the 6%
estimated by Northington
Partners in their
Independent Appraisal
Report
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
1.Distributable profit is non-GAAP financial information used by the PFI Board to assist in determining dividends to shareholders.Refer: Note 4.1 of Financial Statements.

FFO, AFFO AND DIVIDENDS
24
(Unaudited, $000, unless noted)Dec 2017Dec 2016
Profit and total comprehensive income after income tax attributable to the shareholders of the
Company
51,684123,412
Adjusted for:
Fair value gain on investment properties(43,595)(88,214)
Material damage insurance income(504)-
Gainon disposal of investment properties
(1,949)(302)
Fair value loss/(gain) on derivative financial instruments
1,230(433)
Amortisation of tenant incentives2,2871,973
Straight lining of fixed rental increases
(490)(607)
Deferred taxation
(2,142)136
Termination of management agreement
42,869-
Current taxation without deductibility of termination of management agreement
(10,010)-
Funds from operations (FFO)
39,38035,965
FFO per share (cents)
8.577.99
FFO dividend pay-out ratio
87%92%
Maintenance capex
(2,641)(2,962)
Incentives and leasing fees given for the period
(2,316)(1,729)
Other
(12)(12)
Adjusted funds from operations (AFFO)
34,41131,262
AFFO per share (cents)
7.496.95
AFFO dividend pay-out ratio
99%106%
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
▪Funds From Operations
(FFO) earnings up 0.58 cps,
Adjusted Funds From
Operations (AFFO),
earnings up 0.54 cps
▪FY17 cash dividends total
7.45 cps
▪Change in dividend policy:
from FY18, dividend policy
will be based on 80-90% of
FFO and 95-100% of AFFO
▪New policy means that
dividend payments will
reflect cashflow from
sustainable rental activity
alone
▪FY18 cash dividend
guidance: 7.55 cps,
representing 95% to 100%
of AFFO, assumes ~97%
occupancy
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
25
▪Portfolio value of ~ $1.2
billion
▪Significant acquisition
activity: $84.3 million of
property acquired,
improving portfolio metrics
and providing significant
medium to long-term
development potential
▪Annual increase from
independent valuations of
$43.6 million or 3.7%
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING

NET TANGIBLE ASSETS (CENTS PER SHARE, CPS)
26
▪Net tangible assets (NTA)
per increased by 2.5 cps or
1.6% to 163.2 cps
▪Excluding the impact of the
internalisation payment, net
of tax, PFI’s NTA would
have increased by 8.7 cps
or 5.4% to 169.4 cents
(refer Appendix 1)
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
Jean

27
FIVE YEAR FINANCIAL SUMMARY
($m, unless noted)
Dec-13Dec-14Dec-15Dec-16Dec-17
Operating revenue
48.163.866.971.173.5
Total operating earnings
26.936.936.643.147.6
Total comprehensive income after tax
40.559.972.8123.482.6
1
Total assets
877.0906.91,027.21,121.81,242.2
Total liabilities
341.8341.9369.2365.7399.2
Totalequity
535.2565.0658.0756.1842.9
Banking covenants:
Company gearing (threshold 50%)
37.4%35.8%33.3%30.1%30.8%
Interest cover ratio
3.2x3.0x2.9x3.4x3.7x
▪The last five years has seen strong growth in rents and valueswhilst keeping gearing at low levels
and maintaining a high ratio of interest cover
1.Refer: Appendix 1: Total comprehensive income excluding internalisation
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING

29
▪PFI’s strategy is to invest in quality industrial property in New Zealand’s prime locations and the
Company aims to deliver strong, stable shareholder returns
▪2017 highlights:
▪Significant acquisition activity
▪Transition of the Penrose portfolio
▪Strong balance sheet
▪Dividend policy change and increased dividend for FY18
▪Governance and management changes
▪Questions?
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
REVIEW & QUESTIONS

APPENDIX1:EPS & NTA EXCL. INTERNALISATION
31
Adjusted earnings per share (unaudited, $000)Dec 2017Dec 2016
Total comprehensive income attributable to the shareholders of the Company
51,684123,412
Adjusted for internalisation:
Termination of management agreement
42,869-
Tax benefit of termination of management agreement
(12,003)-
Adjusted total comprehensive income attributable to the shareholders of the Company
82,550123,412
Weighted average number of ordinary shares (shares)
459,600,237450,078,636
Adjusted basic and diluted earnings per share (cents)
17.9627.42
PROPERTYFORINDUSTRY 2017 ANNUAL RESULTS BRIEFING
Adjusted net tangible assets per share (unaudited, $000)Dec 2017Dec 2016
Net tangible assets
813,857727,052
Adjusted for internalisation:
Termination of management agreement
42,869-
Tax benefit of termination of management agreement
(12,003)-
Adjusted net tangible assets
844,723727,052
Closing shares on issue (shares)
498,723,330452,458,592
Adjusted net tangible assets per share (cents)
169.4160.7
▪Some measures have been presented excluding the impact of internalisation payment, net of tax

DISCLAIMER
32
The information included in this presentation is provided as at 12 February 2018 and should be read in conjunction with the NZX annual
results announcement, NZX appendix 1 (including the financial statements) and NZX appendix 7 issued on that same day.
Property for Industry Limited (PFI) does not 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’s control 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 makes 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 2017 ANNUAL RESULTS BRIEFING

Details of Annual Results Webcast SPH Notice – ANZ

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