External Management Proposal – Notice of Meeting Issued

AGM1 March 2018APLReal Estate

NZX Announcement – 1 March 2018

External Management Proposal – Notice of Meeting Issued

NPT Limited (NZX: NPT) advises that a Notice of Meeting has been sent to all shareholders for a
special meeting to consider and vote on a proposal to externalise the management of NPT to
Augusta Funds Management Limited, a wholly-owned subsidiary of Augusta Capital Limited (NZX:
AUG).

The meeting is to be held at 2pm on Monday 19 March 2018.

The NPT Board unanimously supports the proposal and has recommended that shareholders vote
in favour of the transaction.

Full details of the proposal, a summary of the key reasons that the independent directors believe
it is in the best interest of all shareholders, as well as a copy of the KordaMentha Independent
Appraisal Report, are included in the information supporting the Notice of Meeting.

In addition, a copy of the Management Agreement that is integral to the transaction is available
on NPT’s website www.npt.co.nz – or to any shareholder upon request to NPT’s office.

Important Information

The Notice of Meeting contains important information relating to the Augusta proposal and
shareholders are encouraged to read this carefully and to exercise their voting rights in person or
by providing a proxy.

The independent directors and Board of NPT look forward to the opportunity to discuss the
proposal with as many shareholders as possible at the upcoming special shareholders meeting.

Ends

Tony Osborne Bruce Cotterill
Chief Executive Officer Chairman
NPT Limited NPT Limited
T 09 375 9081 T 021 668 881
E tony@npt.co.nz E bruce@cotterill.co

Any media inquiries to be directed to:
Karyn Arkell
Grace PR
T 027 475 3511

---

Optimised
Property
Investments
Notice of Special Meeting
of Shareholders

CONTENTS
1. Letter from Independent Directors of NPT Limited
4. Notice of Special Meeting of Shareholders
6. Explanatory Notes
8. The Proposed Transaction
12. Management Agreement
18. Rationale for the Augusta Proposal
20. Managers Statement
22. Risks
24. Schedule 1: Assumptions Underlying Pro-Forma
Financial Impact
26. Schedule 2: Management Agreement Fee Schedule
30. Important Information
31. Glossary
33. Directory
Appendix 1: Independent Appraisal Report

Letter from
Independent
Directors of
NPT Limited
All shareholders are invited and encouraged to
attend the Special Meeting on Monday 19 March
2018, commencing at 2pm at Link Market Services
Limited, Level 11, Deloitte Centre, 80 Queen Street,
Auckland, where you will be asked to consider and
vote on the resolution.
Following a comprehensive review and due diligence
process, it is the view of the Board that the Augusta
Proposal represents a significant opportunity that
will set NPT on a path to growth.
Overview
In April 2017, shareholders voted to appoint three
new Directors to the Board of NPT, replacing three of
the existing Directors and effecting a change in the
governance of NPT.
The three new Board members joined existing
Director, Carol Campbell, and the newly constituted
Board then set about exploring options for the future
of NPT.
The Board quickly confirmed that NPT’s lack of scale
was a significant factor limiting its ability to increase
returns and subsequently invested considerable time
and effort in determining the best way forward to
support a growth strategy. Opportunities that have
been assessed include the purchase of a substantial
property portfolio and some strategic partnership
arrangements, among others.
Dear Shareholder,
The NPT Board is pleased to
present you with a proposal from
Augusta Capital Limited and
Augusta Funds Management
Limited (‘Augusta’) on the
resolution to externalise the
management of NPT, as described
within this Notice of a Special
Meeting of Shareholders.
1

While it was assessing the various opportunities,
the Board was developing its plan to differentiate
NPT in the listed property sector. The framework of
this thinking was taking shape at around the same
time that it received a proposal to externalise the
management of NPT to Augusta.
Over the course of several months, the Independent
Directors of NPT have been working through a
process to rigorously assess the Augusta proposal
including how this compares to other options. The
outcome is the Board is satisfied that Augusta has
the appropriate skills and track record to further
develop the strategy for the growth and success of
NPT, along with a commitment to execute this to the
benefit of all shareholders.
NPT and Augusta reached an agreement in principle
regarding the proposal to externalise management in
late November last year. The Agreement in principle
has now been further developed and set down in a
formal deed that is subject to the approval of NPT’s
shareholders.
The Augusta Proposal
Under the Augusta Proposal, Augusta will pay NPT
a one-off amount of $4.5 million for Augusta Funds
Management Limited (AFM) to acquire the right to
manage NPT under the terms of the Management
Agreement, with the obligations of AFM being
guaranteed by Augusta Capital Limited (ACL).
NPT has the right to terminate the Management
Agreement after five years upon payment to AFM of
a termination fee.
Further details are set out in the section titled “The
Proposed Transaction” on pages 8 to 10.
Key considerations for the Independent Directors in
their assessment of the Augusta Proposal were:
• As NPT’s largest shareholder, Augusta interests
are very much aligned with those of all NPT
shareholders.
• Augusta has built a well-earned reputation for
achieving growth in a relatively short period of time
and is well placed as a strategic partner for NPT.
• While externalisation of the management of
NPT was not the Board’s particular preference, it
represents the most appropriate way forward in
the context of NPT's current small scale.
• Augusta has substantial resources that NPT will
be able to leverage while benefitting from an
immediate saving in the cost of corporate overhead.
• The Augusta Proposal significantly reduces NPT’s
management expense ratio (“MER”), the cost of
administering the Company, and increases earnings
per share. This should allow for greater distributions
to shareholders relative to the status quo.
• The unique (in the listed property sector) ability to
terminate the Management Agreement gives NPT
the opportunity to internalise its management in
the future should the circumstances ever arise, for
a pre-determined fee.
NPT Limited Notice of Special Meeting of Shareholders2

We look forward to discussing this proposal with you.
Yours sincerely,
Independent Appraisal Report
As a consequence of Augusta Capital Limited
being such a substantial shareholder of NPT, the
externalisation proposal constitutes a transaction
with a related party under NZX Main Board Listing
Rule 9.2.
For this reason, the Independent Directors have
engaged the services of KordaMentha to evaluate
the proposed transaction to confirm that the
transaction is fair to all shareholders.
Further detail regarding the Independent Appraisal
Report, is contained in this Notice of Meeting and the
full report is appended.
In Summary
Following a comprehensive review and assessment of
the options, the Independent Directors of NPT have
concluded that the Augusta Proposal is in the best
interests of all NPT shareholders.
In the view of the Independent Directors, Augusta
has the appropriate skills, track record and
commitment required to assist us in pursuing our
growth strategy. As our largest shareholder, Augusta
is also inherently motivated to optimise the success
of NPT.
The Appraisal Report sought by the Independent
Directors confirms that this proposal is fair to
all shareholders. This confirmation supports the
Independent Directors' view.
The Independent Directors
therefore unanimously support
the Augusta Proposal and strongly
recommend that shareholders
vote in favour of Resolution 1 at
the upcoming Special Meeting.
Allen Bollard
Independent Director
Carol Campbell
Independent Director
Bruce Cotterill
Chairman and Independent
Director
3

Notice is hereby given that a Special
Meeting of Shareholders of NPT
Limited (NPT) will be held on Monday
19 March 2018 commencing at 2pm
at Link Market Services Limited, Level
11, Deloitte Centre, 80 Queen Street,
Auckland.
The agenda for the meeting is as follows:
Business
A. Matters for Resolution
The business of the meeting will be to consider and, if
thought fit, pass the following resolution:
Resolution 1 (as an ordinary resolution)
That approval be given to NPT entering into
a management contract with Augusta Funds
Management Limited (AFM) with Augusta Capital
Limited (ACL) guaranteeing the obligations of AFM,
the term of that agreement being for a minimum
period of 5 years on the terms and conditions
described in more detail in the Explanatory Notes
accompanying this Notice of Meeting and in
consideration of AFM paying to NPT $4,500,000
on that management contract being signed (the
Augusta Proposal).
B. General Business
The Board welcomes any other comments from
shareholders at the meeting and will provide an
opportunity during general business for shareholders
to question, discuss or comment on other matters
regarding NPT.
Directors’ Recommendation
For the reasons set out in more detail in the
Explanatory Notes to the Notice of Meeting,
the Independent Directors on the Board of NPT
unanimously support the Augusta Proposal.
Notice of
Special
Meeting of
Shareholders
NPT Limited Notice of Special Meeting of Shareholders4

The Independent Directors recommend that
shareholders vote to approve Resolution 1
Paul Duffy is a Director of NPT and is also Chairman
of Augusta Capital Limited which owns ordinary
shares in NPT. Paul Duffy did not participate in the
Board’s approval of the Augusta Proposal as set out
in Resolution 1.
Information relating to Resolution 1
The resolution is subject to approval of shareholders
by an ordinary resolution under Listing Rule 9.2.1 as
the Augusta Proposal is a material transaction with
a related party, being AFM and ACL.
ACL holds 18.85% of the voting shares on issue in
NPT and cannot vote at the meeting on Resolution 1
under Listing Rule 9.3.1.
Explanatory Notes
Explanatory Notes on the Resolution set out above are
attached to and form part of this Notice of Meeting.
Attendance
All shareholders are entitled to attend and vote
at the Special Meeting or to appoint a proxy
or representative (in the case of a corporate
shareholder) to attend and vote on their behalf.
The notice appointing a proxy or representative must
be received by Link Market Services Limited not later
than 2pm on Saturday 17 March 2018 (New Zealand
time) by any of the following means:
Mail:
Level 11, Deloitte Centre,
80 Queen Street,
Auckland 1142 or

PO Box 91976,
Victoria Street West,
Auckland 1142.
Facsimile:
+6 4 9 375 5990
Email: meetings@linkmarketservices.co.nz
proxy or representative does not preclude a shareholder
from attending and voting at the Special Meeting or
carrying this out electronically as set out in the proxy
form accompanying this notice. You may appoint the
Chairperson of the Special Meeting as your proxy.
However, please note that your proxy will not be able to
vote at the Special Meeting unless you have provided a
voting direction or discretion.
The Chairperson of the Special Meeting is willing
to act as a proxy. If you appoint the Chairperson of
the Special Meeting as proxy but do not direct the
Chairperson to vote on any particular matter then the
Chairperson intends to vote your shares in favour of
Resolution 1.
Shareholders may revoke their proxies by giving written
notice of revocation to the registered office of NPT or
the office of the Share Registrar no later than 2pm 17
March 2018 (New Zealand time).
Only one vote may be made at the meeting by a
shareholder. If a proxy is appointed and the shareholder
attends the meeting, then the proxy may not vote.
Restriction on Voting
Under Listing Rule 9.3.1 Augusta Capital Limited and
its Associated Persons cannot vote on the resolution at
the shareholder meeting.
Paul Duffy, a director of the Company, and Associated
Persons of Paul Duffy, cannot act as a discretionary
proxy at the meeting but may act as a proxy where
there is an express direction as how to vote.
Address details for NPT and the Share Registrar are set
out in the Voting / Proxy Form.
This Notice of Special Meeting has been approved by
NZX Limited (NZX) in accordance with NZX Main Board
Listing Rule 6.1.1. NZX does not take any responsibility
for any statement contained in this Notice of Meeting
or accompanying information.
By order of the Board.
Bruce Cotterill
Chairman
Proxies
A proxy need not be a shareholder and may be
appointed by completing the proxy form attached to
this Notice of Special Meeting. The appointment of a
5

Background
The purpose of the Special Meeting is to consider
and, if thought fit, to approve the Resolution set
out in the Notice of Meeting. An explanation of the
Resolution and additional details of the Augusta
Proposal are set out below.
Important
The Board recommends to all shareholders that
if they are in any doubt as to any aspect of the
matter to be considered and voted on at the Special
Meeting, they should seek independent financial or
legal advice in relation to the matter.
Ordinary Resolution
The Resolution at the Special Meeting is an ordinary
resolution and will be passed if a majority of the
shares voting on the resolution vote in favour of
the resolution. An ordinary resolution means a
resolution passed by a simple majority of the votes
of those shareholders entitled to vote and voting on
the resolution. All shareholders other than Augusta
Capital Limited and its associates are entitled to
vote on Resolution 1 for the purposes of the approval
required under NZX Main Board Listing Rule 9.2.
Explanatory
Notes
These explanatory notes set out
the detail of the transactions
which are the subject of
the Resolution required by
the shareholders under the
Companies Act and Listing Rules.
NPT Limited Notice of Special Meeting of Shareholders6

NZX Main Board Listing Rules
NZX Main Board Listing Rule 9.2.1 provides that the
Company shall not enter into a Material Transaction
if a Related Party is, or is likely to become:
‘(a) A direct or indirect party to the Material
Transaction or to at least one of a related
series of transactions in which the Material
Transaction forms part ...
unless that Material Transaction is approved by
ordinary resolution of the Company. ‘
The proposed Management Agreement between the
Company and Augusta Funds Management Limited
is a Material Transaction with a Related Party for the
following reasons:
(a) Under NZX Main Board Listing Rule 9.2.2
subclause (e) provides that for the purposes of
Listing Rule 9.2.1 a Material Transaction includes
a transaction where the Company:
‘Provides or obtains any services (including
without limitation obtaining underwriting
of securities or services as an employee) in
respect of which the actual gross cost to
the Issuer in any financial year (ignoring any
returns or benefits in connection with such
services) is likely to exceed an amount equal
to 1% of the average market capitalisation of
the Issuer.’
(b) The potential annual fees payable under the
proposed Management Agreement are likely
to be in excess of 1% of the Average Market
Capitalisation of the Company which as at
9 February 2018 was $95,533,000.
Under Main Board Listing Rule 9.2.3 a Related
Party means a person who is at the time of the
Material Transaction, or was at any time within six
months before a Material Transaction, the holder
of a Relevant Interest in 10% or more of a class
of equity securities of the Issuer carrying votes.
Augusta Capital Limited holds 18.85% of the total
voting shares on issue in the Company is a Related
Party under the Main Board Listing Rules and is a
party to the proposed Management Agreement as
guarantor, and accordingly this requires the proposed
Management Agreement to be approved pursuant
to an ordinary resolution of shareholders under Main
Board Listing Rule 9.2.1. Under Main Board Listing
Rule 9.3.1 ACL cannot vote on that resolution.
Listing Rule 9.2.5(b) requires the Notice of Meeting
to be accompanied by an Appraisal Report prepared
by an independent advisor approved by the NZX.
KordaMentha has provided this report on the fairness
of the Proposed Transaction to those shareholders
not associated with Augusta.
The proposed transaction does not require approval
as a ‘Major Transaction’ for the Company under
section 129 of the Companies Act 1993.
7

Introduction
Since April 2017, the Board of NPT has conducted a
detailed review of NPT, its property assets and the
options available to grow NPT.
This assessment process, over several months, has
included carrying out due diligence on the purchase of a
substantial portfolio, strategic partnerships with other
parties and external management opportunities.
The Board has also assessed the relative return for
shareholders of winding NPT up against all of the other
options.
This extensive period of assessment has culminated
in NPT entering into a conditional deed with Augusta
Funds Management Limited (AFM) and Augusta
Capital Limited (ACL) as guarantor for AFM, where
Augusta will acquire the rights to manage NPT under
the terms of a Management Agreement. The deed is
conditional on shareholder approval.
The reasons why the Board of NPT considers the
Augusta Proposal to be of benefit to shareholders are
as follows:
• The property portfolio of NPT lacks scale and the
options for organic growth are limited.
• Augusta has access to opportunities in the
property sector which can be of benefit to NPT.
• Augusta has the staff and skill base to assist NPT.
• The management expense ratio (MER) for
NPT operating on a standalone basis is above
the average MER for the property sector and
contracting out management services to Augusta
will provide a benefit to NPT by reducing expenses.
The Board considers that NPT needs a property
portfolio above $350 million in scale to justify the costs
of internal management. This reflects that the fixed
costs of maintaining an internal management team
with the required level of capability are significant and
will cost the company more than external management
where the asset base is less than $350 million. These
management costs are expressed in terms of MER.
MER is analysed on pages 22 and 23 of the Independent
Appraisal Report. As a result the Board believes that
The Proposed
Transaction
NPT Limited Notice of Special Meeting of Shareholders8

it is more appropriate for NPT to appoint an external
manager who can bring to NPT access to market
opportunities to allow NPT’s portfolio to grow.
The transaction is therefore a sale of management
rights by NPT to Augusta for a consideration of $4.5
million which requires shareholder approval by ordinary
resolution as AFM is a wholly owned subsidiary of ACL -
a Related Party by virtue of its ownership of 18.85% of
the NPT shares on issue.
To assist shareholders in understanding the
relationships of the parties to the transaction, this is
shown below in an illustration that has been prepared
by KordaMentha and the same illustration appears on
page 2 of the Independent Appraisal Report appended
to this Notice of Meeting.
Consideration
NPT will receive a one-off payment from Augusta of
$4.5 million.
The Manager
The Management Agreement is between NPT Limited
and Augusta Funds Management Limited (“AFM”)
as manager and Augusta Capital Limited (“ACL”) as
guarantor for AFM.
AFM is a wholly-owned subsidiary of ACL. ACL is listed on
the main Board of NZX. Information relating to ACL may
be found by visiting www.augusta.co.nz and www.nzx.com.
AFM manages property assets with a value in excess of
$1.7 billion and in the view of the Independent Directors
of NPT has the resources, experience and track record
to be able to carry out all of the duties and obligations
required by the Management Agreement.
Conditions
The transaction is conditional upon the approval of the
shareholders of NPT Limited.
This approval requires a vote on an ordinary resolution
and therefore needs to achieve a voting threshold of
over 50% of those eligible to vote and voting.
Under Listing Rule 9.3.1 of the NZX Main Board Listing
Rules ACL is not eligible to vote in respect of the
resolution and therefore will not be voting on that
resolution.
Use of Sale Proceeds
The net proceeds of the proposed transaction will be
used to pay down debt in the first instance.
Part of AFM’s role as manager will be to source suitable
assets for purchase by NPT and the debt will be
redrawn as these opportunities arise.
Summary of Independent Appraisal Report
KordaMentha was engaged by the Independent
Directors to evaluate the Proposed Transaction and
to give a view on whether the consideration and terms
and conditions of the transaction are fair to NPT’s
shareholders.
Management Fees
The Management Agreement provides for fees to be
payable to Augusta and further details of these fees
are set out in Schedule 2 and on pages 12 to 17. The
Independent Appraisal Report, which is attached to
this Notice of Meeting, sets out on pages 7, 21 and 22
of that report details of the management fees and
comments on the level of those fees. This information,
together with the comparative information on other
fees payable under management agreements should
assist shareholders in understanding the proposed fee
structure.
Type of Transaction
The sale of management rights and entering into a
management agreement where NPT’s business will be
managed by Augusta.
ACLNPT
AFM
18.85%
Proposed Externalisation
Shareholdings
Guarantee AFM Obligations
Management Rights Transferred
$4.5 million Consideration Payment
100%
9

A second alternative is that NPT be wound-up and the
capital returned to shareholders.
The Board has thoroughly assessed this option and
would not advocate it as a suitable alternative at
this time. In its assessment, the Board concluded
that the return to shareholders would be lower than
the potential returns that would be derived from the
Proposed Transaction.
If the Proposed Transaction Does Proceed
In the event that the Proposed Transaction does
proceed, by shareholders approving the ordinary
resolution at the meeting to be held on 19 March
2018, then the Management Agreement provides for
settlement to take place within 5 working days so
that the commencement date for the Management
Agreement would be 26 March 2018, or such other
date as agreed between Augusta and NPT. On the
implementation of the Management Agreement the
following will occur:
• NPT’s portfolio will be managed and operated by
Augusta from Augusta's premises.
• It is likely that certain employees of NPT will
transfer to Augusta to assist Augusta in the
management of NPT’s property portfolio.
• Those employees who do not transfer to Augusta
will be redundant and there will be a cost to NPT
in addressing redundancy payments for those
persons.
• The Board of NPT will remain in place and will
supervise the performance of Augusta under the
Management Agreement and continue to monitor
compliance by Augusta to the terms of that
agreement.
Board Recommendation
The Independent Directors consider that the Proposed
Transaction is in the best interests of all shareholders
at this time.
As a result, the Independent Directors unanimously
recommend that shareholders support the Proposed
Transaction.
Clause 1.4 of the report from KordaMentha states as
follows:
1.4 Conclusion Regarding the Fairness of the Proposed
Externalisation
Taking all the key elements of the Proposed Externalisation into
account, we conclude that the consideration and terms and
conditions are fair to the NPT shareholders not associated with
Augusta.
• The Proposed Externalisation is expected to result in an
initial cash receipt and ongoing enhanced earnings to NPT.
• The revenue multiple paid by Augusta to acquire the
management rights, and payable to terminate the
Management Agreement, are broadly consistent to the
multiples implied by comparable transactions.
• The terms of the Management Agreement which are
summarised on page 21, appear broadly in line with the
terms and conditions for other managed entities.
• Augusta is incentivised to grow NPT's property portfolio.
Assuming transactions are on commercial terms this may
result in an increase in the value of NPT, due to its greater
scale. The NPT Board will retain the right to approve or
reject the acquisition of properties and other material
transactions.
• NPT has the right to terminate the Management
Agreement, after a period of five years.
The reference to page 21 above refers to page 21 of the
KordaMentha report.
A full copy of the KordaMentha report is appended to
this Notice of Meeting.
If the Proposed Transaction Does Not Proceed
Should shareholder approval not be obtained, the
condition contained in the deed with Augusta will not be
satisfied and the proposed transaction will not complete.
In the event that this should occur, the Board of NPT would
be faced with pursuing an alternative course of action.
There are two current alternatives.
The first alternative is to continue on in NPT’s current
form. This would require significant investment in
building internal management capacity to pursue the
Board’s preferred strategy.
This will inevitably lead to a reduction in dividend
performance in the short to medium term. The
Board’s view is that this option is not as beneficial to
shareholders as the Proposed Transaction.
NPT Limited Notice of Special Meeting of Shareholders10

Print Place, Middleton, Christchurch
Property divested
Property divested
AA Centre, Auckland Central
Heinz Watties NDC, Hastings
22 Stoddard Rd, Mt Roskill
Eastgate Shopping Centre,
Linwood, Christchurch
11

A summary of the key terms of the Management
Agreement is set out below and a description of the
fees payable is set out in Schedule 2. A copy of the
Management Agreement can be found on NPT's
website – www.npt.co.nz or obtained upon request in
writing by any shareholder at the address set out in
the Directory.
The Board considers that the entry into and
performance of the Management Agreement is in the
best interests of NPT and the NPT Group.
Appointment
The appointment of AFM as the Manager of NPT
Group will take effect from the Commencement
Date. AFM will provide management (including
property management) and other services to the
NPT Group in a skilled and professional manner,
manage NPT Group’s business in such a way as to
seek to maximise the value of the investment of
shareholders over the medium to long term, and act
at all times in the best interests of the NPT Group
and in good faith.
On 8 Feb 2018 NPT and AFM as
manager, with ACL as guarantor,
entered into a Deed of Grant
in relation to the entering of a
Management Agreement under
which NPT will appoint, with effect
from the day, which is 5 business
days after shareholder approval is
given to that transaction, AFM as
the sole and exclusive provider of
management and other services
to NPT and every subsidiary of
NPT (the NPT Group).
Management
Agreement
NPT Limited Notice of Special Meeting of Shareholders12

Termination
The Management Agreement shall continue until
terminated in accordance with its terms. The
Management Agreement may be terminated as follows:
• Where NPT has a bona fide proposal to
internalise the management of NPT, at any time
after the fifth anniversary of the commencement
date, NPT may terminate the Management
Agreement by first consulting with the Manager
and on completion of that consultation, by
giving the Manager not less than 6 months
written notice (or as otherwise agreed between
the parties in writing). This notice will be invalid
if within a period of two years NPT appoints
any third party as an external manager of NPT.
Termination requires approval by an ordinary
resolution of the shareholders of NPT (excluding
Augusta who will be precluded from voting on the
resolution). If the Agreement is terminated then
NPT will pay to Augusta an amount equal to all
accrued fees together with the Termination Fee
which is a sum equal to 3.8 times the aggregate
of the fund management fee plus the property
management fee, plus the leasing fee for the
immediately preceding two years, with that
aggregate amount being divided by two (the
Termination Fee).
• At any time after the fifth anniversary of
the commencement date the Manager may
terminate the Management Agreement by
first consulting with NPT and on completion
of reasonable consultation giving NPT not less
than six months written notice of termination.
If the Manager terminates this Agreement all
accrued and unpaid fees, costs and sums up
to the termination date will be payable but no
Termination Fee will be payable.
• Either the Manager or NPT may terminate the
Management Agreement if the other party is
subject to an event as described below and by
giving six months’ notice of termination (except
as set out in (g) below):
(a) the defaulting party goes into liquidation
(other than a voluntary liquidation for the
purpose of reconstruction or amalgamation
on terms previously approved in writing
by the non-defaulting party) or voluntary
administration;
(b) a receiver, receiver and manager or
administrator is appointed in respect of
all or substantially all of the assets of the
defaulting party;
(c) an application is made to the Court or a
meeting is called for any of those purposes
in (a) and (b) above (unless the defaulting
party satisfies the non¬ defaulting party in
its reasonable opinion that the application or
call for meeting is frivolous or vexatious);
(d) the defaulting party is unable to pay its debts
as they become due;
(e) the defaulting party enters into any
arrangement or composition with its
creditors generally (other than with the prior
consent of the non-defaulting party which is
not to be unreasonably withheld);
(f) a statutory manager of the defaulting
party is appointed under the Corporations
(Investigation and Management) Act 1989; or
(g) the defaulting party commits a material
breach of a material provision of this
Agreement (which, in the case of the
Manager, must be a breach specified in
clause 14.7 of the Management Agreement)
and (if the breach is capable of remedy) fails
to remedy the breach within twenty working
days (or where the breach is remediable in a
longer period, such longer period as the non-
defaulting party agrees, acting reasonably)
after receipt of written notice from the non-
defaulting party requiring it to remedy the
breach.
13

appointed, including Paul Duffy who is Chairman
of Augusta. Those directors were all appointed by
shareholders at the meeting and therefore are not
the appointees of any shareholder.
Pending any change to the constitution Augusta has
confirmed that if a change to the constitution can
be implemented, in compliance with the Main Board
Listing Rules and the constitution of the Company
then Paul Duffy (an existing director of NPT) can be
treated as an appointee of Augusta. Augusta has
agreed that pending a change to the constitution
being approved by shareholders and a waiver being
granted by the NZX Limited, Augusta will not vote
on the appointment of the other directors if it
exercises the right to appoint a director. While Paul
Duffy remains in office, Augusta will not vote on the
appointment of directors except for Paul Duffy.
Unless and until such amendment to NPT’s
constitution occurs, and to the extent permitted by
the Listing Rules and applicable law, the Board shall
exercise its power to enable Augusta to have one
director on the Board of NPT.
Any director nominated by Augusta, and appointed
by the Board to fill any casual vacancy would retire
and stand for election at the next annual meeting
of shareholders (as required by the Listing Rules).
Augusta may vote on its nominee but not on the
appointment of any of the other directors.
Operational Matters
The Management Agreement also provides for
a Conflicts of Interest Policy which sets out how
acquisition and leasing opportunities will be
managed by AFM on behalf of its managed entities,
including NPT.
Where a conflict of interest is identified by AFM,
which is not an acquisition or leasing opportunity for
NPT, AFM as manager must determine whether that
conflict of interest could have an adverse effect on
NPT. If AFM determines that the conflict of interest
will have an effect on NPT, it must advise the Board,
who may waive the conflict of interest or require
AFM to prepare, implement and report to the Board
on a plan to manage that conflict of interest.
All accrued and unpaid fees, costs and other
expenses are paid to the Manager up to the
termination date but where NPT is not in default,
no Termination Fee is payable. If NPT is in default
then the Termination Fee is payable by NPT to
the Manager.
If termination is under (g) above then that
termination must have been previously approved
by an ordinary resolution of the shareholders of
NPT (excluding the right of Augusta to vote on the
resolution).
Assignment
Each party is entitled to assign its rights under the
Management Agreement with the prior written
consent of the other party and there are provisions
in the Management Agreement that the other party
must act reasonably in considering a request to
such assignment. This includes the requirement for
an assignee of the Manager to have the experience,
expertise and financial standing of the assignor and
for, if necessary, a guarantee to be given to replace
the guarantor of ACL.
Board Appointment Rights
Under the terms of the Management Agreement,
but subject to the NZX Main Board Listing Rules and
the requirements of any waiver of the Listing Rules
granted by NZX from time to time (if applicable) and
subject to Augusta holding at least 15% of the voting
shares on issue in NPT, Augusta may request that
NPT call a Meeting of Shareholders for the purposes
of approving amendments to NPT’s constitution to
enable Augusta to appoint one director to the Board
and to substitute or remove such director by notice in
writing to NPT.
If the Board includes one director appointed by
Augusta pursuant to such an amended constitution,
then Augusta will not, and will use its best
endeavours to procure that its associated persons do
not, vote on any resolutions to appoint or remove any
other director of the Board.
At the special shareholder meeting of the Company
held on 21 April 2017 three new directors were
NPT Limited Notice of Special Meeting of Shareholders14

As NPT’s largest
shareholder, Augusta
interests are very much
aligned with those of all
NPT shareholders.
15

Future Strategy
NPT proposes to adopt a “Yield Plus Growth”
strategy following completion of the Proposed
Transaction.
This strategy has been developed to the extent that
it is the Board’s preferred future strategy for NPT.
There is still some refinement to be undertaken in
conjunction with AFM to establish specific return
targets however a Yield Plus Growth strategy in this
context will see NPT targeting investment in property
assets where there are discernible opportunities to
enhance the asset’s value and to improve its return
profile over the short to medium term.
The NPT Board believes that this strategy is
consistent with the nature of NPT’s existing
properties and approach of targeting slightly higher
overall returns by taking on moderate risk and
serving the significant portion of the market that
does not seek the highest grade of accommodation.
Investment Objectives
NPT’s objective is to provide investors with an
investment in a diversified portfolio of New Zealand
commercial property with a ‘Yield Plus Growth’
investment strategy.
The fund will invest in:
• functional warehouse/ logistics assets with close
proximity to major infrastructure including; major
roads, airports, ports, rail, CBDs
• CBD or fringe commercial office opportunity
• select retail opportunity underpinned by clearly
defined demand analysis
• strong tenant covenants but with short WALEs
• well located assets underpinned by land value
Acquisition opportunities will first be identified by
reference to a managed entity’s investment strategy,
current business plan and any applicable restraints
such as contractual, legal, operational or financial
reasons that influence a managed entity’s ability to
undertake a transaction. If this process results in an
acquisition opportunity being deemed suitable for
more than one entity, AFM will establish independent
teams, with appropriate information barriers, to
act on behalf of each party. Accordingly, acquisition
opportunities may not be offered exclusively to NPT.
Certain acquisition opportunities would not need
to be offered to NPT under the Conflicts of Interest
Policy, including where:
(a) the assets which are the subject of the
acquisition opportunity are in close proximity to
those of another managed entity;
(b) the acquisition opportunity is available for a
particular managed entity due to the specific
characteristics of that managed entity;
(c) an acquisition opportunity is offered
confidentially and/or exclusively to a particular
managed entity; or
(d) where an acquisition opportunity is subject to a
preferential arrangement between a third party
and a managed entity.
Leasing opportunities that arise for two or more
entities managed by AFM are to be dealt with on
a similar confidential, competitive basis. AFM has
agreed that it will not solicit NPT tenants for the
benefit of any other entity that AFM manages other
than where the tenant responds to untargeted public
advertising or approaches AFM, whether directly or
through an agent, on an unsolicited basis where the
tenant would not be in breach of an existing lease if
it were to cease being an NPT tenant.
NPT Limited Notice of Special Meeting of Shareholders16

NPT will acquire assets with the following key
investment metrics:
• Assets will be acquired for their ability to
contribute to a stabilized blended WALE of 5.0
years
• Active assets with the ability to enhance the
asset value in the short to medium term, which
ultimately provide a demonstrable pathway to
delivering the target industry outperformance
benchmarks on a risk adjusted basis. These
return hurdles will be adjusted to reflect market
conditions from time to time.
Investment Strategy
NPT will maintain this ‘Yield Plus Growth’ investment
strategy, targeting higher returns than typically
available to investors in listed entities that are
invested only in low risk major CBD buildings through
a more diversified property portfolio.
NPT will invest in a nationwide diversified portfolio
of properties, spread across the main centres North
of Taupo but will not preclude main centres of
Wellington and Christchurch or selected provincial
exposures.
NPT will target superior, risk-adjusted returns, in
keeping with its ‘Yield Plus Growth’ investment
strategy, through the:
• careful selection of assets that are higher-
yielding or have the potential to be high yielding
• astute judgement of risks
• application of intense asset management, and
• avoidance of hotly contested, lower yielding,
premium assets.
NPT’s investment goal is to target long-term total
returns greater than the benchmark return threshold
detailed by the NZX Property Sector Index while
maintaining a strong balance sheet with a long-run
average debt-to-assets ratio of approximately 35%
to 42% which will be subject to fluctuation over the
short term.
NPT will invest in assets (and recycle capital out
of existing assets) based on sectors, locations and
exposures that are attractive based on property,
demographic, business or economic trends and which,
as a portfolio, diversify risk across multiple sectors,
regional economies and tenants.
NPT will adopt an active management philosophy
encompassing asset and financial management,
strategic investments, acquisitions and divestments
and the judicious development of new and existing
assets.
Dividend Policy
The NPT Board intends to continue its existing
dividend policy of distributing between 90 – 100% of
Distributable Profit. Distributable Profit is defined by
NPT as Net Profit before Taxation adjusted for non-
cash items and/or non-recurring items and current tax.
17

In determining to proceed with the Augusta Proposal,
the Board considered a number of factors including
the resources and quality of Augusta as Manager, the
financial impact and the terms of the Management
Agreement, including ensuring the Company was
sufficiently compensated for externalising the
management rights. Key conclusions in determining
to proceed with Augusta included:
• NPT’s current small scale makes building
the necessary management and resource
capacity to manage and grow the current
portfolio prohibitively expensive. This is evident
in NPT’s current management expense ratio
(“MER”) which is amongst the highest in the
listed property sector. NPT’s MER in FY17 was
approximately 1.3% which is anticipated to
reduce to closer to approximately 1.0% following
the Augusta proposal and allowing for the
anticipated reinvestment of proceeds from the
sale of 99 Albert Street, Auckland and 17 Print
Place, Christchurch over time.
• Augusta has built a well-earned reputation for
achieving growth in a relatively short period of
time and is well placed as a strategic partner for
NPT. Access to Augusta’s significant property
management resources and deal flow should
assist in achieving NPT’s growth ambitions.
• The reduction in the MER and interest cost
savings from the proceeds of the sale of the
management rights to Augusta will result in
improved distributable earnings per share of
approximately 8% on a pro-forma FY18 basis
from 3.78 to 4.09 cents per share. Estimated
gearing is also expected to decline from
approximately 33% to 31% while net tangible
assets per share are expected to increase by
2.3 cents to $0.731 per share. The financial
implications of the Augusta Proposal are set out
in the section titled “Summary Financial Metrics”
on page 19.
• The $4.5 million proceeds from the sale of
management rights were considered to reflect
fair value relative to the likely cost savings to NPT
and the services received. The purchase value is
also considered fair by the Independent Appraiser
in relation to the proposal.
• The terms of the Management Agreement are
as favourable as NPT could obtain, including
performance fees only being paid if NPT
outperforms the listed property sector and the
ability to terminate the agreement without cause
after 5 years (see pages 12 – 17 for the key terms
of Management Agreement).
Rationale for
the Augusta
Proposal
NPT Limited Notice of Special Meeting of Shareholders18

Summary Financial Metrics
The following table provides a summary of selected
financial information for NPT under both a standalone
basis and assuming externalisation under the Augusta
Proposal. For the purposes of FY18 pro forma financial
information, implementation of the Augusta Proposal
is assumed to have occurred on 1 April 2017 (although
actual settlement is to occur within 5 business days if
Shareholders approve the proposal at the meeting to
be held on 19 March 2018). The NPT Board considers
that this allows for a more meaningful comparison
of the full year impact of the Augusta Proposal
for the financial year to 31 March 2018. The FY18
financial information represents unaudited forecast
information based on the Board’s expectation
of performance for NPT. The forecast financial
information has been prepared by Management and
approved by the Board for illustrative purposes only.
The assumptions underlying the financial information
can be found in Schedule 1.
In the preparation of the financial information
including comparative information for inclusion in
this notice of meeting, NPT has taken into account
that if the Company appoints Augusta, and that
appointment is approved by the shareholders, then
the Manager will be presenting to the Board of
NPT the details of future strategies and plans for
NPT that relate to the financial year commencing
1 April 2018. Based on the assumption that such
appointment will be approved by shareholders it
would be inappropriate for the Board to put forward
financial forecasts that relate to the 2019 financial
year as these could be misleading in the event that
the Manager has a different view on how to manage
the business and create shareholder wealth. For
this reason, the Board of NPT has not included any
forecast financial information in these explanatory
notes in relation to FY19.
NPT STANDALONE
IMPACT OF
THE AUGUSTA
PROPOSAL
NPT AFTER
THE AUGUSTA
PROPOSAL
Year Ending 31 March ($’000)FY17AFY18FFY18F
Pro Forma
FY18F
Pro Forma
Gross Rental Income
17,15217,132150
1
17,282
Direct Property Operating Expenses
(5,276)(5,232)(17)(5,249)
Net Rental Income
11,87611,90013312,033
Other Income
304--
Administration Expenses
2
(2,357)(2,339)1,318(1,021)
Base Management Fees
--(919)(919)
Earnings Before Interest and Tax
9,5499,56553110,096
Net Finance Costs
(2,726)(2,810)187(2,623)
Net Profit Before Tax, Unrealised Changes in Fair Value of
Investment Properties and Other Non-Recurring Items
6,8236,7557187,473
Distributable Profit Per Share After Current Tax (Cents)
3
3.783.780.324.09
LVR (Net Debt / Investment Properties)
33.1%32.6%(2.4%)30.2%
Net Tangible Assets Per Share (cents)
72.370.82.3
5
73.1
Management Expense Ratio (MER)
4
1.3%1.3%(0.2%)1.1%
Notes to table:
1 Increased rental income results from leasing of space currently occupied by NPT management at 99 Albert Street following externalisation.
2 A ctual Administration Expenses in FY17 of $2,612,000 adjusted by $255,000 to reflect one-off legal proceeding costs.
3 Distributable Profit per Share represents NPT’s calculation of underlying earnings, which is defined as net profit before income tax adjusted
for non-cash items and/or non-recurring items less current tax, divided by the fully diluted shares on issue.
4 MER based on total Administration Fees and Base Management Fees divided by the average of opening and closing total assets for the
relevant year.
5 Increased Net Tangible Assets represents the net per share impact of the gross proceeds of the sale of the management rights to Augusta
for $4.5 million less assumed $680,000 ($489,600 net of tax) of redundancy costs and $320,000 of (non tax deductible) transaction costs
relating to the Augusta Proposal.
19

Manager's
Statement
Augusta’s strategy for NPT is clear:
1. To provide investors with an investment in a
diversified portfolio of New Zealand commercial
property with a ‘Yield Plus Growth’ investment
strategy.
2. Target long-term total returns greater than the
benchmark return threshold detailed by the NZX
Property Sector Index while maintaining a strong
balance sheet with a long-run average debt to
assets ratio of approximately 35%
3. Invest in assets (and recycle capital out of
existing assets) based on sectors, locations and
exposures that are attractive based on property,
demographic, business or economic trends and
which, as a portfolio, diversify risk across multiple
sectors, regional economies and tenants.
4. The Company will adopt an active management
philosophy encompassing asset and financial
management, strategic investments, acquisitions
and divestments and the judicious development
of new and existing assets.
Augusta has a track record that demonstrates its
success in business growth and property management
strategies and, as NPT's current largest shareholder,
is 100% committed to playing a key role in the growth
and success of NPT.
Founded in 2001, Augusta is a leading diversified
listed fund manager with value-adding and asset
management expertise across New Zealand
and Australia. Augusta owns and manages
over 100 properties across the office, retail and
industrial sectors, with $1.7 billion of assets under
management.
Augusta employs 36 staff across offices in Auckland
and New Plymouth, with specialist expertise in asset
management and development management, as well
as other essential professional functions including
accounting, treasury and investor relations, legal,
compliance and company secretariat.
The number of assets it manages gives Augusta a
superb vantage point from which to understand the
market and unlock real estate opportunities. Augusta
has comprehensive and up-to-date knowledge and
insights pertaining to property buyers/sellers, tenants
and, importantly, the constant and subtle shifts to
lending and bank sentiment. Understanding this
sentiment has a critical bearing on the investment
strategies ultimately determined for each property it
manages.
Augusta's wide market reach, coupled with its
professional expertise across all the key areas of
property management, represents the backbone
of the value proposition it wishes to offer NPT
shareholders, and which will underpin its strategy for
NPT's future growth and success.
NPT Limited Notice of Special Meeting of Shareholders20

21
Following a comprehensive
review and assessment
of the options, the
Independent Directors of
NPT have concluded that
the Augusta Proposal is in
the best interests of all NPT
shareholders.

Risks
Introduction
Like any significant transaction for a group of
companies, the Augusta Proposal is not free from
risk. This section describes the circumstances that
NPT is aware of that exist or are likely to arise that
significantly increase the risk to NPT’s financial
position, financial performance or stated plans. The
selection of risks has been based on an assessment
of a combination of the probability of a risk occurring
and the impact of the risk if it did occur. This
assessment is based on the knowledge of the Board
as at the date of this Notice of Meeting. There is
no guarantee or assurance that the importance of
different risks will not change or that no other risks
may emerge over time.
Where practicable, NPT seeks to implement risk
mitigation strategies to minimise the exposure to
some of the risks outlined below, although there can
be no assurance that such arrangements will fully
protect NPT from such risks.
You should carefully consider these risks before
deciding how to vote in respect of the Resolution.
The statement of risks in this section does not take
account of the personal circumstances, financial
position or investment requirements of any particular
person. It is important, therefore, that before
making any voting decision, you give consideration
to the suitability of an investment in the shares in
light of your individual risk profile for investments,
investment objectives and personal circumstances
(including financial and taxation issues).
NPT Limited Notice of Special Meeting of Shareholders22

RISKDESCRIPTIONMITIGATION STRATEGIES
Transaction
costs could be
significant
NPT has committed significant resources to the analysis
of the various proposals received, to the negotiation of the
terms of the Augusta Proposal and to the various other
associated transactions.
If Resolution 1 is not approved by shareholders, NPT will
have incurred significant costs even though the transaction
would not proceed as proposed.
NPT estimates that total pre tax transaction costs for the
successful implementation of the proposed transaction
would be approximately $1,000,000. After taking into
account tax deductibility the financial impact of the
estimated amount of $1,000,000 is approximately
$810,000. In the event that the proposed transaction does
not proceed, NPT expects that approximately $300,000
of these costs would still have been incurred. These costs
would impact on NPT’s standalone debt levels and may
affect the financial performance of NPT and its dividend
prospects.
Transaction costs are not material in the
context of the proposed transaction as
a whole. However, they are potentially
material to NPT in its current form.
Shareholders should take into account
the effect of the transaction costs.
Performance
of external
manager
If the proposed transaction is implemented, NPT will be
reliant on the management of Augusta and the expertise
of Augusta’s management team. Augusta’s performance
as manager could have a material impact on NPT’s
performance.
There is also a risk that Augusta makes acquisition
allocation decisions that do not necessarily favour NPT and
accordingly that NPT misses out on opportunities due to
these decisions.
Augusta is a listed property vehicle
on the Main Board. Augusta will also
derive a significant economic benefit
from its 18.8% interest in NPT and will
be incentivised to perform through
the performance fee provisions in the
Management Agreement.
The Management Agreement may
be terminated by NPT as described
in the section titled Management
Agreement. This would require approval
of shareholders by Ordinary Resolution
and the payment of a termination fee to
Augusta.
Augusta has adopted a Conflicts of
Interest Policy under which acquisition
and leasing opportunities are dealt with.
NPT may
not meet
the expected
earnings per
share or other
forward-looking
information
contained in
this Notice of
Meeting
NPT has carefully prepared the forward-looking financial
information contained in this Notice of Meeting to ensure
it represents its best estimate of the matters described.
The forward-looking financial information has been
prepared for illustrative purposes but should not be taken
as a guarantee or statement by NPT, the Board or any
other person that those results will be achieved.
Shareholders should carefully read the
assumptions which are contained in
Schedule 1 and be aware that the actual
results may vary from the information
contained in this Notice of Meeting.
23

Schedule 1: Assumptions Underlying Pro-
Forma Financial Impact
The Board believes that the financial information
and forward-looking statements set out in this
Notice of Meeting have been prepared with
due care and attention, and considers that the
assumptions, when taken as a whole, are reasonable
at the time of preparing this Notice of Meeting.
However, the financial information and forward-
looking statements are not a guarantee of future
performance and involve known and unknown
risks, uncertainties, assumptions and other factors,
many of which are beyond the control of NPT and
which may cause the actual results, performance
or achievements of NPT or the shares to differ
materially from those expressed or implied by the
statements. Accordingly, no assurance can be given
that the financial information and forward-looking
statements set out in this Notice of Meeting will
correspond with actual results and you are cautioned
not to place undue reliance on any financial
information or forward-looking statement contained
in this Notice of Meeting.
You should not regard the financial information
or any other forward-looking statement as a
representation or warranty by NPT, its directors,
officers or advisers or any other person referred
to in this Notice of Meeting with respect to the
achievement of the results set out in any such
statement, or that the underlying assumptions used
will in fact be realised.
Assumptions for Summary Financial
Information
a. Settlement timing for the Augusta Proposal
Implementation and settlement of the Augusta
proposal is assumed to occur on 1 April 2017 for
pro-forma purposes to allow comparison for a full
financial year impact of the proposed transaction
(settlement is 5 days after the shareholders meeting
approves the proposed transaction, with that
meeting to be held on 19 March 2018).
b. Rental Income
Rental income has been forecast based on existing
leases carrying to term and assumes a level of new
leases for currently vacant spaces which are expected
to be tenanted.
Under the Augusta proposal it is assumed that
the current management of NPT would vacate the
rented premises at 99 Albert Street which would
free up space for new tenants. The net impact of the
Augusta proposal is estimated to be $150,000 for a
full year.
c. Direct Property Operating Expenses
Direct property operating expenses are expected
to increase by approximately $17,000 under the
Augusta proposal, on a pro forma basis, reflecting
the net increase in property management fees
payable to Augusta relative to the net fees paid to
external managers currently (after allowing for some
recovery from tenants).
d. Management Fee Expenses
Based on the forecast levels of assets under
management, the “Fund Management Fee” (as
defined in the Management Agreement) payable
to Augusta would be $919,000 in FY18 on a pro
forma basis. No allowance has been made for any
“performance fee” (as defined in the Management
Agreement) assumed during the same period.
The key terms of the Management Agreement
are described in the section entitled Management
Agreement. A summary of the fees payable to
Augusta under the Management Agreement is set
out in Schedule 2.
e. Administration Expense
Administration expenses are expected to reduce
by approximately $1.3 million on an annual basis
post the Augusta proposal as a majority of NPT’s
administration function is outsourced to Augusta
under the Management Agreement.
NPT Limited Notice of Special Meeting of Shareholders24

The majority of the remaining administration
expenses will relate to ongoing corporate governance
costs such as directors’ fees and compliance costs
including audit fees, NZX, registry and interim and
annual financial reporting costs. This assessment is
based on the expected administration expenses for
NPT on a standalone basis and post the Augusta
Proposal.
f. Proceeds from the Sale of the Management
Rights and Net Finance Expense
NPT expects net proceeds from the sale of the
management rights of $3.7 million after allowing for
the expected post-tax redundancy costs and other
costs associated with the Augusta Proposal. The net
interest cost savings from the proceeds of the sale
of management rights are based on NPT’s existing
interest rates.
g. Investment Properties
NPT has already announced the sale of investment
properties, being 99 Albert Street, Auckland and 17
Print Place, Christchurch, Print Place is expected to
settle on 29 March 2018, just prior to year-end. For
the purposes of assessing the pro-forma impact
of the Augusta proposal, Print Place is assumed to
settle on 31 March 2018 and realise a loss on sale of
$3 million being the net sale price of $8 million less
the current book value of $11 million.
For the purposes of the FY18 forecasts, no other
realised or unrealised revaluation gains or losses are
assumed for NPT’s remaining investment properties.
Schedule 2: Management Agreement Fee
Schedule
In return for the performance of its duties as
manager, AFM is entitled to the following fees under
the Management Agreement:
• A Fund Management Fee being an amount equal
to the aggregate of:
• 0.50% of total assets to the extent the total
assets are less than or equal to $500 million;
and
• For any amount in excess of $500 million
0.40% of total assets.
“total assets” includes cash for the first six
months after commencement date and then
excludes cash.
• A Performance Fee which is calculated quarterly
and is the shareholder return for each quarter
less the benchmark return with the benchmark
return being as at the last day of each quarter
the percentage change in the index known
as the S&P / NZX All Real Estate Index. The
performance fee cannot exceed a cap of, for each
quarter, 1.25% of the return above the benchmark
index for the relevant quarter. Any excess returns
can be carried forward and deficits are also
carried forward into a carrying account with any
deficits or surpluses in the carrying account not
to be carried forward beyond eight consecutive
quarters.
• A Development Management Fee, means for
a development, 3.5% of the total cost of the
relevant development or to any feasibility in
respect of a development fees at an agreed level.
NPT Limited Notice of Special Meeting of Shareholders26

• An Acquisition Fee which is 1% of the aggregate
of the purchase price or other consideration for
the purchase of any real property. There is no fee
on disposal of property.
• Leasing Fees with the relevant amounts being
payable based on a lease term so that the fee is:
(a) 12% of annual gross rent payable for the first
complete year for leases of less than three
years;
(b) for leases with a term greater than three
years, but less than four years, 13% of the
annual gross rent as above;
(c) for leases with a term of four years or
greater, but less than five years, 14% of the
annual gross rent as above;
(d) for leases with a lease term of five years or
greater, 15% of the annual gross rent as set
out above;
(e) on a renewal of lease 50% of the fee payable
under (a) above;
(f) a legal administration fee calculated by
reference to the Manager’s applicable
standard hourly rates, which as at the date
of this agreement range from $100 -$300
per hour but limited to a maximum amount
of $1,200 for an agreement to lease or
surrender or variation extension assignment
or sublease of a property.
• A Property Management Fee of 1.5% of gross
rental income.
The full details of the above fees are set out in the
Management Agreement, a copy of which is available
on NPT’s website, or upon request in writing by any
shareholder at the address set out in the Directory.
For the purpose of determining the performance
fee, but for illustrative purposes only, at the end of
this schedule there is a worked example of how that
performance fee is applicable.
Management Agreement Performance Fee
worked examples and commentary
The following worked example of the performance
fee payable to Augusta is given for illustrative
purposes only and should not be relied upon as (and
is not) an indication of future performance of NPT
or the quantum of performance fees that will be
paid to Augusta under the Management Agreement.
Actual performance fees paid, and the performance
of Augusta, under the Management Agreement could
differ materially from the fees referred to in the
worked example. The worked example is necessarily
summary in nature and the actual performance
fee (if any) will be calculated under the terms of
the Management Agreement, which prevails in all
respects over the worked examples. NPT and its
directors accept no responsibility for any action taken
in reliance upon the worked example by any person.
27

Assumptions
Scenario 1Scenario 2Scenario 3Scenario 4
A.Opening Market Capitalisation
$100m$100m$100m$100m
B.Benchmark Return for Quarter
2.50%1.00%(2.00)%3.00%
C.Shareholder Return for Quarter
4.00%1.50%(1.00)%2.00%
D.Outperformance for Quarter (C – B)
1.50%0.50%1.00%(1.00)%
E.Carrying Account at beginning of Quarter
$20,000$40,000$(125,000)$50,000
Calculation
G.Initial Amount:
$150,000$50,000$100,000$-
G = If D > 0 then 10% x A x D
= IF D ≤ 0 then 0
H.Deficit
$-$-$-$(100,000)
H = If D ≤ 0 then 10% x A x D
= IF D > 0 then 0
I.Cap
$125,000$125,000$125,000$125,000
I = 1.25% x A x 10%
J.Performance Fee
$125,000$90,000$-$-
J = If C < 0 then 0
= If (G + H + E) > 0 but ≤ I then (G + H + E)
= If (G + H + E) > 0 and > I then I
= If (G + H + E) < 0 then 0
K.Closing Carrying Account
$45,000$-$(25,000)$(50,000)
K = E + G + H – J
Illustrative Performance Fee example
An illustrative example of the calculation of the
performance fee using hypothetical figures is set out
below based on 100 million weighted average shares
on issue with a volume weighted average opening
price of $1.
NPT Limited Notice of Special Meeting of Shareholders28

Important Information
(a) Forward-Looking Statements
This Notice of Meeting and proxy form attached to
it contain forward-looking statements including,
without limitation, the implementation of the
Augusta Proposal, the financial position, business
strategy and plans and objectives of management
for future operations of NPT based on NPT’s current
expectations of future events.
Forward-looking statements contained in the Notice
of Meeting and proxy form attached to it are subject
to known and unknown uncertainties, assumptions
and risks that could cause the Augusta Proposal not
to be implemented or the actual results, performance
or achievements to differ materially from those
expressed or implied by such forward-looking
statements. Such forward-looking statements
are based on numerous assumptions regarding
satisfaction of conditions for and completion of
the relevant proposal and NPT’s present and future
business strategies and the environment in which
NPT will operate in the future. Matters not yet known
to NPT or not currently considered material by NPT
may impact upon these forward-looking statements.
The statements in the Notice of Meeting reflect
views held as at the date of this Notice of Meeting.
Shareholders are cautioned not to place undue
reliance on such forward-looking statements.
(b) General Information
Unless otherwise indicated, capitalised terms have
their meaning set out in the Glossary.
All references to time in this Notice of Meeting are
to New Zealand Standard Time (unless the context
requires otherwise).
Any reference to $ and cents is to New Zealand
currency.
Due to rounding, some totals may not correspond
with the sum of the separate figures.
(c) Enquiries
For all enquiries relating to the Augusta Proposal
or this Notice of Meeting, please contact NPT's
registrar, Link Market Services on 09 375 5998
(New Zealand only), +64 9 375 5998 or by email
at enquiries@linkmarketservices.co.nz or your
financial adviser. If you have any questions about
how to complete the proxy form, please contact the
Registrar as set out in the Directory.
30NPT Limited Notice of Special Meeting of Shareholders

Associated Person
has the meaning given to that term in the Listing
Rules
ACL
Augusta Capital Limited
AFM
Augusta Funds Management Limited
Augusta Proposal
the proposal made by Augusta in respect of the
externalisation of the management of NPT to
Augusta.
Board
the Board of Directors of NPT
Chairman
the Chairman of the Board
Commencement Date
is the date that the Management Agreement
commences, being five working days after
shareholder approval to the Proposed Transaction is
obtained
Companies Act
Companies Act 1993
Distributable Profit
net profit before taxation adjusted for non-cash items
and/or non-recurring items less current tax. The NPT
Board considers Distributable Profit as an appropriate
measure to evaluate the impact of the Augusta
Proposal relative to GAAP profit measures as it removes
the impacts of investment property revaluation
gains and other one-off items. Schedule 1 provides a
reconciliation of NPT’s forecast FY18 net profit before
taxation and Distributable Profit following the Augusta
Proposal. Distributable Profit is a non-GAAP measure
and therefore does not have a standardised meaning
prescribed by GAAP. It may not be comparable to
similar financial information presented by other entities.
The Distributable Profit numbers set out in this Notice
of Meeting have not been subject to audit or review
Glossary
FY
Financial Year ending 31 March
FY17A
NPT’s actual consolidated financial performance for
the year ended 31 March 2017
FY18F
NPT’s forecast consolidated financial performance
for the year ending 31 March 2018 comprising actual
financial performance for NPT and its subsidiaries for
the 9 months ended 31 December 2017 and expected
financial performance for NPT and its subsidiaries for
the three months beginning on 1 January 2018 and
ending 31 March 2018
GAAP
New Zealand Generally Accepted Accounting Practice
Glossary
this glossary of terms
Listing Rules
the Listing Rules of the NZX Main Board
LVR
the ratio of bank debt owing by NPT to total assets
of NPT
Main Board
the main board equity securities market operated by
NZX
Management Agreement
the agreement proposed to be entered into between
NPT and AFM as Manager and ACL as Guarantor
in respect of the management of the business and
assets of NPT by Augusta in the form as attached to
an agreement between the parties dated 8 February
2018 which management agreement is available on
the website of NPT, www.npt.co.nz
Notice of Meeting
this notice of special meeting to be distributed to
Shareholders
NPT
NPT Limited
Glossary
31

Glossary
NPT Group
NPT and all its subsidiaries
NZX
NZX Limited
Ordinary Resolution
a resolution of shareholders approved by a simple
majority of the votes of those shareholders entitled
to vote and voting on the matter
Proposed Transaction
NPT granting to Augusta management rights over
the assets of NPT in exchange for payment by
Augusta to NPT of $4,500,000
Registrar
Link Market Services Limited
Resolution
the Ordinary Resolution set out in the Notice of
Meeting
Share
an ordinary share in NPT
Shareholders
those people who hold ordinary shares in NPT
Special Meeting
the Special Meeting of Shareholders to be held on
19 March 2018 commencing at 2pm at Link Market
Services Limited, Level 11, Deloitte Centre, 80 Queen
Street, Auckland
Termination Fee
means a sum equal to 3.8 times the aggregate
of the Fund Management Fee plus the Property
Management Fee, plus the Leasing Fees for
the immediately preceding two years with that
aggregate amount being divided by two
WALE (or WALT)
is a measure of a property's risk of vacancy known as
Weighted Average Lease Expiry or Weighted Average
Lease Term. For a property, it is calculated by using
the unexpired term of each lease weighted with the
areas occupied or rental income
32NPT Limited Notice of Special Meeting of Shareholders

Company
NPT Limited
PO Box 105 090
Auckland City Post
Auckland 1143
Phone: 09 375 9081
www.npt.co.nz
Bankers
Bank of New Zealand
Auditor
Grant Thornton New Zealand Audit Partnership
L4, Grant Thornton House
152 Fanshawe Street
PO Box 1961
Auckland 1140
Registrar
Link Market Services Limited
Level 11
Deloitte Centre
80 Queen Street
Auckland 1010
PO Box 91976
Auckland 1142
Legal Advisor
David Stock
Barrister and Solicitor
Level 3
22 Moorhouse Avenue
Christchurch
Independent Appraiser
KordaMentha
Level 16
45 Queen Street
PO Box 982
Auckland 1140
Directory
Directory
33

NPT Limited
Independent Appraisal Report Prepared in Relation to
the Proposed Management Externalisation

February 2018

Independent New Zealand firm internationally affiliated with KordaMentha

NPT Limited
Independent Appraisal Report Prepared in Relation to
the Proposed Management Externalisation

February 2018

Independent New Zealand firm internationally affiliated with KordaMentha

Page 1

Contents

1 Executive Summary ....................................................................................................................................................... 2
2 Scope of the Report ...................................................................................................................................................... 5
3 The Proposed Externalisation ....................................................................................................................................... 6
4 Overview of NPT .......................................................................................................................................................... 10
5 Listed Property Vehicles .............................................................................................................................................. 18
6 Overview of Augusta .................................................................................................................................................... 24
7 Assessment of the Proposed Externalisation ............................................................................................................ 26

Appendix 1: Sources of Information .................................................................................................................................... 31

Appendix 2: Qualifications and declarations ....................................................................................................................... 32
Appendix 3: Valuation Methodologies ................................................................................................................................. 33
Appendix 4: New Zealand Listed Property Vehicles ............................................................................................................ 34
Appendix 5: Weighted Average Cost of Capital ................................................................................................................... 36

Page 2

1 Executive Summary
1.1 Introduction
NPT Limited (NPT or the Company) is a New Zealand incorporated property investment company that is listed on the
NZX Main Board (NZX). NPT owns retail, industrial and commercial properties in Auckland, Christchurch and Hastings.
NPT has its own internal management team and is relatively small for a property investment company. Due to its size and
internal management structure, NPT incurs a higher cost of management than many of its peers, proportional to its revenue.
It is the opinion of the NPT Board that NPT needs a property portfolio of more than $350 million to justify the costs of internal
management and – in the meanwhile – it is more appropriate for NPT to appoint an external manager who can bring to NPT
access to market opportunities to allow NPT’s portfolio to grow.
The Proposed Externalisation
NPT has entered into a conditional agreement with Augusta Capital Limited (ACL) and Augusta Funds Management Limited
(AFM), to externalise its management (the Proposed Externalisation).
Figure 1.1: Illustration of the Proposed Externalisation

If the Proposed Externalisation is approved, NPT will enter into a management agreement with AFM, pursuant to which NPT will
appoint AFM as the exclusive provider of management services in respect of NPT (the Management Agreement). AFM’s
obligations under the Management Agreement are guaranteed by ACL.
In consideration of the rights granted under the Management Agreement, AFM will pay NPT a one-off amount of $4.5 million.
ACL is a property investment and management company listed on the NZX. AFM is a wholly owned subsidiary of ACL.
As at the date of this report, ACL holds 30,528,933 ordinary shares in NPT, representing 18.85% of the NPT shares on issue.
In this report, we refer to each of AFM and ACL as ‘Augusta’.
The Proposed Externalisation is subject to NPT shareholder approval
The Proposed Externalisation constitutes a material transaction with a related party under the NZX Listing Rules and must be
approved by an ordinary resolution of NPT’s shareholders. As part of that process, NPT has appointed KordaMentha to prepare
an Appraisal Report.
This report is addressed to the independent directors of NPT, for the benefit of shareholders not associated with Augusta, to
assist those shareholders in deciding whether to approve or reject the Proposed Externalisation.
AFM
100%
Guarantee AFM Obligations
Management Rights Transferred
$4.5 million Consideration Payment
Shareholdings
Proposed Externalisation
ACLNPT
18.85%
Augusta

Page 3

1.2 The Management Agreement
Pursuant to the Management Agreement, Augusta will be the sole and exclusive provider of management and other services to
NPT and its subsidiaries. The NPT Board will retain the right to approve or reject the acquisition of properties and other
material transactions. Furthermore, Augusta will be required to manage NPT in accordance with a budget approved by the NPT
Board each year.
Unless terminated by either party, the Management Agreement is open ended. At any time after five years, NPT may terminate
the Management Agreement, without cause, by consulting with Augusta and then giving Augusta six months' written notice. If
terminated in this manner, NPT must pay Augusta a ‘termination fee’ set to 3.8 times the average annual management fees
paid over the previous two years
1
.
Augusta may only assign the Management Agreement to a third party with NPT’s consent. If Augusta requests the assignment
of its rights and obligations under the Management Agreement, then NPT is required to act reasonably in considering the
request to assign; and would need to have regard to the experience, expertise and financial standing of the proposed assignee.
Augusta may sell the Management Agreement to a third party through a contested open market process, where the negotiated
purchase price would likely reflect the future earnings that the new manager could generate from the contract – although the
acquirer would need to be acceptable to NPT.
As part of entering into the Management Agreement, NPT will approve an ‘Investment Policy’, under which the business and
affairs of NPT are to be undertaken and managed. The investment policy includes that NPT will invest in properties that have
the following characteristics:
• Functional warehouse/logistics assets with close proximity to major infrastructure
• CBD or fringe commercial office opportunity
• Select retail properties, where underpinned by clearly defined demand analysis
• Strong tenant covenants but with short WALTs
2

• Well located assets underpinned by land value.
A copy of the Management Agreement can be found on NPT’s website (www.npt.co.nz).
1.3 Assessment of the Proposed Externalisation for NPT Shareholders
Our assessment of the merits of the Proposed Externalisation for NPT shareholders is set out in Section 7 and summarised
below:
• Assuming NPT remains at its present scale, the Proposed Externalisation is expected to result in incremental earnings, as
the fees paid under the management agreement are projected to be less than the costs NPT currently incurs as an
internally managed entity.
• We have assessed the value to NPT of the Proposed Externalisation at $10.1 million, assuming the Company does not
change in scale. This value includes the initial $4.5 million consideration, plus incremental earnings, less one-off costs
associated with the externalisation.
• We consider the revenue multiple being paid by Augusta to acquire the management rights, at 3.8 times revenue, is
reasonable when considering other comparable transactions for management rights.
• The management fees paid to Augusta will depend on NPT’s scale, which will incentivise Augusta to grow NPT’s property
portfolio. This may benefit NPT’s shareholders, as small LPV’s appear to trade at a discount, relative to the value of their
assets, when compared to their peers.
• The alternative options available to NPT include continuing with the status quo or the disposal of its remaining properties
and liquidation of the Company.
− Status Quo – based on its historical performance, if NPT continues with the status quo, then we consider it likely that
the NPT share price will continue to trade at a discount to the underlying net tangible assets in the short to medium
term, because it has not shown a track record of being able to grow its asset base and at its existing size it has a high
cost structure.

1
The Termination Fees is set to 3.8 times the cumulative ‘Fund Management Fees’, ‘Property Management Fees’, ‘Leasing Fees’ for the
immediately preceding two years before the date of notice of termination, divided by two.
2
Weighted average lease terms

Page 4

− Disposal of remaining properties – we understand from NPT management that there may be challenges to achieving
selling prices at book value, for NPT’s remaining properties, under a liquidation scenario. Based on discussions with
NPT management, the possible realisations from a liquidation scenario may be in the range of 64.3–67.4 cents per
share.
• By undertaking the Proposed Externalisation, NPT will gain access to Augusta’s expertise in searching for and investigating
potential property acquisitions. This may allow NPT to increase the scale of its investment portfolio, without incurring the
significant upfront fixed costs associated with having its own dedicated investment team.
• The Proposed Externalisation offers NPT shareholders some level of ‘optionality’. If Augusta enhances the value of NPT’s
shares, which it is incentivised to do, then this will be positive for NPT shareholders and likely be value accretive relative to
a liquidation scenario. However, if Augusta fails to enhance the value of NPT, then:
− NPT will receive $4.5 million in upfront cash consideration. From this amount NPT would need to pay redundancy
costs for its current employees, but this would avoid NPT then needing to pay redundancy costs at a later date.
− NPT may terminate the Management Agreement after five years, at which point NPT shareholders will have received
any dividends in the intervening years and could then either change its management structure or dispose of any
remaining investment properties and liquidate the Company. Prior to the end of five years, NPT Board could also
place NPT into voluntary liquidation, which would also result in the disposal of any remaining investment properties.
− If NPT terminates the Management Agreement, as set out above, then NPT will need to pay Augusta a one-off
Termination Fee, plus any unpaid Performance Fees which have accrued.
1.4 Conclusion Regarding the Fairness of the Proposed Externalisation
Taking all the key elements of the Proposed Externalisation into account, we conclude that the consideration and terms and
conditions are fair to the NPT shareholders not associated with Augusta.
• The Proposed Externalisation is expected to result in an initial cash receipt and ongoing enhanced earnings to NPT.
• The revenue multiple paid by Augusta to acquire the management rights, and payable to terminate the Management
Agreement, are broadly consistent to the multiples implied by comparable transactions.
• The terms of the management agreement, which are summarised on page 21, appear broadly in line with the terms and
conditions for other managed entities.
• Augusta is incentivised to grow NPT’s property portfolio. Assuming transactions are on commercial terms, this may result
in an increase in the value of NPT, due to its greater scale. The NPT Board will retain the right to approve or reject the
acquisition of properties and other material transactions.
• NPT has the right to terminate the Management Agreement, after a period of five years.
1.5 Other
The sources of information, to which we have had access and upon which we have relied, are set out in Appendix 1 of this
report.
This report should be read in conjunction with the statements and declarations set out in Appendix 2 regarding our
independence, qualifications, general disclaimer and indemnity and the restrictions upon the use of this report.
References to ‘$’, dollars or cents are to New Zealand dollars, unless specified otherwise. References to financial years or ‘FY’
mean NPT’s financial year end 31 March unless specified otherwise.
Please note, tables may not add due to rounding.

Page 5

2 Scope of the Report
2.1 Regulatory Requirements
NZX Listing Rule Requirements
The Proposed Externalisation is subject to Rule 9.2 of the NZX Listing Rules, which pertains to transactions with related parties.
Pursuant to Listing Rule 9.2.1, NPT shall not enter into a Material Transaction with a Related Party unless that transaction is
approved at a meeting of shareholders by an ordinary resolution.
The Proposed Externalisation qualifies as a ‘Material Transaction’ under Listing Rule 9.2.2(e). This rule captures transactions
where NPT obtains services, for which the actual gross cost to NPT in any financial year is likely to exceed 1% of its average
market capitalisation.
3

Augusta qualifies as a ‘Related Party’ under Listing Rule 9.2.3(b), which captures entities that, at the time of the Material
Transaction, hold 10% or more of the NPT Shares.
Listing Rule 9.2.5(b) requires that the notice of meeting to consider the ordinary resolution referred to above must be
accompanied by an Appraisal Report, prepared by an independent adviser to opine on the fairness of the transaction to
shareholders not associated with the related parties.
Declarations
Pursuant to Listing Rule 1.7.2, we state that:
1. In our opinion, the consideration and the terms and conditions of the Proposed Externalisation are fair to shareholders of
NPT other than those associated with Augusta. The grounds for this opinion are set out in this report.
2. In our opinion, the shareholders entitled to vote on the resolution in relation to the Proposed Externalisation will be
provided with sufficient information to understand all relevant factors and on which to make an informed decision. The
two main sources of information are this report and the Notice of Meeting.
3. We confirm that we have been provided with all of the information that we consider is required for the purposes of
preparing this report.
4. The material assumptions on which our opinion has been based are clearly set out in the body of this report.
2.2 Basis of Assessment and Evaluation
The content required to be included in the Appraisal Report pursuant to the NZX Listing Rules is clearly set out in rule 1.7.2.
Among other things, the Appraisal Report must state whether or not the reporter considers that the terms and conditions of the
Proposed Externalisation are ‘fair’ to the Company’s shareholders other than those shareholders (if any) that may be
associated with the related parties to the transaction. Although there is no statutory definition of ‘fair’ or any specific guidance
provided in the NZX Listing Rules, our assessment of the fairness of the Proposed Externalisation is based on a consideration
of:
• The consequences for the existing shareholders if the Proposed Externalisation is approved or not approved; and
• The overall terms of the Proposed Externalisation.
KordaMentha has evaluated the Proposed Externalisation by reviewing the following factors:
• The revenue multiples which other management agreements have been transacted, in comparison to the multiple implied
by the $4.5 million to be paid to NPT in consideration for the management rights; and
• Other considerations that may be necessary for shareholders to make an informed decision in relation to the Proposed
Externalisation.

3
The fees payable to Augusta under the Management Agreement are summarised on page 7.

Page 6

3 The Proposed Externalisation
3.1 Overview
Under the Proposed Externalisation, Augusta will pay NPT a one-off amount of $4.5 million to acquire the right to manage NPT
under the terms of the Management Agreement.
The payment of $4.5 million represents a multiple of 3.8 times the FY18 pro forma fees
4
.
3.2 The Management Agreement
As part of the Proposed Externalisation, NPT and Augusta will enter into the ‘Management Agreement’, pursuant to which NPT
will appoint Augusta as the sole and exclusive provider of management and other services to NPT and its subsidiaries.
A copy of the proposed Management Agreement can be found on NPT’s website (www.npt.co.nz).
Responsibilities
Augusta’s responsibilities are set out at Schedule 2 of the Management Agreement, which includes:
• Preparation or procuring the preparation of reports or other information, as required by the Board in respect of NPT’s
operations or the performance of Augusta, as the manager.
• Preparing all reports and announcements required by the NZX Listing Rules, and otherwise assist NPT to comply with the
NZX Listing Rules.
• Ensuring collection of rents and compliance by lessees of NPT’s properties.
• Preparing draft annual budgets for NPT, and presenting those budgets to the Board for consideration.
• Managing NPT in accordance with the annual budget, which has been approved by the Board.
• Advising the Board of any property acquisition and/or realisation opportunities as they arise.
• Arranging funding for NPT and managing the Company’s financial affairs.
• Arranging for annual valuations of NPT’s properties.
• Ensuring payment of permissible outgoings and recoveries (where possible) from lessees.
• Managing negotiations of rent reviews, variations of leases and lease renewals.
• Managing any development projects and maintenance on the properties.
• Ensuring compliance by NPT with all relevant rules and regulations.
• General administrative and reporting duties.

4
Includes Fund Management Fees, Property Management Fees and Leasing Fees. FY18 Pro Forma fees assumes that Augusta had managed
NPT for a 12-month period starting 1 April 2017.

Page 7

Management Fees
Table 3.1 summarises the key fees payable to Augusta under the Management Agreement, and estimates the fees which may
have been payable in FY18 had Augusta had the management rights throughout FY18.
Table 3.1: Summary fees included in the Management Agreement
Fee Type Description
FY18
Pro
Forma Fees
Fund Management Fee 0.50% of total assets up to $500 million in assets; plus, a further amount at
0.40% for any amount more than $500 million
919
Property Management Fee 1.5% of the gross income for NPT’s properties 250
Leasing Fee
5
New leases – 12% to 15% of annual rental income for new leases
On renewal – 50% of the fee payable for a new lease, as above
The Leasing Fee is not payable to Augusta if a fee or commission is payable
to an external party for the leasing
25

Acquisition Fee 1.0% of the purchase price of acquisitions –
Development Management Fee 3.5% of development costs, plus agreed fees for any proposed development –
Source: Management Agreement and NPT estimates
The Fund Management Fees would replace costs associated with NPT’s internal management team. The property
Management Fee would largely replace fees currently being paid to third parties. The Leasing Fees payable to Augusta are
expected to be low, as NPT currently has third parties undertake most of its leasing activities and NPT expects this will likely
continue under Augusta.
In addition to the fees shown in Table 3.1, NPT will incur ‘Legal Administration Fees’ and ‘Additional Services Fees’ at agreed
hourly rates. Legal Administration Fees are payable for documents such as sale and purchase agreements and agreements to
lease; and Additional Services Fees are payable for other services that may from time to time be required.
Performance Fees
In addition to the management fees, Augusta will be entitled to a performance fee if the total shareholder return (TSR) to NPT
shareholders exceeds a benchmark return:
• The performance fee is calculated based on returns accruing to NPT’s Shareholders each quarter.
• Augusta is entitled to be paid 10% of the amount by which the TSR exceeds the return on the S&P/NZX All Real Estate
Index, with the quarterly payment capped at 0.125% of NPT’s market capitalisation (0.5% of market capitalisation per
annum).
• Where the payment has been capped, the excess is carried forward to subsequent quarters, for a maximum period of eight
quarters (two years). If the TSR is less than the benchmark index for a quarter, then the deficit is also carried forward and
taken into account when calculating the entitlement to performance fees in subsequent quarters.
The TSR is calculated using the same methodology as the benchmark index, except that the closing price for a quarter will be
the volume weighted average price (VWAP) of NPT’s shares traded on the NZX Main Board during normal market hours in the
last five trading days of the quarter; and the opening price for the following quarter is the VWAP price from the prior quarter.
Term and Termination
Unless terminated by either party, the Management Agreement is open ended.
At any time after five years, NPT may terminate the Management Agreement, without cause, by first entering into consultation
with Augusta and on completion of that reasonable consultation, by giving Augusta not less than six months' written notice (or
as otherwise agreed between the parties in writing). Termination in this manner is subject to being approved by an ordinary
resolution of NPT shareholders. If terminated in this manner, NPT must pay Augusta a termination fee calculated as 3.8 times

5
The pro forma leasing fees are estimated based on NPT and Augusta’s current business models, under which both largely externalise leasing
activities to third party leasing experts. Under such an arrangement, NPT will pay leasing fees to the third party, rather than Augusta. It is
expected that leasing fees will be at similar rates to those currently paid by NPT to third parties.

Page 8

the aggregate ‘Fund Management Fees’ plus ‘Property Management Fees’ plus ‘Leasing Fees’ for the immediately preceding
two years before the date of notice of termination; with the aggregate divided by two (annualised).
NPT may also terminate the Management Agreement, without paying the termination fee, under the following circumstances:
• Augusta becomes insolvent, or otherwise has a liquidator, receiver or administrator appointed.
• Augusta commits a material breach of the Management Agreement and fails to remedy the breach within twenty working
days after receipt of written notice from NPT requiring Augusta to remedy the breach.
In the event of termination, if there is a surplus Performance Fee being carried forward into future quarters – due to prior
outperformance exceeding the Performance Fee cap – then NPT will also need to pay the outstanding performance fee
balance when terminating the Management Agreement. This may exceed the regular fee cap of 0.125% per quarter and may
result in performance fees that would normally be excluded (due to passing the two-year rollover threshold for excess
performance fees).
Other matters
Augusta may only assign the Management Agreement to a third party with NPT’s consent. If Augusta requests the assignment
of its rights and obligations under the Management Agreement, then NPT is required to act reasonably in considering the
request to assign; and would need to have regard to the experience, expertise and financial standing of the proposed assignee.
Augusta may sell the Management Agreement to a third party through a contested open market process, where the negotiated
purchase price would likely reflect the future earnings that the new manager could generate from the contract – although the
acquirer would need to be acceptable to NPT.
3.3 ‘Yield Plus Growth’ investment strategy
As part of entering into the Management Agreement, NPT will approve an ‘Investment Policy’, under which the business and
affairs of NPT are to be undertaken and managed. We summarise the investment policy below:
Investment objectives
NPT’s objective is to provide investors with an investment in a diversified portfolio of New Zealand commercial property with a
‘Yield Plus Growth’ investment strategy.
NPT will invest in properties that have the following characteristics:
• Functional warehouse/logistics assets with close proximity to major infrastructure
• CBD or fringe commercial office opportunity
• Select retail properties, where underpinned by clearly defined demand analysis
• Strong tenant covenants but with short WALTs
• Well located assets underpinned by land value.
The following key investment criteria will also be applied to any acquisition targets:
• Assets will be acquired for their ability to contribute to a stabilised blended WALT of 5.0 years
• Active assets with the ability to enhance the asset value in the short to medium term which ultimately provide a
demonstrable pathway to delivering the target industry outperformance benchmarks on a risk adjusted basis. These return
hurdles will be adjusted to reflect market conditions from time to time.
Investment strategy
NPT will maintain this ‘Yield Plus Growth’ investment strategy, targeting higher returns than typically available to investors in
listed entities that are invested only in low risk CBD major buildings through a more diversified property portfolio.
NPT will invest in a nationwide diversified portfolio of properties, spread across the main centres north of Taupo but will not
preclude the main centres of Wellington and Christchurch or selected provincial exposures.

Page 9

NPT will target superior, risk-adjusted returns, in keeping with its ‘Yield Plus Growth’ investment strategy, through:
• Careful selection of assets that are higher-yielding or have the potential to be high yielding.
• Adding value through remixes, refurbishments and physical improvements.
• Avoidance of hotly contested, lower yielding, premium assets.
The investment goal is to target long-term total returns greater than the benchmark return while maintaining a strong balance
sheet, with a long-run average debt to assets ratio of between 35% and 42%, subject to fluctuation over the short term.
We consider that, over the long term, the value-add strategy is likely to be more volatile than an investment vehicle focused on
premium commercial space, but may also earn a commensurately higher investment return.
3.4 Rationale for acquiring NPT management rights
Augusta has used the ‘Yield Plus Growth’ strategy for its Value Add Fund No.1. This fund was a closed end fixed term
wholesale fund, which acquired five commercial/industrial properties in Auckland that had ‘value-add’ characteristics. Augusta
has now unconditionally sold three of the properties, with a fourth under contract.
Augusta advises that a key reason for acquiring the NPT management rights is that, while it purchased five value-add
properties for Value Add Fund No.1, it is generally easier to acquire such properties one at a time, as they often require a quick
transaction. For this reason, Augusta considers an open-ended investment vehicle (such as NPT) more suitable when
managing and acquiring properties with ‘value-add’ characteristics.
Augusta also considers there to be space in the market for a LPV focused on a Yield Plus Growth strategy, as the existing LPVs
tend to focus on prime commercial buildings, which generally produce a lower, albeit with more certain, return.

Page 10

4 Overview of NPT
4.1 Background and Property Portfolio
NPT was established in 1994 and listed on the NZX in 1996. NPT was initially an externally managed property trust, it
internalised its management and incorporated as a company in April 2011.
NPT owns a relatively small investment portfolio of five retail and industrial properties in Auckland, Christchurch and Hastings.
It is currently contracted to sell two properties, with settlement in April and July 2018. The remaining three properties are
summarised in Table 4.1 and have an aggregate valuation, as at 31 March 2017, as follows:
Table 4.1: Portfolio summary – excluding properties contracted to be sold
Property Location Type Major Tenants
Valuation
($ million)
Net Lettable
Area (sq.m)
Occupancy

(%)
WALT
(years)
Eastgate Shopping
Centre
Linwood,
Christchurch
Retail The Warehouse,
Warehouse Stationery,
Countdown, Lincraft,
Linwood Library and
The Loft
59.5 26,870 96.2
4.5
The Roskill Centre Mt Roskill,
Auckland
Retail The Warehouse, ANZ,
ASB, Stoddard Road
Pharmacy, Snap
Fitness and Westpac
36.0 8,412 100.0
4.9
Heinz Watties
National Distribution
Centre
Hastings,
Hawkes Bay
Industrial Heinz Wattie’s and
Tomoana Warehousing
27.0 60,059 100.0
9.8
Group Total 122.5 95,341 98.9 5.8
Source: NZX market releases and valuations prepared by Jones Lang LaSalle
In addition to the properties shown in Table 4.1, NPT currently owns:
• The ‘AA Centre’ in Auckland, which is subject to an unconditional sale for $47 million, with settlement in July 2018
• ‘Print Place’ in Christchurch, which is subject to an unconditional sale for $8.25 million, with settlement in March 2018.
All properties have been valued by Jones Lang LaSalle (JLL), as at 31 March 2017. The three properties which are not being
sold are detailed below:
4.1.1 Eastgate Shopping Centre
Eastgate Shopping Centre is in Christchurch and represents 34% of NPT’s portfolio by value
6
.
Eastgate Shopping Centre is based in Linwood which is a suburb of Christchurch that was significantly impacted by the
Canterbury earthquakes and suffered subsequent depopulation. The 2013 New Zealand Census also indicated that Linwood
was the area with the lowest median household income in Christchurch
7
.
This property has a supermarket (Countdown) and a large department store (The Warehouse) as major tenants. Other tenants
include six large format stores and 45 specialty stores. A library, medical centre and offices have recently been completed on
the first floor of the shopping centre and a KFC restaurant has recently been added to the site, adjacent to the main centre.
The distribution of tenants, by gross rent, is illustrated at Figure 4.1.

6
Proportion of NPT’s portfolio has been measured prior to the sale of AA Centre and Print Place. Following the sale of these properties,
Eastgate Shopping Centre will represent 49% of the residual property portfolio.
7
Source: Statistics New Zealand, 2013 Census of Population and Dwellings.

Page 11

Figure 4.1: Tenant occupancy by gross rental

Source: JLL Valuation Report 31 March 2017
The WALT is 4.5 years (weighted based on income).
The Warehouse lease expires in May 2027. Large department stores, such as The Warehouse, generate significant foot traffic
for other retailers sharing the same shopping centre, by attracting customers from outside the immediate catchment area,
partly from their extensive advertising campaigns. The Warehouse having a long tenancy exceeding nine years makes
Eastgate Shopping Centre more attractive to some other retailers which can utilise the foot traffic generated by The
Warehouse.
The Countdown lease expires in December 2018. The trading performance of the Countdown store has deteriorated in the two
years prior to 31 March 2017
8
and as such the terms of the lease renewal presents a risk to NPT – albeit JLL allowed for this
risk in its valuation. We understand from NPT that this deterioration was largely due to the re-opening of a Countdown store in
Ferrymead
9
and that the sales at Eastgate Shopping Centre Countdown have subsequently stabilised.
We understand that there may be downward pressure on the performance of Eastgate Shopping Centre, due to:
• National retailers focusing on prime locations and an online presence which has reduced demand for stores in secondary
centres.
• The shopping centre is not fully tenanted with vacant space of 1,034 square metres reflecting 3.85% of the total gross
lettable area or ten tenancies. We understand there is currently limited interest from potential tenants for these units.
• There was damage to the buildings in the Canterbury earthquakes, and while the damage has been remediated the layout
is smaller and less attractive than it was prior to the earthquakes.
• Several new retail precincts have recently opened in the Christchurch CBD – which is approximately five kilometres from
the Eastgate Shopping Centre. For example, a new retail precinct with 12,000 sqm of retail and hospitality space called
‘The Crossing’ opened in the Christchurch CBD in September 2017 and several other retail developments are expected to
be completed over the next twelve months.
4.1.2 The Roskill Centre
The Roskill Centre, also referred to as 22 Stoddard Road, is in Auckland and represents 20% of NPT’s portfolio by value
10
.
The Roskill Centre lies approximately eight kilometres from the Auckland CBD. It has good exposure to Stoddard Road and the
recently completed SH20 extension to the rear of the site.
The Roskill Centre is an open air neighbourhood shopping centre with relatively large population catchment and limited
competition in the immediate area. It is also located in an area zoned for further intensification of housing under the Auckland
Unitary Plan and thus the catchment population is projected to increase.

8
JLL Valuation Report, 31 March 2017
9
Ferrymead is close to Linwood, the suburb where Eastgate Shopping Centre is located.
10
Proportion of NPT’s portfolio has been measured prior to the sale of AA Centre and Print Place. Following the sale of these properties,
The Roskill Centre will represent 29% of the residual property portfolio.
Specialties
35%
The
Warehou s e
21%
Countdown
19%
Other Large
Format
14%
Other
11%

Page 10

4 Overview of NPT
4.1 Background and Property Portfolio
NPT was established in 1994 and listed on the NZX in 1996. NPT was initially an externally managed property trust, it
internalised its management and incorporated as a company in April 2011.
NPT owns a relatively small investment portfolio of five retail and industrial properties in Auckland, Christchurch and Hastings.
It is currently contracted to sell two properties, with settlement in April and July 2018. The remaining three properties are
summarised in Table 4.1 and have an aggregate valuation, as at 31 March 2017, as follows:
Table 4.1: Portfolio summary – excluding properties contracted to be sold
Property Location Type Major Tenants
Valuation
($ million)
Net Lettable
Area (sq.m)
Occupancy
(%)
WALT
(years)
Eastgate Shopping
Centre
Linwood,
Christchurch
Retail The Warehouse,
Warehouse Stationery,
Countdown, Lincraft,
Linwood Library and
The Loft
59.5 26,870 96.2 4.5
The Roskill Centre Mt Roskill,
Auckland
Retail The Warehouse, ANZ,
ASB, Stoddard Road
Pharmacy, Snap
Fitness and Westpac
36.0 8,412 100.0 4.9
Heinz Watties
National Distribution
Centre
Hastings,
Hawkes Bay
Industrial Heinz Wattie’s and
Tomoana Warehousing
27.0 60,059 100.0 9.8
Group Total 122.5 95,341 98.9 5.8
Source: NZX market releases and valuations prepared by Jones Lang LaSalle
In addition to the properties shown in Table 4.1, NPT currently owns:
• The ‘AA Centre’ in Auckland, which is subject to an unconditional sale for $47 million, with settlement in July 2018
• ‘Print Place’ in Christchurch, which is subject to an unconditional sale for $8.25 million, with settlement in March 2018.
All properties have been valued by Jones Lang LaSalle (JLL), as at 31 March 2017. The three properties which are not being
sold are detailed below:
4.1.1 Eastgate Shopping Centre
Eastgate Shopping Centre is in Christchurch and represents 34% of NPT’s portfolio by value
6
.
Eastgate Shopping Centre is based in Linwood which is a suburb of Christchurch that was significantly impacted by the
Canterbury earthquakes and suffered subsequent depopulation. The 2013 New Zealand Census also indicated that Linwood
was the area with the lowest median household income in Christchurch
7
.
This property has a supermarket (Countdown) and a large department store (The Warehouse) as major tenants. Other tenants
include six large format stores and 45 specialty stores. A library, medical centre and offices have recently been completed on
the first floor of the shopping centre and a KFC restaurant has recently been added to the site, adjacent to the main centre.
The distribution of tenants, by gross rent, is illustrated at Figure 4.1.

6
Proportion of NPT’s portfolio has been measured prior to the sale of AA Centre and Print Place. Following the sale of these properties,
Eastgate Shopping Centre will represent 49% of the residual property portfolio.
7
Source: Statistics New Zealand, 2013 Census of Population and Dwellings.

Page 11

Figure 4.1: Tenant occupancy by gross rental

Source: JLL Valuation Report 31 March 2017
The WALT is 4.5 years (weighted based on income).
The Warehouse lease expires in May 2027. Large department stores, such as The Warehouse, generate significant foot traffic
for other retailers sharing the same shopping centre, by attracting customers from outside the immediate catchment area,
partly from their extensive advertising campaigns. The Warehouse having a long tenancy exceeding nine years makes
Eastgate Shopping Centre more attractive to some other retailers which can utilise the foot traffic generated by The
Warehouse.
The Countdown lease expires in December 2018. The trading performance of the Countdown store has deteriorated in the two
years prior to 31 March 2017
8
and as such the terms of the lease renewal presents a risk to NPT – albeit JLL allowed for this
risk in its valuation. We understand from NPT that this deterioration was largely due to the re-opening of a Countdown store in
Ferrymead
9
and that the sales at Eastgate Shopping Centre Countdown have subsequently stabilised.
We understand that there may be downward pressure on the performance of Eastgate Shopping Centre, due to:
• National retailers focusing on prime locations and an online presence which has reduced demand for stores in secondary
centres.
• The shopping centre is not fully tenanted with vacant space of 1,034 square metres reflecting 3.85% of the total gross
lettable area or ten tenancies. We understand there is currently limited interest from potential tenants for these units.
• There was damage to the buildings in the Canterbury earthquakes, and while the damage has been remediated the layout
is smaller and less attractive than it was prior to the earthquakes.
• Several new retail precincts have recently opened in the Christchurch CBD – which is approximately five kilometres from
the Eastgate Shopping Centre. For example, a new retail precinct with 12,000 sqm of retail and hospitality space called
‘The Crossing’ opened in the Christchurch CBD in September 2017 and several other retail developments are expected to
be completed over the next twelve months.
4.1.2 The Roskill Centre
The Roskill Centre, also referred to as 22 Stoddard Road, is in Auckland and represents 20% of NPT’s portfolio by value
10
.
The Roskill Centre lies approximately eight kilometres from the Auckland CBD. It has good exposure to Stoddard Road and the
recently completed SH20 extension to the rear of the site.
The Roskill Centre is an open air neighbourhood shopping centre with relatively large population catchment and limited
competition in the immediate area. It is also located in an area zoned for further intensification of housing under the Auckland
Unitary Plan and thus the catchment population is projected to increase.

8
JLL Valuation Report, 31 March 2017
9
Ferrymead is close to Linwood, the suburb where Eastgate Shopping Centre is located.
10
Proportion of NPT’s portfolio has been measured prior to the sale of AA Centre and Print Place. Following the sale of these properties,
The Roskill Centre will represent 29% of the residual property portfolio.
Specialties
35%
The
Warehou s e
21%
Countdown
19%
Other Large
Format
14%
Other
11%

Page 12

The Roskill Centre has The Warehouse as the anchor tenant, with other tenants including two large format stores and
18 specialty stores, as summarised below in Figure 4.2. The Roskill Centre is also adjoined by a fast food restaurant
(McDonalds) and a supermarket (New World), albeit these are under separate ownership.
Figure 4.2: Tenant Occupancy by Gross Rental

Source: JLL Valuation Report 31 March 2017
The WALT is 4.9 years (weighted based on income). The Roskill Centre is approaching the first cycle of lease expiries for
specialty retailers since its construction in 2013.
The Warehouse lease expires in January 2025 and underpins the relative attractiveness of the site to specialty retailers.
The Roskill Centre is currently fully occupied and has had relatively low tenant turnover with demand for space remaining
strong when vacancies do arise. JLL considers that management will have an opportunity to refine the tenancy mix and
potentially restructure leases for longer terms during the next cycle of tenant lease renewals.
Overall, JLL considers that The Roskill Centre would appeal to a range of investors.
4.1.3 Heinz Watties National Distribution Centre
The Heinz Watties National Distribution Centre is a substantial industrial complex in Hastings. It represents 15% of NPT’s
portfolio by value
11
.
Heinz Watties Limited (Heinz Watties), a global food and beverage manufacturer, has leased 97% of the lettable area.
Tomoana Warehousing, a transport and warehousing company, leases the residual space.
The Heinz Watties lease expires in April 2027 – with a WALT of approximately nine years.
JLL considers that location to be important to Heinz Watties, due to its local production in Hawkes Bay, the port and rail
connections, and also Heinz Watties owns and occupies an adjoining site.
The value of the property is underpinned by the long-term leases, to a large international tenant, with mechanical rental growth
(at CPI) over the lease term.
Potential risks associated with the property, identified by JLL, include:
• Limited additional land on-site for further development
• The scale of the property makes alternative uses potentially difficult to find in the future
• The potential for Heinz Watties relocating its operations in the future.

11
Proportion of NPT’s portfolio has been measured prior to the sale of AA Centre and Print Place. Following the sale of these properties,
the Heinz Watties National Distribution Centre will represent 20% of the residual property portfolio.
Specialties
an d Other
49%
The
Warehou s e
38%
Other Large
Format
13%

Page 13

4.2 Financial Performance
Table 4.2 summarises NPT’s financial performance between FY15 and FY17; and NPT’s ‘Status Quo’ forecast for FY18, which
is based on NPT continuing to operate as an internally managed entity:
Table 4.2: Financial performance ($ 000)

FY15
Actual
FY16
Actual
FY17
Actual
FY18
Status Quo

Gross rental income 16,521 16,977 17,152 17,132
Direct property expenses (5,059) (5,405) (5,276) (5,232)

Net Rental Income 11,462 11,572 11,876 11,900

Other income 13 3 30 4
Administration expenses (2,112) (2,318) (2,612) (2,339)

Earnings Before Interest and Tax 9,363 9,257 9,294 9,565

Net finance costs (2,404) (2,448) (2,726) (2,810)

Net Profit Before Tax and Other Items 6,959 6,809 6,568 6,755

Other gains and losses:

Unrealised fair value movements on properties 1,187 3,160 (1,651)
Unrealised fair value movements on interest rate swaps (829) (677) 732
Net gain/(loss) on sale of properties and other fixed assets 1 – (87)
Transaction costs – – (1,339)

Net Profit Before Tax 7,318 9,292 4,223
Source: NPT Annual Reports and management accounts
Some key observations are:
• Gross rental income grew at a compound annual growth rate (CAGR) of 1.9% between FY15 and FY17. This is below the
long run growth rate of 2.2%–2.7% p.a. which JLL estimate for the sector
12
.
• Due to its size and relatively flat rental income, NPT’s earnings are relatively sensitive to small movements in its expenses.
• Administrative expenses increased between FY15 and FY17. The FY17 increase was largely due to costs associated with
the potential 2017 externalisation of NPT’s management to Kiwi Property, but were unable to be categorised as
‘Transaction Costs’. For this reason, NPT expects administration expenses to decline in FY18.
• Net finance costs increased in FY17 due to the higher level of bank borrowings. The borrowed funds were used on
development works at the Eastgate Shopping Centre and at the AA Centre.
• NPT often has material movements in its portfolio value due to revaluation gains and losses. This is relatively common
across most LPVs, as properties are typically valued annually.
• One off transaction costs of approximately $1.3 million were incurred in FY17 that related to investigating proposals put
forward by Kiwi Property, Augusta and other parties.

12
JLL Valuation Report as at 31 March 2017

Page 14

4.3 Financial Position
Table 4.3 summarises NPT’s financial position between 31 March 2015 and 31 December 2017:
Table 4.3: Financial position ($ 000)
Mar 15 Mar 16 Mar 17 Dec 17

Receivables and prepayments 966 750 1,078 863
Creditors, accruals and provisions (1,603) (3,759) (2,589) (6,440)
Net tax payable (17) (279) (296) (577)
Net working capital (excl. financing) (654) (3,288) (1,807) (6,154)

Investment properties 158,225 171,265 175,956 175,750
Property work in progress and other 3,034 559 2,217 5,390
Fixed assets 699 700 1,068 1,111
Deferred tax (3,159) (2,894) (2,972) (3,004)
Net operating assets 158,799 169,630 176,269 179,247

Cash and cash equivalents 2,549 3,101 2,030 1,403
Distribution payable to shareholders (1,295) – – –
Bank borrowings (41,000) (48,000) (58,500) (55,500)
Interest rate swaps and derivatives (974) (1,651) (919) (910)
Net cash/(debt) (40,720) (46,550) (57,389) (55,007)

Net assets 117,425 119,792 117,073 118,086

NTA per share 72.5 cps 74.0 cps 72.3 cps 72.9 cps
Source: NPT Annual Reports and management accounts
Table 4.4 below shows the changes to the book values of investment properties between 31 March 2015 and 31 March 2017.
The capitalised costs were largely due to development works undertaken at the Eastgate Shopping Centre and the AA Centre.
This was largely debt funded, with NPT’s bank borrowings increasing by $17.5 million in the two years to 31 March 2017.
Table 4.4: Movement in the value of Investment Properties ($ 000)

Mar 15 Mar 16 Mar 17
Opening balance 156,060 158,225 171,265
Capitalised costs 978 9,880 6,342
Revaluation of investment properties 1,187 3,160 (1,651)
Closing balance 158,225 171,265 175,956

NPT currently has 72.6 cents per share in NTA. NPT’s shares have traded at a discount to NTA over the two years to
31 March 2017. Over this period, NPT’s NTA was approximately 72.3–74.0 cps, whereas its share price has tended to trade
around 60–65 cents, with a peak at 70 cents in mid-FY17, when Augusta initial purchased NPT shares (refer to page 16).

Page 15

4.4 Capital Structure and Ownership
As at 31 January 2018, NPT had 161,920,433 shares on issue and more than 1,700 registered shareholders. NPT’s shares
are largely held by custodial entities on behalf of a range of investors. The top five registered shareholders accounted for
63.2% of the total shares on issue.
Table 4.5: Five largest shareholders as at 31 January 2018
Holder name Shares held
Proportion of
shares on issue
New Zealand Central Securities 62,830,302 38.80%
Augusta Capital Limited 30,528,933 18.85%
Forsyth Barr Custodians Limited 4,374,496 2.70%
Investment Custodial Services 2,796,109 1.73%
FNZ Custodians Limited 1,748,647 1.08%
Top five shareholders 102,278,487 63.17%
Other shareholders 59,641,946 36.83%
Total 161,920,433 100.00%
Source: NPT Management
Table 4.6 summarises the substantial shareholders in NPT
13
as at 31 January 2018, based on the latest substantial product
holder notices.
Table 4.6: Substantial Shareholders as at 31 January 2018
Holder name Shares held
Proportion of
shares on issue
Augusta Capital Limited 30,528,933 18.85%
Salt Funds Management Limited 25,556,866 15.78%
Westpac Banking Corporation 20,874,406 12.90%
Accident Compensation Corporation 13,628,852 8.42%
ANZ New Zealand Investment Limited 12,029,968 7.43%
Source: Substantial product holder notices
The largest shareholder is Augusta, who owns 18.85% of the NPT shares on issue.
NPT advises that the shares held by Westpac Banking Corporation are also included in the Salt Funds Management disclosure.
Based on this, we estimate that approximately 50.5% of the total shares on issue are held by substantial product holders.

13
S ubstantial shareholders are those entities which have an interest in 5% or more in th e NPT shares on issue.

Page 16

4.5 Share Price Performance and Liquidity
Figure 4.3 illustrates the share price and volume for NPT shares between 1 April 2013 to 31 January 2018:
Figure 4.3: NPT’s share price and volume

Source: Capital IQ
NPT’s share price has traded within a range between 55 cents and 70 cents between 1 April 2013 and 31 January 2018.
The share price has declined from approximately 69 cents in September 2016 (when Augusta purchased its first parcel of
shares) to 60 cents as at 31 January 2018. Over this period, there has been considerable uncertainty as to NPT’s future
strategy, NPT has considered multiple options for externalising its management and there has been some disagreement
among NPT shareholders as to who would be best to manage NPT.
The recent sale announcements of the AA Centre and Print Place have not resulted in any material share price movements,
which implies that the prices achieved were in line with market expectations.
Table 4.7: VWAP and volume to 31 January 2018

Share
Price Low
Share
Price High VWAP
Volume
(million)
Proportion of
Issued Capital
One month 59.5 cents 64.0 cents 60.6 cents 3.2 2.0%
Three months 58.5 cents 64.0 cents 59.9 cents 7.9 4.9%
Twelve months 57.0 cents 64.5 cents 61.7 cents 44.1 27.2%
Source: Capital IQ
Approximately 44.1 million NPT shares traded in the 12 months ended 31 January 2018, at prices between 57.0 cents and
64.5 cents. This 12 month period included approximately 15.5 million shares purchased by Augusta in April 2017. Excluding
this purchase, the liquidity of NPT shares is generally low – although it has increased over the last six months.
0.0
8.0
16.0
24.0
32.0
40.0
0.40
0.45
0.50
0.55
0.60
0.65
0.70
0.75
FY14FY15FY16FY17FY18 YTD
Monthly volume (millions)
Dailiy VWAP ($)
Augusta
initially
purchases
9.3% of the
shares on
issue
Augusta
purchases
a further
9.6% of the
shares on
issue

Page 17

4.6 Dividends
Regular dividend payments are attractive to a range of institutional and retail investors that are focused on income generating
assets. NPT pays dividends quarterly, which is the same for most New Zealand LPVs.
Figure 4.4 shows NPT’s gross dividends, including imputation credits, since FY14.
Figure 4.4: NPT’s gross dividends (including imputation credits)
14

Source: NPT announcements
In FY14 and the first half of FY15, NPT’s dividends attached full imputation credits. More recently, NPT’s dividends have only
attached partial imputation credits. This is because NPT pays a relatively low amount of corporate tax, relative to its
distributable profit.
Since the first quarter of FY17, NPT has paid dividends at 0.9 cents per quarter, with a further 0.154 cents imputation credits.
Based on NPT’s current share price (60 cents), this represents a gross annual dividend yield of 7.0%, which compares
favourably to other LPVs.
The sustainability of NPT’s dividend payments in the long term will be reliant on it reinvesting the proceeds from AA Centre and
Print Place into other income generating assets.

14
The Q3 and Q4 dividends in FY18 have been estimated assuming dividends in these quarters are consistent with the prior six quarters.
1.111
1.060
1.029
1.0541.054
1.130
1.060
1.029
1.0541.054
1.111
0.925
1.029
1.054assumed
1.111
1.100
1.029
1.054assumed
0.0
1.0
2.0
3.0
4.0
5.0
FY14FY15FY16FY17FY18
Cents
per
share
Q4
Q3
Q2
Q1

Page 18

5 Listed Property Vehicles
5.1 New Zealand listed property
New Zealand’s listed property vehicles (LPVs) allow investors to gain an exposure to professionally managed investment grade
properties. LPVs give investors, who may otherwise be unable to participate in investment grade properties, the opportunity to
receive the benefits of portfolio diversification from a range of property investments.
LPVs have traditionally been viewed as a defensive investment, combining a yield from regular distributions with the liquidity
achieved from being listed.
Table 5.1 summarises the nine LPVs that are listed on the NZX
15
. Assets Under Management (AUM) and Market Capitalisation
(Market Cap) measure the scale of LPVs. Market price relative to net tangible assets (P/NTA) measures the relative premium
or discount to which the LPV trades relative to its underlying assets. The weighted average lease term (WALT)
16
is an
important metric, as a longer average lease profile generally represents a protection against short-term changes in the leasing
market.
Table 5.1: LPVs listed on the NZX as at 31 January 2018
Entity Sector Management
AUM
($ million)
Market Cap

($ million)
P/NTA
(ratio)
WALT
(years)
Kiwi Property Group Retail, Office Internal 3,063 1,960 1.00x 5.6
Goodman Property Industrial, Office External 2,314 1,751 1.04x 5.8
Precinct Properties Office External 2,045 1,599 1.06x 8.7
Vital Healthcare Health External 1,469 947 1.04x 17.7
Argosy Property Office, Industrial, Retail Internal 1,464 885 1.01x 5.6
Property For Industry Industrial Internal 1,096 833 1.07x 4.8
Stride Property Retail, Industrial, Office Internal 884 650 1.05x 4.9
Investore Property Retail External 663 377 0.93x 14.3
NPT Retail, Industrial Internal 181 97 0.83x 5.8
Source: Capital IQ, Annual Reports
Four of the nine LPVs listed on the NZX are externally managed. The external management does not appear to have a strong
correlation with either the LPVs relative size or their P/NTA.
Except for Investore Property and NPT, LPVs listed on the NZX currently trade at or at a premium to their NTA. Both Investore
and NPT are relatively small in terms of their market capitalisation, which suggests that investors view scale favourably in the
LPV sector.
The LPV sector and asset values within the sector are affected by:
• General economic conditions
• Interest rates
• Growth in sectors of the economy that are relevant to the property types (e.g. retail, commercial, industrial)
• The supply of new property for lease
• Government and regulation.

15
We have not counted Augusta as a LPV because, while it does own some properties, it is in the process of selling its property investment
portfolio and is transitioning into a property management and syndication company.
16
The term WALT is sometimes also referred to as a ‘WALE’, being the Weighted Average Lease Expiry.

Page 19

5.2 LPV performance
Figure 5.1 shows the relative performance of the S&P New Zealand Property Index
17
, the wider NZX 50 Index and NPT over the
last four years. The returns shown are measured on a gross basis (i.e. assuming dividends are reinvested).
Figure 5.1: Relative shareholder returns (pre-tax)

Source: Capital IQ
NPT’s listed peers and the wider NZX market have delivered strong returns for shareholders over the last four years. We
consider this has been partly caused by the low interest rate environment leading to a lowering in the returns expected by
investors and an increase in the value of businesses.
Since 31 January 2014, the NZX Property Index has experienced a compound annual growth rate (CAGR) of 13.7%, while the
NZX 50 Index has experienced a CAGR of 14.2%.
NPT has generally underperformed its peers and the broader NZX equity market. We consider NPT’s lack of scale relative to its
peers, ownership of poorly performing assets and static earnings have contributed to its poor performance.
5.3 Property Management Structures
LPVs are either managed by an internal management team or by a separate external entity:
• Externally managed entities typically have no, or very limited, staff of their own and appoint a third party to undertake
management of the property portfolio in return for management fees. The directors of an externally managed entity will
typically monitor the performance of the property manager against agreed performance targets; and authorise investment
decisions. Management fees typically include a base component and performance component.
• Internally managed entities are responsible for the management of property portfolios through directly employed staff.
These entities will often still outsource certain activities, such as leasing or property management.
New Zealand LPVs were historically established using unit trust structures, which required the appointment of an external
manager under the Unit Trusts Act. The small number of LPVs initially listed as companies were often also established with an
external manager.

17
The constituents of the S&P New Zealand Property Index are Kiwi Property, Goodman Property, Precinct Properties, Vital Healthcare, Argosy
Property, Stride Property and Investore Property.
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Jan- 14Jul- 14Jan- 15Jul- 15Jan- 16Jul- 16Jan- 17Jul- 17Jan- 18
Adjusted
index
NPT Gross ReturnNZX Property Index GrossNZX 50 Index Gross

Page 18

5 Listed Property Vehicles
5.1 New Zealand listed property
New Zealand’s listed property vehicles (LPVs) allow investors to gain an exposure to professionally managed investment grade
properties. LPVs give investors, who may otherwise be unable to participate in investment grade properties, the opportunity to
receive the benefits of portfolio diversification from a range of property investments.
LPVs have traditionally been viewed as a defensive investment, combining a yield from regular distributions with the liquidity
achieved from being listed.
Table 5.1 summarises the nine LPVs that are listed on the NZX
15
. Assets Under Management (AUM) and Market Capitalisation
(Market Cap) measure the scale of LPVs. Market price relative to net tangible assets (P/NTA) measures the relative premium
or discount to which the LPV trades relative to its underlying assets. The weighted average lease term (WALT)
16
is an
important metric, as a longer average lease profile generally represents a protection against short-term changes in the leasing
market.
Table 5.1: LPVs listed on the NZX as at 31 January 2018
Entity Sector Management
AUM
($ million)
Market Cap
($ million)
P/NTA
(ratio)
WALT
(years)
Kiwi Property Group Retail, Office Internal 3,063 1,960 1.00x 5.6
Goodman Property Industrial, Office External 2,314 1,751 1.04x 5.8
Precinct Properties Office External 2,045 1,599 1.06x 8.7
Vital Healthcare Health External 1,469 947 1.04x 17.7
Argosy Property Office, Industrial, Retail Internal 1,464 885 1.01x 5.6
Property For Industry Industrial Internal 1,096 833 1.07x 4.8
Stride Property Retail, Industrial, Office Internal 884 650 1.05x 4.9
Investore Property Retail External 663 377 0.93x 14.3
NPT Retail, Industrial Internal 181 97 0.83x 5.8
Source: Capital IQ, Annual Reports
Four of the nine LPVs listed on the NZX are externally managed. The external management does not appear to have a strong
correlation with either the LPVs relative size or their P/NTA.
Except for Investore Property and NPT, LPVs listed on the NZX currently trade at or at a premium to their NTA. Both Investore
and NPT are relatively small in terms of their market capitalisation, which suggests that investors view scale favourably in the
LPV sector.
The LPV sector and asset values within the sector are affected by:
• General economic conditions
• Interest rates
• Growth in sectors of the economy that are relevant to the property types (e.g. retail, commercial, industrial)
• The supply of new property for lease
• Government and regulation.

15
We have not counted Augusta as a LPV because, while it does own some properties, it is in the process of selling its property investment
portfolio and is transitioning into a property management and syndication company.
16
The term WALT is sometimes also referred to as a ‘WALE’, being the Weighted Average Lease Expiry.

Page 19

5.2 LPV performance
Figure 5.1 shows the relative performance of the S&P New Zealand Property Index
17
, the wider NZX 50 Index and NPT over the
last four years. The returns shown are measured on a gross basis (i.e. assuming dividends are reinvested).
Figure 5.1: Relative shareholder returns (pre-tax)

Source: Capital IQ
NPT’s listed peers and the wider NZX market have delivered strong returns for shareholders over the last four years. We
consider this has been partly caused by the low interest rate environment leading to a lowering in the returns expected by
investors and an increase in the value of businesses.
Since 31 January 2014, the NZX Property Index has experienced a compound annual growth rate (CAGR) of 13.7%, while the
NZX 50 Index has experienced a CAGR of 14.2%.
NPT has generally underperformed its peers and the broader NZX equity market. We consider NPT’s lack of scale relative to its
peers, ownership of poorly performing assets and static earnings have contributed to its poor performance.
5.3 Property Management Structures
LPVs are either managed by an internal management team or by a separate external entity:
• Externally managed entities typically have no, or very limited, staff of their own and appoint a third party to undertake
management of the property portfolio in return for management fees. The directors of an externally managed entity will
typically monitor the performance of the property manager against agreed performance targets; and authorise investment
decisions. Management fees typically include a base component and performance component.
• Internally managed entities are responsible for the management of property portfolios through directly employed staff.
These entities will often still outsource certain activities, such as leasing or property management.
New Zealand LPVs were historically established using unit trust structures, which required the appointment of an external
manager under the Unit Trusts Act. The small number of LPVs initially listed as companies were often also established with an
external manager.

17
The constituents of the S&P New Zealand Property Index are Kiwi Property, Goodman Property, Precinct Properties, Vital Healthcare, Argosy
Property, Stride Property and Investore Property.
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Jan- 14Jul- 14Jan- 15Jul- 15Jan- 16Jul- 16Jan- 17Jul- 17Jan- 18
Adjusted
index
NPT Gross ReturnNZX Property Index GrossNZX 50 Index Gross

Page 20

In recent years, there has been an increasing trend to internalise management functions, both in New Zealand and
internationally. Recent internalisation transactions and contract sale transactions are summarised in Appendix 4.
The main benefits associated with externalisation include:
• Depending on scale, a potential reduction in overall management expenses. For smaller entities, external management
fees may be less than the cost of internal management, particularly if the external manager is responsible for a number of
property funds, over which it can spread its costs.
• An external manager with a larger team can generate a higher number of potential property deals and conduct due
diligence more expediently.
• An appropriate incentive structure can align the interest of the manager and managed entity, whereby the manager has a
strong incentive to increase the total shareholder return (TSR) of the managed entity. Often the external manager will also
own an interest in the underlying managed entity, which further aligns the parties’ interests.
• The sale of management rights can generate one off up-front cash payment to the managed entity, albeit this will be offset
by the management fees that are payable during the term of the management agreement.
The main risks associated with externalisation include:
• A potential misalignment of interests between the manager and the managed entity, whereby the manager has a strong
incentive to grow AUM, to maximise management fees, even when the growth may not be in the best interests of the
managed entity. Under internalisation, the property vehicle gains control of the management team and is directly
responsible for the entity’s growth.
• The manager has the key employees and institutional knowledge required to operate the managed entity, which can be
costly to replace in the event the management it to be later internalised.
• Having an external manager may create an impediment to a corporate takeover or merger.
5.4 External Management Fees
The management functions for LPVs are typically split into two categories:
• Fund management services: These involve management of the listed entity itself including financial reporting, debt
management and strategy development and execution. For externally management entities, fees for these services are
typically charged as base fees calculated as a percentage of assets under management.
• Property management services: Key services include day to day management of the properties and tenants, collecting
rents, tenancy leasing (for both new leases and lease renewals), conducting rent reviews, and project and property
development. For externally managed entities these services are typically charged in accordance with a prescribed fee
schedule, or are outsourced to other external parties with the cost charged back to the managed entity.
It is often difficult to directly compare base management fees in isolation, due to differing levels of services being provided.
In addition to fund and property management fees, all externally managed LPVs in New Zealand charge performance fees,
which attempt to align the interests of the manager and the managed vehicle.
These performance fees are usually based on the TSR for the listed entity, with the manager sharing a portion of any return
achieved above a prescribed return threshold. Apart from Vital Healthcare, which has no threshold, the threshold is either an
absolute benchmark or a relative benchmark set with reference to a market index.
Table 5.2 sets out a summary of the current management fee structures for the four externally managed LPVs and NPT.

Page 21

Table 5.2: Summary of Management Contracts for New Zealand Externally Managed Property Vehicles

Base Fee Goodman Precinct Investore Vital Healthcare NPT
(Augusta proposal)
Amount 0.50% up to
$500 million;
0.40% thereafter
0.55% up to
$1.0 billion;
0.45% between
$1.0 billion and
$1.5 billion; and
0.35% thereafter
0.55% up to
$750 million;
0.45% thereafter
0.75% of total
assets
0.50% up to
$500 million;
0.40% thereafter
Asset base Average total
assets less cash,
debtors and
development land
Investment
Properties
Investment
Properties
Monthly average of
total assets
Total assets less
cash

Performance Fee Goodman Precinct Investore Vital Healthcare NPT
(Augusta proposal)
Amount 10% of return
above threshold
10% of return
above threshold
10% of return
above threshold
10% of average
annual increase in
total assets over
prior three years
10% of return
above threshold
Threshold S&P/NZX All Real
Estate Index (excl.
Goodman)
S&P/NZX All Real
Estate Index (excl.
Precinct)
Absolute: 10% None S&P/NZX All Real
Estate Index
Annual performance
fee cap
0.5% of market
capitalisation
0.5% of market
capitalisation
0.5% of market
capitalisation
1.0% of total assets 0.5% of market
capitalisation
TSR excess and
deficits carried
forward
Yes, perpetual Yes, max 2 years Yes, max 2 years No Yes, max 2 years

Other Fees Goodman Precinct Investore Vital Healthcare NPT
(Augusta proposal)
Leasing Fee On normal
commercial
terms
New leases: 11% to
20% of annual
rental income
Renewals: 25% to
75% of fee payable
for new leases
8.0% new lease
gross rent payable
Can charge other
fees but subject to
a cap of 1.75% of
total assets
New leases: 12% to
15% of annual
rental income
Renewals: 50% of
fee payable for new
leases
Property
Management Fee
Separately agreed $10,000 per
building per annum
and 4.0% of any
repairs
1.5% of the gross
income for property
Acquisition Fee and
Disposal Fee
1.0% (no agent)
and up to 1.0%
total (including
agent)
0.50% of sale 1.0% of the
purchase price on
acquisitions only
Development
Management Fee
Up to 4.0% of
development cost
4.0% of
development/
R&M cost
3.5% of
development cost
Source: Annual Reports, NZX Announcement, Company websites, the proposed NPT Management Agreement

Page 21

Table 5.2: Summary of Management Contracts for New Zealand Externally Managed Property Vehicles

Base Fee Goodman Precinct Investore Vital Healthcare NPT
(Augusta proposal)
Amount 0.50% up to
$500 million;
0.40% thereafter
0.55% up to
$1.0 billion;
0.45% between
$1.0 billion and
$1.5 billion; and
0.35% thereafter
0.55% up to
$750 million;
0.45% thereafter
0.75% of total
assets
0.50% up to
$500 million;
0.40% thereafter
Asset base Average total
assets less cash,
debtors and
development land
Investment
Properties
Investment
Properties
Monthly average of
total assets
Total assets less
cash

Performance Fee Goodman Precinct Investore Vital Healthcare NPT
(Augusta proposal)
Amount 10% of return
above threshold
10% of return
above threshold
10% of return
above threshold
10% of average
annual increase in
total assets over
prior three years
10% of return
above threshold
Threshold S&P/NZX All Real
Estate Index (excl.
Goodman)
S&P/NZX All Real
Estate Index (excl.
Precinct)
Absolute: 10% None S&P/NZX All Real
Estate Index
Annual performance
fee cap
0.5% of market
capitalisation
0.5% of market
capitalisation
0.5% of market
capitalisation
1.0% of total assets 0.5% of market
capitalisation
TSR excess and
deficits carried
forward
Yes, perpetual Yes, max 2 years Yes, max 2 years No Yes, max 2 years

Other Fees Goodman Precinct Investore Vital Healthcare NPT
(Augusta proposal)
Leasing Fee On normal
commercial
terms
New leases: 11% to
20% of annual
rental income
Renewals: 25% to
75% of fee payable
for new leases
8.0% new lease
gross rent payable
Can charge other
fees but subject to
a cap of 1.75% of
total assets
New leases: 12% to
15% of annual
rental income
Renewals: 50% of
fee payable for new
leases
Property
Management Fee
Separately agreed $10,000 per
building per annum
and 4.0% of any
repairs
1.5% of the gross
income for property
Acquisition Fee and
Disposal Fee
1.0% (no agent)
and up to 1.0%
total (including
agent)
0.50% of sale 1.0% of the
purchase price on
acquisitions only
Development
Management Fee
Up to 4.0% of
development cost
4.0% of
development/
R&M cost
3.5% of
development cost
Source: Annual Reports, NZX Announcement, Company websites, the proposed NPT Management Agreement

Page 22

5.5 Management Expense Ratios
One key consideration for investors in LPVs is the level of management costs incurred. Figure 5.2 illustrates the total
management expense ratio (MER) for New Zealand LPVs. We have used reported results for FY16 for Property For Industry
18

and FY17 for all other LPVs. We have calculated the MER
19
as the total management and administration expenses (including
management fees paid to third parties, administration and other operating expenses) divided by average total assets
20
. We
have also shown the maximum performance fee that would be payable for LPVs with externalised management agreements.
Figure 5.2: Management expense ratios – p ercentage of average total assets

Source: Capital IQ, Annual Reports, KordaMentha analysis
The MERs (excluding performance fees) range from 1.31% to 0.62% across the nine listed entities above, with an average of
0.75%. If maximum performance fees are included for the externally managed LPV’s, then the MERs range from 0.62% to
1.91% across the nine listed entities, with an average of 0.98%. NPT’s MER of 1.31% is high relative to other LPVs, in large
part due to NPT needing to incur certain fixed costs as a listed company, combined with its relative small scale meaning these
costs represent a relatively higher cost of operation.
NPT estimates that had it been managed under the proposed Management Agreement in FY18, then its MER would have been
1.05% (prior to any performance fees). The reduction from NPT’s actual FY17 MER (1.31%) is due to cost savings achieved
from the Proposed Externalisation (refer to section 7.2).
The performance fees, if achieved, can add a significant cost impost for an LPV. For example, Vital Healthcare achieved its
maximum performance fee of 1% of total assets in FY17.
NPT has a relatively high exposure to the retail sector, currently at 56% of its portfolio. Other LPVs where the retail sector is the
highest sector exposure are Kiwi Property, Investore Property and Stride Property. These LPVs have MER’s between 0.63% and
0.79%. NPT’s MER of 1.31% is above the range for LPV’s focused on the retail sector.

18
The MER for Property For Industry is presented prior to its internalisation proposal (which occurred post FY16).
19
The MER analysis is provided for high level comparative purposes only. The estimation approach is difficult to apply consistently due to
inconsistent reporting of expenses across entities. Any changes since the financial year end will not be reflected in the analysis above such as
the sale of two NPT properties.
20
We have calculated Average Total Assets as the average of the opening and closing balances for FY17 to try to account for changes in the
asset base during the year. Investore was formed in a carveout of Stride assets and listed in July 2016. The proforma balance sheets as
September 2016 and March 2017 was used for Investore and Stride.
0.91%
1.31%
0.79%
0.51%
0.56%
0.78%
0.66%
0.63%
0.62%
1.00%
0.32%
0.39%
0.35%
0.00%
0.40%
0.80%
1.20%
1.60%
2.00%
VitalNPTInvestorePrecinctGoodmanStrideArgosyKiwiPFI
ExternalInternalExternalExternalExternalInternalInternalInternalExternal
MER
(excl. Performance Fee)
Maximum Performance
Fee
Average MER excluding performance fees

Page 23

Figure 5.3 illustrates that LPVs with large asset bases, such as Kiwi Property, Goodman Property and Precinct Property, tend to
have much lower MERs. This suggests that there may be significant benefits of scale for LPVs.
Figure 5.3: Management expense ratios relative to total assets (excluding performance fees)

Vital
NPT
Investore
Precinct
Goodman
Stride
Argosy
Kiwi
PFI
0.00%
0.40%
0.80%
1.20%
1.60%
05001,0001,5002,0002,5003,000
Management Expense Ratios
Total Assets ($ millions)

Page 22

5.5 Management Expense Ratios
One key consideration for investors in LPVs is the level of management costs incurred. Figure 5.2 illustrates the total
management expense ratio (MER) for New Zealand LPVs. We have used reported results for FY16 for Property For Industry
18

and FY17 for all other LPVs. We have calculated the MER
19
as the total management and administration expenses (including
management fees paid to third parties, administration and other operating expenses) divided by average total assets
20
. We
have also shown the maximum performance fee that would be payable for LPVs with externalised management agreements.
Figure 5.2: Management expense ratios – percentage of average total assets

Source: Capital IQ, Annual Reports, KordaMentha analysis
The MERs (excluding performance fees) range from 1.31% to 0.62% across the nine listed entities above, with an average of
0.75%. If maximum performance fees are included for the externally managed LPV’s, then the MERs range from 0.62% to
1.91% across the nine listed entities, with an average of 0.98%. NPT’s MER of 1.31% is high relative to other LPVs, in large
part due to NPT needing to incur certain fixed costs as a listed company, combined with its relative small scale meaning these
costs represent a relatively higher cost of operation.
NPT estimates that had it been managed under the proposed Management Agreement in FY18, then its MER would have been
1.05% (prior to any performance fees). The reduction from NPT’s actual FY17 MER (1.31%) is due to cost savings achieved
from the Proposed Externalisation (refer to section 7.2).
The performance fees, if achieved, can add a significant cost impost for an LPV. For example, Vital Healthcare achieved its
maximum performance fee of 1% of total assets in FY17.
NPT has a relatively high exposure to the retail sector, currently at 56% of its portfolio. Other LPVs where the retail sector is the
highest sector exposure are Kiwi Property, Investore Property and Stride Property. These LPVs have MER’s between 0.63% and
0.79%. NPT’s MER of 1.31% is above the range for LPV’s focused on the retail sector.

18
The MER for Property For Industry is presented prior to its internalisation proposal (which occurred post FY16).
19
The MER analysis is provided for high level comparative purposes only. The estimation approach is difficult to apply consistently due to
inconsistent reporting of expenses across entities. Any changes since the financial year end will not be reflected in the analysis above such as
the sale of two NPT properties.
20
We have calculated Average Total Assets as the average of the opening and closing balances for FY17 to try to account for changes in the
asset base during the year. Investore was formed in a carveout of Stride assets and listed in July 2016. The proforma balance sheets as
September 2016 and March 2017 was used for Investore and Stride.
0.91%
1.31%
0.79%
0.51%
0.56%
0.78%
0.66%
0.63%
0.62%
1.00%
0.32%
0.39%
0.35%
0.00%
0.40%
0.80%
1.20%
1.60%
2.00%
VitalNPTInvestorePrecinctGoodmanStrideArgosyKiwiPFI
ExternalInternalExternalExternalExternalInternalInternalInternalExternal
MER
(excl. Performance Fee)
Maximum Performance
Fee
Average MER excluding performance fees

Page 23

Figure 5.3 illustrates that LPVs with large asset bases, such as Kiwi Property, Goodman Property and Precinct Property, tend to
have much lower MERs. This suggests that there may be significant benefits of scale for LPVs.
Figure 5.3: Management expense ratios relative to total assets (excluding performance fees)

Vital
NPT
Investore
Precinct
Goodman
Stride
Argosy
Kiwi
PFI
0.00%
0.40%
0.80%
1.20%
1.60%
05001,0001,5002,0002,5003,000
Management Expense Ratios
Total Assets ($ millions)

Page 24

6 Overview of Augusta
6.1 History
Augusta was listed on the NZX in December 2006 as Kermadec Property Fund. At the time of its listing, Augusta was an
externally managed LPV named Kermadec Property Fund Limited. The manager traded under the ‘Augusta’ name.
Over the past several years, Augusta has been in the process of transitioning its business to focus on funds management and
syndication. Augusta has been divesting its directly owned properties, with all remaining properties owned by Augusta
recorded as ‘held for sale’ in its financial accounts. Instead of direct investment, Augusta has instead focused on co-
investment in its funds, with a targeted interest between 10% and 20% in the underlying investments.
In March 2012, Augusta entered into a sale and purchase agreement with its manager, to terminate the management
agreement and acquire the manager’s ongoing funds management business. The transaction increased Augusta’s funds
under management to approximately $260 million, of which approximately $100 million was directly owned by Augusta.
Augusta acquired KCL Property Limited for $15 million and Investment Property Titles Limited for $444,000 in April 2014.
Figure 6.1 shows Augusta’s funds under management over time, and illustrates that the 2014 acquisitions represented a
material step change in Augusta’s funds management operations.
Figure 6.1: Assets under management

Augusta currently owns 18.85% of NPT. Augusta purchased the shares in 2016 and 2017. If the Proposed Externalisation
proceeds and Augusta acquires the NPT management rights, then Augusta’s funds under management will increase by
$180 million – albeit, with a portion of this value contracted to be sold in 2018. Augusta has advised that its intention is to
materially grow NPT’s property investments.
98
95
102
107
93
212
257
991
1,246
1,489
174
103
96
310
1,178
1,267
1,456
1,678
0
400
800
1,200
1,600
2,000
Mar 13Mar 14Mar 15Mar 16Mar 17
$ million
Other Properties Under Management
Augusta Syndicates (NZ and AUS)
Augusta Capital –Directly Owned
KCL& IPT
aquired
in the
following
month

Page 25

6.2 Property funds manager
As at 30 September 2017, Augusta manages more than 100 properties, with a cumulative value exceeding $1.7 billion.
Figure 6.2 and 6.3 illustrate the location and type of properties managed by Augusta. The managed properties are mainly
based in Auckland, with the balance spread throughout New Zealand and Brisbane, Australia. The properties are reasonably
well diversified across the office, industrial and retail.
Figure 6.2: Assets under management – Location Figure 6.3: Assets under management – Type

For its New Zealand audited schemes
21
Augusta achieved a weighted average total return to investors of 16% in the year
ended 31 March 2017 and a 12% weighted average internal rate of return for the properties held in the period
ended31 March 2017.
22

6.3 Share price performance
Figure 6.4 illustrates the returns to Augusta’s shareholders, relative to the performance of the S&P New Zealand Property
Index, the wider NZX 50 Index, over the last four years. Augusta has outperformed the market over the last four years.
Figure 6.4: Relative shareholder returns (pre-tax)

Source: Capital IQ

21
New Zealand audited schemes account for $1.0 billion funds under management, and exclude Australian audited properties ($100 million),
new schemes ($110 million), directly owned portfolio ($90 million), Value Add Fund No.1 ($120 million) and privately owned/other properties
– not audited ($260 million).
22
The returns are based on realised and unrealised gains/losses. Unrealised returns are based on property valuations as at 31 March 2017.
The returns are across a large portfolio of properties.
Au cklan d
67%
O ther
North
Island
16%
Sou th
Island
9%
Brisban e
8%
Office
39%
In du strial
27%
Retail
26%
Other
8%
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Jan- 14Jul- 14Jan- 15Jul- 15Jan- 16Jul- 16Jan- 17Jul- 17Jan- 18
Adjusted
index
Augusta Gross R eturnNZX Property Index GrossNZX 50 Index Gross

Page 26

7 Assessment of the Proposed Externalisation
7.1 Introduction
NPT is seeking Shareholder approval to proceed with the Proposed Externalisation as described in Section 3.
In assessing the fairness or otherwise of the Proposed Externalisation, we have considered:
• The financial impact of the Proposed Externalisation on NPT
• The proposed consideration relative to comparable transactions
• Alternative options available to NPT
• Other considerations for the Proposed Externalisation.
7.2 Impact on NPT earnings
Table 7.1 sets out the pro forma impact of the Proposed Externalisation on NPT’s FY18 earnings, assuming the externalisation
had occurred 1 April 2017. This shows that had the Proposed Externalisation occurred on 1 April 2017, NPT would have
earned an estimated $719,000 additional pre-tax earnings and 0.3 cents per share more distributable profit
23
.
Table 7.1: FY18 pro forma earnings impact of the Proposed Externalisation ($ 000)

FY18
Status Quo
Impact of
Externalisation
FY18
Pro Forma

Gross rental income 17,132 150 17,282
Direct property expenses (5,232) (17) (5,249)

Net Rental Income 11,900 133 12,033

Other income 4 – 4
Administration expenses (2,339) 1,318 (1,021)
Augusta fund management fees – (919) (919)

Earnings Before Interest and Tax (EBIT) 9,565 532 10,097

Net finance costs (2,810) 187 (2,623)

Net Profit Before Tax and Other Items 6,755 719 7,474

Distributable Profit Per Share After Current Tax 3.8 cps + 0.3 cps 4.1 cps
Source: NPT estimates
Key assumptions which underpin Table 7.1 include:
• Following externalisation, it is anticipated that the current management of NPT would vacate the rented premises at
99 Albert Street which would free up space for new tenants.
• Direct property operating expenses are expected to only change slightly following externalisation, reflecting the net
increase in Property Management Fees payable to Augusta offset by the net fees paid to external managers currently
(after allowing for some recovery from tenants).
• Administration expenses are expected to reduce following externalisation, as a large portion of NPT’s administration
function is outsourced to Augusta under the Management Agreement.

23
Distributable profit represents NPT’s calculation of underlying earnings – defined as net profit before income tax, adjusted for non-cash
items and/or non-recurring items, less current tax, divided by the fully diluted shares on issue.

Page 27

• NPT expects net proceeds from the sale of the management rights of $3.7 million after allowing for expected redundancy
costs and other costs associated with externalisation. The net interest cost savings from the proceeds of the sale of
management rights are based on NPT’s existing interest rates.
The FY18 earnings include income and expenses related to the two properties which NPT has contracted to sell (AA Centre and
Print Place). For the purpose of this earnings analysis, it is assumed that NPT will use the proceeds from selling these
properties to purchase new properties with comparable yields.
7.3 Value of Proposed Externalisation to NPT
It is difficult to consider the value of the Proposed Externalisation to NPT, as the fees payable will depend on the size of NPT’s
investment portfolio, which is uncertain. It will largely depend on the growth achieved following the externalisation, and
whether Augusta can implement the ‘Yield Plus Growth’ investment strategy and find further acquisitions for NPT.
In considering the fairness of the proposed transaction, we have adopted a simple scenario, whereby NPT:
• Receives the initial $4.5 million consideration. It is assumed this amount will not be taxed, which is supported by tax
advice received by NPT.
• Pays an expected $810,000 in one-off costs associated with the Proposed Externalisation, net of any tax offset.
24

• Earns an additional $532,000 EBIT per annum due to the externalisation, in line with the FY18 Pro Forma estimates
shown in Table 7.1. We have assumed these savings increase at 1.5% inflation but are otherwise static. This estimate
implies NPT purchases properties with the funds from selling AA Centre and Print Place, but otherwise does not grow its
portfolio. We have assumed these earnings are taxed at a 28% company tax rate.
We have applied a discount rate of 7.5% to the cashflows. We have estimated this discount rate by considering the weighted
average cost of capital (WACC) for NPT. Further detail on this discount rate is set out at Appendix 5.
Table 7.2 shows that, based on the simplistic assumptions set out above, we estimate the value of the Proposed
Externalisation to NPT at $10.1 million, which is equivalent to 6.2 cents per share.
Table 7.2: Estimate of value to NPT ($ 000)

Cashflows Value
Initial consideration 4,500 4,500
One off costs 810 (810)
Additional EBIT per annum 532 6,400
Incremental value 10,090
Value per share 6.2 cps

In interpreting this value estimate, it is important to recognise that if NPT increases in scale, then the relative savings from
externalisation may diminish. However, we consider an increase in size is also likely to benefit NPT shareholders, as the
increase may lead to a reduction to the discount relative to NTA at which NPT’s shares currently trade.

24
NPT has estimated $1,000,000 in pre-tax costs – $680,000 in redundancy costs and $320,000 in transaction costs associated with the
Proposed Externalisation. NPT has received tax advice that the redundancy costs will be tax deductible, but not the other transaction costs.
After adjusting for tax, there is an estimated $810,000 in one-of f costs associated with the Proposed Externalisation.

Page 28

7.4 Comparable transactions
In considering the fairness or otherwise of the Proposed Externalisation, we have compared the proposed consideration to the
amounts paid for management rights in comparable transactions.
Table 7.3 summarises transactions for management contracts of New Zealand property investment vehicles over the last nine
years. We include further information on these transactions at Appendix 4.
Table 7.3: Comparable property management contract transactions
Date Entity Type
Consideration
$ million
AUM
$ million
Revenue
Multiple
Consideration
as % of AUM
Jun 17 Property For Industry Internalisation 42.0 1,083 5.8x 3.9%
Dec 13 Kiwi Property Group Internalisation 70.6 2,188 2.7x 3.2%
Feb 12 Augusta Capital
25
Internalisation 2.0 100 2.4x 2.0%
Jan 12 Property For Industry Contract Sale 10.5 359 5.6x 2.9%
Oct 11 Vital Healthcare Contract Sale 11.5 533 2.8x 2.2%
Aug 11 Argosy Property Trust Internalisation 20.0 935 2.5x 2.1%
Oct 11 National Property Trust
26
Internalisation 2.5 187 1.7x 1.3%
Jul 10 Stride Property
27
Internalisation 35.0 700 3.5x 5.0%
Mean 3.4x 2.8%
Median 2.8x 2.6%
Source: Capital IQ, publicly available company announcements and KordaMentha estimates.
The management contracts that were the subject of these transactions differed considerably in their terms, which may result in
valuation metrics that are not directly comparable. For example, the internalisation of the Augusta Capital’s management
included the acquisition of its manager, including funds management operations for third parties.
Revenue Multiple
Based on the estimated FY18 Pro Forma management fees, the $4.5 million consideration payment in the Proposed
Externalisation represents a multiple of 3.8 times revenue. The revenue multiple for the externalisation of NPT’s management
is broadly in line with the median multiple for comparable transactions, and is above the multiple for all the comparable except
the two which involved Property For Industry.
The following points are relevant when considering the multiples paid in the comparable transactions:
• When the two Property For Industry transactions occurred, the manager at the time was well entrenched and – assuming
the manager continued to deliver the management services – there was virtually no scope to terminate the agreement or
change the fee terms. The fund management fee was set at 0.725% of total tangible assets up to $425 million, 0.45%
between $425 million and $775 million and 0.35% thereafter.
• For many of the other comparable transactions, the underlying management agreements allowed for the possibility of
contract termination, where the manager could typically be removed by special resolution of the shareholders of the
underlying LPV.
• Some of the transactions occurred when the manager was under financial distress, which likely affected the revenue
multiple paid.

25
Formerly known as Kermadec Property Fund Limited.
26
Formerly known as National Property Trust.
27
Formerly known as DNZ Property Fund Limited.

Page 29

Percentage of AUM
The $4.5 million consideration payment in the Proposed Externalisation represents:
• 2.6% of NPT’s AUM as at 31 March 2017, including investment properties that are contracted to be sold; and
• 3.7% of NPT’s AUM as at 31 March 2017, excluding investment properties that are contracted to be sold.
When including the assets which are contracted to be sold, the consideration in the Proposed Externalisation, as a percentage
of AUM, is in line with the average for the comparable transactions. We consider this is relevant because, while some
properties are contracted to be sold, this will make additional funding available with which new property investments may be
purchased – which we understand is the short to medium term intention of both the NPT Board and Augusta.
Excluding the investment properties which are contracted to be sold, the consideration in the Proposed Externalisation, as a
percentage of AUM, is at the higher end of the comparable transactions.
7.5 Alternative options available to NPT
7.5.1 Maintenance of the status quo
If the Proposed Externalisation does not proceed, one option is for NPT to continue with the status quo, as an internally
managed company.
In its current form, NPT has one of the higher management cost structures, relative to the size of its portfolio (refer to page 22).
This is largely due to NPT’s lack of scale relative to its peers. Unless NPT increases the size of its investment portfolio, this lack
of scale is likely to weigh on its operating earnings.
NPT is contracted to sell its AA Centre and Print Place properties, this means that the issue of scale is unlikely to be remedied
in the short to medium term. Furthermore, NPT does not currently have the in-house team to undertake the required activities
to search for and investigate potential acquisitions. This means that additional costs will likely need to be incurred if NPT is to
increase its portfolio size.
Based on its historical performance, if NPT continues with the status quo, then we consider it likely that the NPT share price
will continue to trade at a discount to the underlying net tangible assets in the short to medium term, because it has not shown
a track record of being able to grow its asset base and at its existing size it has a high cost structure.
The status quo compares with our estimate of incremental value to NPT shareholders, from undertaking the Proposed
Externalisation, of 6.2 cents per share (refer to page 27).
7.5.2 Dispose remaining NPT investment properties and liquidate the Company
Another option available to NPT, in the event the Proposed Externalisation does not proceed, is for NPT to undertake the
orderly sale of its properties and liquidate the Company. We have considered the funds which may become available to NPT
shareholders in such a scenario.
NPT is contracted to sell two of its properties (AA Centre and Print Place), which has removed a significant amount of the value
uncertainty from its property portfolio. Furthermore, NPT has advised that it is confident that it could sell Heinz Watties
National Distribution Centre and The Roskill Centre at or near their current valuations. The major uncertainty in any disposal
scenario is the value to be achieved from selling NPT’s remaining three properties (Eastgate Shopping Centre, The Roskill
Centre and the Heinz Watties National Distribution Centre).
NPT management have advised that there may be challenges to achieving selling prices at book value, for NPT’s remaining
properties, under a liquidation scenario, as potential purchasers will be aware of NPT’s intention to wind down. We have
therefore considered the proceeds which may be available to NPT shareholders under a range of discount scenarios.
Table 7.4 below summarises the proceeds which may be available to NPT shareholders if the discount to book value for the
remaining properties is between nil and $10 million.

Page 30

Table 7.4: Net realisations ($ million, except where stated otherwise)
Low Midpoint High
Net tangible assets as at 31 December 2017 118.1 118.1 118.1
Net loss on selling AA Centre and Print Place at contracted prices (1.5) (1.5) (1.5)
Estimated disposal costs selling remaining three properties (1.2) (1.2) (1.2)
Potential loss on realisations from remaining properties (10.0) (5.0) –
Estimated redundancy and liquidation costs (1.3) (1.3) (1.3)
Funds available 104.1 109.1 114.1
Shares on issue (millions) 161.9 161.9 161.9
Funds available (cents per share) 64.3 cps 67.4 cps 70.5 cps
Source: NPT estimates
The amounts shown in Table 7.4 do not allow for the time to sell the properties. The logic underlying this analysis is that any
time-value-of-money discount associated with the time to sell the properties will be offset by the properties earnings between
now and the date the properties are sold.
The Proposed Externalisation would effectively need to deliver a share price of 64.3–70.5 cents to be value neutral to NPT
shareholders – assuming a discount on sale of the remaining three properties between nil and $10 million.
We understand from NPT that in a liquidation scenario, it may be difficult to sell for book value and realisations between the
low end and the midpoint are more likely (between 64.3–67.4 cents per share).
The net realisation values shown in Table 7.4 compare to a share price range of 59.5–64.0 cents throughout January 2018.
7.6 Other Considerations for the Proposed Externalisation
By undertaking the Proposed Externalisation, NPT will gain access to Augusta’s expertise in searching for and investigating
potential property acquisitions. This may allow NPT to increase the scale of its investment portfolio, without incurring the
significant upfront fixed costs associated with having its own dedicated investment team.
The Proposed Externalisation offers NPT shareholders some level of ‘optionality’. If Augusta enhances the value of NPT’s
shares, which it is incentivised to do, then this will be positive for NPT shareholders and likely be value accretive relative to a
liquidation scenario. However, if Augusta fails to enhance the value of NPT, then:
• NPT will receive $4.5 million in upfront cash consideration. From this amount NPT would need to pay redundancy costs for
its current employees, but this would avoid NPT then needing to pay redundancy costs at a later date.
• NPT may terminate the agreement after five years, at which point NPT shareholders will have received any dividends in the
intervening years and could then dispose of any remaining investment properties and liquidate the Company.
• NPT would need to make a one-off Termination Fee to Augusta.

Page 31

Appendix 1: Sources of Information
Documents relied upon
Key information which was used and relied upon, without independent verification, in preparing this report includes the
following:
• The Management Agreement and other documentation for the Proposed Externalisation
• Draft Notice of Meeting
• NPT Annual Reports for FY15, FY16 and FY17
• NPT FY18 Status Quo financial forecast
• NPT FY18 Pro Forma financial forecast
• NPT share register
• Valuation reports for the properties owned by NPT, prepared by JLL
• Market announcements for NPT, Augusta and comparable companies
• Data sourced from Capital IQ
• 2013 New Zealand census data.
We have also had discussions with NPT’s management and advisers in relation to the nature of NPT’s business operations, the
rationale for the Proposed Externalisation and the known risks and opportunities for the foreseeable future.
Reliance upon information
In forming our opinion, we have relied upon and assumed, without independent verification, the accuracy and completeness of
all information that was available from public sources and all information that was furnished to us by NPT and its advisers. We
have no reason to believe any material facts have been withheld.
We have evaluated that information through analysis, enquiry and examination for the purposes of forming our opinion but we
have not verified the accuracy or completeness of any such information. We have not carried out any form of due diligence or
audited the accounting or other records of NPT. We do not warrant that our enquiries would reveal any matter that an audit,
due diligence review or extensive examination might disclose.

Page 32

Appendix 2: Qualifications and declarations
Qualifications
KordaMentha is an independent New Zealand Chartered Accounting practice, internationally affiliated with the KordaMentha
group. The firm has established its name nationally through its provision of professional financial consultancy services with a
corporate advisory and insolvency emphasis, and because it has no business advisory, audit or tax divisions, avoids any
potential conflicts of interest which may otherwise arise. This places the firm in a position to act as an independent adviser and
prepare independent reports.
The persons responsible for preparing and issuing this report are Grant Graham (BCom, CA); Shane Bongard (BCom (Hons));
Shaun Hayward (BCom, BProp, CFA) and Suresh Yahanpath (MAppFin, BCom, BSc). All have significant experience in providing
corporate finance advice on mergers, acquisitions and divestments, advising on the value of shares and undertaking financial
investigations.
All have significant experience in providing corporate finance advice on mergers, acquisitions and divestments, advising on the
value of shares and undertaking financial investigations.
Disclaimers
It is not intended that this report should be used or relied upon for any purpose other than as an expression of KordaMentha’s
opinion as to merits of the Proposed Externalisation. KordaMentha expressly disclaims any liability to any NPT equity security
holder that relies or purports to rely on the Report for any other purpose and to any other party who relies or purports to rely on
the Report for any purpose.
This report has been prepared by KordaMentha with care and diligence and the statements and opinions given by
KordaMentha in this report are given in good faith and in the belief on reasonable grounds that such statements and opinions
are correct and not misleading. However, no responsibility is accepted by KordaMentha or any of its officers or employees for
errors or omissions however arising (including as a result of negligence) in the preparation of this report, provided that this
shall not absolve KordaMentha from liability arising from an opinion expressed recklessly or in bad faith.
Indemnity
NPT has agreed that, to the extent permitted by law, it will indemnify KordaMentha and its partners, employees and officers in
respect of any liability suffered or incurred as a result of or in connection with the preparation of this report. This indemnity
does not apply in respect of any negligence, misconduct or breach of law. NPT has also agreed to indemnify KordaMentha and
its partners, employees and officers for time incurred and any costs in relation to any inquiry or proceeding initiated by any
person except where KordaMentha or its partners, employees and officers are guilty of negligence, misconduct or breach of
law in which case KordaMentha shall reimburse such costs.
Independence
KordaMentha does not have at the date of this report, and has not had, any shareholding in, or other relationship, or conflict of
interest with NPT that could affect its ability to provide an unbiased opinion in relation to this transaction. KordaMentha will
receive a fee for the preparation of this report. This fee is not contingent on the success or implementation of the Proposed
Externalisation or any transaction complementary to it. KordaMentha has no direct or indirect pecuniary interest or other
interest in this transaction. We note for completeness that a draft of this report was provided to NPT and its advisers, solely for
the purpose of verifying the factual matters contained in the Report. While minor changes were made to the drafting, no
material alteration to any part of the substance of this report, including the methodology or conclusions, were made as a result
of issuing the draft.
Consent
KordaMentha consents to the issuing of this report, in the form and context in which it is included, in the information to be sent
to NPT shareholders. Neither the whole nor any part of this report, nor any reference thereto may be included in any other
document without the prior written consent of KordaMentha as to the form and context in which it appears.

Page 33

Appendix 3: Valuation Methodologies
There are four methodologies commonly used for valuing businesses:
• Discounted Cash Flow (DCF) analysis;
• Capitalisation of earnings;
• Estimate of proceeds from an orderly realisation of assets; and
• Industry rules of thumb.
Each of these valuation methodologies is appropriate in different circumstances. A key factor in determining which
methodology is appropriate is the actual practice commonly adopted by purchasers of the type of businesses involved.
Discounted cash flow
It is a fundamental principle that the value of an asset or business is represented by its expected future cash flows, discounted
to present value at a rate which reflects the risk inherent in those cash flows. This approach, referred to as the DCF
methodology, is particularly suited to situations where a business is in a growth phase or requires significant additional
investment to achieve its projected earnings.
The DCF methodology requires considerable judgement in estimating future cash flows and the valuer generally places
significant reliance on medium to long term projections prepared by management. The DCF valuation methodology can also be
very sensitive to changes in underlying assumptions. Notwithstanding these limitations, DCF valuations are appropriate where
current earnings are not representative of reasonable expectations of future earnings.
Capitalisation of earnings
The capitalisation of earnings methodology requires an assessment of the maintainable earnings of the business and the
selection of an appropriate capitalisation rate, or earnings multiple. This methodology is most appropriate where there is a long
history of relatively stable returns and capital expenditure requirements are neither large nor irregular. In practice, it is often
difficult to obtain accurate forecasts of future cash flows and therefore the capitalisation of earnings methodology is often
used as a surrogate for the DCF methodology.
Realisation of assets
The realisation of assets approach is based on an estimate of the proceeds from an orderly sale of assets. This methodology is
more commonly applied to businesses that are not going concerns. The valuation result reflects liquidation values and typically
attributes no value to any goodwill associated with on-going trading.
Industry rules of thumb
In some industries, businesses are valued using well established ‘rules of thumb’. Generally these rules of thumb are used as
a cross-check for other valuation methodologies.

Page 33

Appendix 3: Valuation Methodologies
There are four methodologies commonly used for valuing businesses:
• Discounted Cash Flow (DCF) analysis;
• Capitalisation of earnings;
• Estimate of proceeds from an orderly realisation of assets; and
• Industry rules of thumb.
Each of these valuation methodologies is appropriate in different circumstances. A key factor in determining which
methodology is appropriate is the actual practice commonly adopted by purchasers of the type of businesses involved.
Discounted cash flow
It is a fundamental principle that the value of an asset or business is represented by its expected future cash flows, discounted
to present value at a rate which reflects the risk inherent in those cash flows. This approach, referred to as the DCF
methodology, is particularly suited to situations where a business is in a growth phase or requires significant additional
investment to achieve its projected earnings.
The DCF methodology requires considerable judgement in estimating future cash flows and the valuer generally places
significant reliance on medium to long term projections prepared by management. The DCF valuation methodology can also be
very sensitive to changes in underlying assumptions. Notwithstanding these limitations, DCF valuations are appropriate where
current earnings are not representative of reasonable expectations of future earnings.
Capitalisation of earnings
The capitalisation of earnings methodology requires an assessment of the maintainable earnings of the business and the
selection of an appropriate capitalisation rate, or earnings multiple. This methodology is most appropriate where there is a long
history of relatively stable returns and capital expenditure requirements are neither large nor irregular. In practice, it is often
difficult to obtain accurate forecasts of future cash flows and therefore the capitalisation of earnings methodology is often
used as a surrogate for the DCF methodology.
Realisation of assets
The realisation of assets approach is based on an estimate of the proceeds from an orderly sale of assets. This methodology is
more commonly applied to businesses that are not going concerns. The valuation result reflects liquidation values and typically
attributes no value to any goodwill associated with on-going trading.
Industry rules of thumb
In some industries, businesses are valued using well established ‘rules of thumb’. Generally these rules of thumb are used as
a cross-check for other valuation methodologies.

Page 34

Appendix 4: New Zealand Listed Property Vehicles
Comparable Transactions
Table A4.1 below summarise selected New Zealand transaction evidence in relation to property management contract
internalisations, externalisations and sales. We note that the management contracts underlying each transaction differ
considerably in their terms, which may result in valuation metrics that are not directly comparable.
Table A4.1: Comparable property management contract transactions
Date Entity Type Consideration
$ million
AUM
$ million
Revenue
Multiple
Consideration
as % of AUM
Jun 17 Property For Industry Internalisation 42.0 1,083 5.8x 3.9%
Dec 13 Kiwi Property Group Internalisation 70.6 2,188 2.7x 3.2%
Feb 12 Augusta Capital
28
Internalisation 2.0 100 2.4x 2.0%
Jan 12 Property For Industry Contract Sale 10.5 359 5.6x 2.9%
Oct 11 Vital Healthcare Contract Sale 11.5 533 2.8x 2.2%
Aug 11 Argosy Property Trust Internalisation 20.0 935 2.5x 2.1%
Oct 11 National Property Trust
29
Internalisation 2.5 187 1.7x 1.3%
Jul 10 Stride Property
30
Internalisation 35.0 700 3.5x 5.0%
Average 3.4x 2.8%
Median 2.8x 2.6%
Source: Capital IQ, publicly available company announcements and KordaMentha estimates.
Comparable Companies
Table 5.1 in this report summarises the New Zealand LPVs. For completeness we have described these companies below:
Kiwi Property Group
Kiwi Property Group Limited (Kiwi Property) is the largest listed property company on the NZX. It has invested in a portfolio of
mainly retail and office buildings with a total value of approximately $3.0 billion across New Zealand.
Kiwi Property was founded in 1992 and listed on the NZX in December 1993. Kiwi Property internalised its management and,
in December 2014, moved from a trust to a company structure.
Goodman Property Trust
Goodman Property Trust is an externally managed unit trust, listed on the NZX. It has a market capitalisation of around $1.6
billion. The Manager of the Goodman Property Trust is a subsidiary of the ASX listed Goodman Group. The Goodman Group are
also Goodman Property Trust’s largest investor with a cornerstone unitholding of 21%.
Goodman Property Trust is one of New Zealand’s largest investors in industrial properties. It also has some exposure to the
office sector. It has a substantial property portfolio, with a value in excess of $2.4 billion.

28
Formerly known as Kermadec Property Fund Limited.
29
Formerly known as National Property Trust.
30
Formerly known as DNZ Property Fund Limited.

Page 35

Precinct Properties
Precinct Properties Limited (Precinct Properties) is a specialist investor in city centre office buildings, which are predominately
in premium and A grade commercial office property.
Precinct Properties was originated as AMP NZ Office Trust, which was floated and listed on NZX in December 1997. In
November 2010, it changed its legal structure from a unit trust into a corporate.
Vital Healthcare
Vital Healthcare Property Trust (Vital Healthcare) is a real estate investment trust that invests in health and medical related
properties in New Zealand and Australia. It is externally managed by Vital Healthcare Management Limited. It undertakes
acquisition or development of medical or healthcare-related properties such as surgical and medical facilities, geriatric and
continuing care facilities primary healthcare facilities, and health support facilities.
Vital Healthcare was listed on the NZX in September 1999.
Argosy Property
Argosy Property Limited (Argosy Property) invests across industrial, office and retail properties predominantly in Auckland,
Hamilton, and Wellington. The firm was formerly known as Argosy Property Trust.
Argosy Property listed on the NZX in December 2002 as a Trust. In August 2011 Argosy's shareholders voted to buy the
management rights, and adopted a company structure in February 2012.
Property For Industry
Property For Industry Limited (PFI) invests in industrial property predominantly in Auckland. Most of PFI’s strategy is to focus
on industrial properties in in Auckland’s commercial hubs such as Mount Wellington, Penrose, and East Tamaki. PFI has 83
properties with an aggregate value of approximately $1.1 billion.
PFI was founded in 1993 jointly by Willis Bond & Co and Morrison & Co, and listed on the NZX in December 1994. PFI’s
management agreement has changed hands twice since it was formed. AMP Capital Investors acquired the management
rights in 1999 from Willis Bond & Co and Morrison & Co and then sold them to PFIM in 2011. PFI shareholders then
internalised its management rights in June 2017.
Stride Property and Stride Investment Management
Stride Property Limited and Stride Investment Management Limited trade together as a stabled group, (Stride Group). Stride
Group invests across retail, industrial and office properties in New Zealand. It’s investment properties comprise of freehold
land, leasehold land, buildings and improvements.
Stride Property Limited was previously called as DNZ Property Fund Limited and was established in 2008 through the
amalgamation of several property funds.
Investore Property
Investore Property Limited (Investore Property) invests in large format retail properties in New Zealand. It owns 25 large format
retail properties that are operate in the supermarket, building materials/hardware, and discount retail categories.
Investore Property was founded in 2015 and is based in Auckland, New Zealand. Investore Property was previously part of the
Stride Group.

Page 36

Appendix 5: Weighted Average Cost of Capital
We have estimated the post-tax, nominal WACC for NPT to be within a range of 7.4% and 7.7 % for NPT.
The WACC has been determined as follows:
ED
E
R
ED
D
TRWACC
ecd



)1(

where:
• R
d
= Pre-tax cost of debt = 4.3%, based on a 100bp credit margin over the risk free rate
• T
c
= Marginal corporate tax rate = 28%
• D / (D + E) = Target gearing (where E represents market capitalisation) = 33%
• R
e
= Cost of equity = 9.5% to 10.1%
We have determined the cost of equity using the Brennan-Lally specification of the Capital Asset Pricing Model, which uses the
following formula:
SCRPTRRTRR
ifmeife
)]1([)1(

where:
• R
f
= Risk free rate = 3.3%, based on the yields of long term government bonds
• T
i
= Investors’ effective tax rate on interest, dividends and capital gains = 28%
• β
a
= Asset Beta = a range of 0.50 to 0.55, based upon a review of the betas of comparable companies
• β
e
= Equity Beta = β
a
(1+D/E) = 0.75 to 0.83
• R
m
- R
f
(1- T
i
) = Expected excess return, after investor taxes, on the market portfolio of equity investments = 7.5%
• SCRP = Small company risk premium = 1.5% (NPT has a market capitalisation of approximately $100 million, whilst the
comparable companies have an average market capitalisation of approximately $1.1 billion and therefore a SCRP of 1.5%
has been added. Furthermore, NPT’s property portfolio is exposed to a limited number of properties, whereas the
comparable companies typically have diversified portfolios of properties.

Notes
72NPT Limited Notice of Special Meeting of Shareholders

Following a comprehensive
review and due diligence
process, it is the view of
the Board that the Augusta
Proposal represents a
significant opportunity that
will set NPT on a path to
growth.

OPTIMISED
PROPERTY
INVESTMENTS

---

LODGE YOUR PROXY
Online:
https://investorcentre.linkmarketservices.co.nz/voting/NPT
Scan & email:
meetings@linkmarketservices.co.nz Mail:
Fax: +64 9 375 5990 Use the enclosed reply paid
Deliver: envelope or address to:
Link Market Services Link Market Services
Level 11, Deloitte Centre, PO Box 91976
80 Queen Street, Auckland 1010 Auckland 1142

General Enquiries
+64 9 375 5998 enquiries@linkmarketservices.co.nz

PROXY FORM/ADMISSION CARD FOR SPECIAL MEETING OF SHAREHOLDERS OF NPT LIMITED
Notice is hereby given that a Special Meeting of Shareholders of NPT Limited (NPT) will be held on Monday 19 March 2018 commencing at 2:00 pm
at Link Market Services Limited, Level 11, Deloitte Centre, 80 Queen Street, Auckland. If you will attend the Special Meeting, please bring this form
to assist with your registration. If you will not attend the Special Meeting but wish to be represented by proxy, please complete and return this form (in
accordance with the lodgement instructions above) to NPT’s share registry, Link Market Services, by no later than 2:00 pm on Saturday 17 March
2018. You can also appoint your proxy and vote on the resolutions on the reverse of this form online by going to
https://investorcentre.linkmarketservices.co.nz/voting/NPT. You will need your CSN/Shareholder Number and Authorisation Code (FIN) to vote online.

Appointment of proxy
A proxy need not be a Shareholder and may be appointed by completing the proxy form attached to this Notice of Special Meeting. The appointment of
a proxy or representative does not preclude a Shareholder from attending and voting at the Special Meeting or carrying this out electronically as set out
in the proxy form accompanying this notice.

Voting of your holding
Direct your proxy how to vote by making the appropriate election, either online or on this Proxy Form, in respect of the one item of business (Resolution
1 on the next page). If you make more than one election in respect of the Resolution your vote will be invalid on that Resolution.

Appointing the Chairman of the Meeting as your proxy

The Chairperson of the Special Meeting is willing to act as a proxy. If you appoint the Chairperson of the Special Meeting as proxy but do not direct the
Chairperson to vote on any particular matter then the Chairperson intends to vote your Shares in favour of Resolution 1.

Restriction on Voting
Under Listing Rule 9.3.1 Augusta Capital Limited and its Associated Persons cannot vote on the resolution at the shareholder meeting.

Paul Duffy, a director of the Company, and Associated Persons of Paul Duffy, cannot act as a discretionary proxy at the meeting but may act as a proxy
where there is an express direction as to how to vote.

Attending the meeting
If you wish to vote in person, you should attend the Special Meeting. Please bring this form with you to the Special Meeting to assist with your
registration.
A corporation may appoint a person to attend and vote at the Special Meeting as its representative in the same manner as that in which it could appoint
a proxy. That person need not also be a Shareholder.
Signing instructions for proxy forms
Individual
Where the holding is in one name, the Shareholder must sign the Proxy Form.

Joint Holding
Where the holding is in more than one name, all of the joint Shareholders must sign the Proxy Form.

Power of Attorney
If this Proxy Form has been signed under a power of attorney, a copy of the power of attorney under which it was signed (if not previously provided to
the Registrar), and a signed certificate of non-revocation of the power of attorney must accompany this Proxy Form.

Corporate Shareholder
In the case of a corporate shareholder, a person acting under that shareholder’s express or implied authority or a director must sign this Proxy Form.
CSN/Holder Number:
<BARCODE>

PROXY/CORPORATE REPRESENTATIVE FORM
STEP 1: APPOINT A PROXY TO VOTE ON YOUR BEHALF
I/We being a Shareholder/s of NPT Limited hereby appoint:
The Chairman of the Meeting (tick)
Or ________________________________________ (name) of ____________________________________________________________ (address)
As my/our proxy to act generally at the Special Meeting on my/our behalf and to vote in accordance with the following directions at the Special Meeting
of NPT Limited to be held on Monday 19 March 2018, at 2:00 p.m. at the offices of Link Market Services Limited, Level 11, Deloitte Centre, 80 Queen
Street, Auckland and at any adjournment of that meeting.
STEP 2: ITEMS OF BUSINESS – PROXY VOTING INSTRUCTIONS
Complete this part if you have appointed a proxy above and you want to direct the proxy as to how the proxy should vote.
Please note: If you mark the abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes
will not be counted computing the required majority for that item.
If no box is ticked for an item, your proxy may vote as he/she sees fit.

ORDINARY BUSINESS
To consider and, if thought fit, pass the following ordinary resolution:

Tick () in box to vote

For Against Abstain Discretion
1.
That approval be given to NPT entering into a management contract with Augusta Funds
Management Limited (AFM), with Augusta Capital Limited (ACL) guaranteeing the
obligations of AFM, the term of that agreement being for a minimum period of 5 years on
the terms and conditions described in more detail in the Explanatory Notes accompanying
this Notice of Meeting and in consideration of AFM paying to NPT $4,500,000 on that
management contract being signed
   

And to vote on any resolutions to amend the resolution, on any resolution so amended, and on any other resolution proposed at the Special Meeting (or
any adjournment thereof). Unless otherwise instructed as above, the proxy will vote any discretionary votes for each resolution as he/she sees fit, or
may abstain from voting. The proxy is appointed only in respect of the above Special Meeting or any adjournment thereof.

STEP 3: SIGN: SIGNATURE OF SECURITY HOLDER(S) This section must be completed
Security Holder 1 Security Holder 2 Security Holder 3

or duly authorised officer or attorney or duly authorised officer or attorney or duly authorised officer or attorney
Contact Name ___________________________________________ Contact Daytime Telephone _______________________ Date ____________
Electronic Investor Communications: If you received the Notice of Meeting and Proxy Form by mail and wish to receive your future investor
communications by email please provide your email address below.
CSN/Holder Number:
<BARCODE>

External Management Proposal – Special Meeting to be Called NPT Limited – FY18 Third Quarter Dividend

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