2018 Interim Report

Property
for
Industry
Limited
Interim
Report
30 June
2018
INDUST
–RIOUS
PETER MASFEN
STRENGTH IN CHANGE MANAGEMENT
NEILSON STREET ACQUISITION CREATES
A VISIBLE FOOTPRINT
THE
TEAM
ISSUE
+

CHANGE
MANAGEMENT
Peter Masfen, PFI’s Board Chair for the past sixteen years,
recently retired. In 2002, when Peter joined PFI, it had a portfolio
of 46 properties, valued at $209 million. Today it owns 93
properties, valued at over $1.2 billion. “Perhaps the highlight,”
says Peter, “was the merger with Direct Property Fund in 2013.
It was a really tough negotiation – one of the more challenging I’ve
been involved in – but the outcome was fair to the shareholders of
both companies. Over my time, it’s been very satisfying to oversee
the expansion in the size of PFI and the considerable
enhancement of shareholder value.”
“Peter’s legacy,” says new Chair, Anthony Beverley, “is PFI’s
unwavering focus on shareholder returns. Maintaining the
independence of the Board was also very important to Peter.
He would point out other companies where he felt that the
PETER MASFEN
interests of the management had
become higher than the
shareholders’ interests. ‘Strong,
stable returns’ is an expression
we use a lot and that comes from
Peter.
“Even though Peter’s retirement
marks the end of a significant
period in PFI’s history, there will
be no change in that philosophy.
New people are coming in,
certainly: David Thomson as an
Independent Director, for
example, and new staff
appointments. And Susan
Peterson came onto the Board a
couple of years ago. There’s been
careful succession planning and
that steadfast commitment to
purpose has not changed.”
There have been three recent
internal appointments: Nathan
Williams succeeded the previous
Financial Controller, Nick
Moloney joined in a new role as
Senior Analyst and Michael
Rippon also joined in a new role
as Property Manager.
ANTHONY BEVERLEY

Profiles of our team members
can be found on our website at
pfi.co.nz/people
04 . DAVID THOMSON
New Independent Director
05 . HUMPHRY ROLLESTON
Independent Director
06 . SUSAN PETERSON
Independent Director
07 . GREGORY REIDY
Managing Director
08 . SIMON WOODHAMS
General Manager
09 . CRAIG PEIRCE
CFO and Company Secretary
Their profiles can be found on
the PFI website.
“The internal management team
is second-to-none in the field in
which they operate,” says Peter
Masfen. “We’ve been through
market ups and downs – the
economic cycle – but, by keeping
our feet on the ground, we’ve
continued to grow and continued
to deliver for shareholders. It
has been a privilege to be
involved in PFI’s emergence as a
major listed property vehicle.”
01 . NATHAN WILLIAMS
Financial Controller
02 . NICK MOLONEY
Senior Analyst
03 . MICHAEL RIPPON
Property Manager

NEW TO THE TEAM
030201
06
070809
0405
NEW DIRECTOR
We’ve been through market ups
and downs – the economic cycle
– but, by keeping our feet on the
ground, we’ve continued to grow
and continued to deliver for
shareholders.
PETER MASFEN
1

eter Masfen ’s
retirement and the
acquisition of
306 Neilson Street,
Penrose, are the headline news at
the mid-point of 2018.
After 16 years as PFI’s Board
Chair, Peter retired at the
Annual Meeting in May. Anthony
Beverley, who had been Deputy
Chair, took over as Chair. Buddle
Findlay partner, David Thomson,
joined the Board as an
Independent Director in
February and was re-elected
at the Annual Meeting.
306 Nielson Street in Penrose
is an industrial building on just
under one hectare of land adjacent
to three properties already owned
by PFI. The $16 million acquisition
via a sale and lease-back is
earnings and Weighted Average
Lease Term (WALT) accretive, and
means PFI now has a 4.49-hectare
holding in four titles in Auckland’s
industrial engine room.
Otherwise, it has been business
as usual. Kiwi Steel’s lease of
the new development at 212
Cavendish Drive will commence
in April 2019. There have been 11
new leases and lease extensions,
with companies like Mainfreight
extending their lease at 36 Neales
Road by five years, and Peter Hay
Kitchens extending their lease at
47 Dalgety Drive by six years.
Nestlé were also secured on a
reduced footprint for a further
eight years at Carlaw Park, and
the key focus for the second half
will be leasing at this property.
The increase in rental income
from acquisitions and portfolio
activity, and the ongoing
reduction in expenses from 2017’s
internalisation means Adjusted
Funds from Operations (AFFO)
have, as expected, increased.
GOOD
TO
READ MORE
p.4
Trade Depot: the
sole tenant at the
306 Neilson Street
acquisition
P
GO
For more information
on our interim results,
please visit
pfi.co.nz/investor-centre/
results-centre/
2
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

2018
16
YEARS
DAVID THOMSON,
INDEPENDENT DIRECTOR, 2018
ACQUIRED
306 Neilson Street
Penrose.
million
9.4% increase in FFO earnings
per share and 2.5% increase
in AFFO earnings per share to
3.52 cents per share.
16.0
$
OUR STAND-OUT EVENTS
FOR THE HALF.
Governance is
oversight: making
sure that what
the company is
doing is
consistent with
its purpose, which
is to create
shareholder
returns and value.
Over my time,
it’s been very
satisfying to
oversee the
expansion in
the size
of PFI and the
considerable
enhancement
of shareholder
value.
PETER MASFEN,
PFI CHAIR, 2002–2018
ACHIEVED
industrial estate in four
titles in Auckland’s
industrial engine room.
4.49
ha
DAVID THOMSON appointed as
Independent Director
DELIVERED
PETER MASFEN retired after
16 years as Chair of PFI.
RETIRED
Independent
APPOINTED
1
1
20
MT
WELLINGTON
ONEHUNGA
AUCKLAND
MT
ROSKILL
Neilson St.
3

SET
BO
X
e will win who knows
when to fight and when
not to fight,” advises
Sun Tzu in his management
best-seller, ‘The Art of War’.
For reasons to be explained in a
moment, PFI knew the property
at 306 Nielson Street , Penrose,
well. They also knew that the
owners were considering selling
and banking the growth in the
property’s value since they had
bought it some years earlier.
Given such circumstances –
more often than not – PFI’s
tactic of choice would be an
off-market transaction. A quiet
chat, no-deadline due diligence,
an independent valuation, a bit
of an arm-wrestle; deal done.
Not to fight, in other words.
But sometimes, the market is
your friend. For a vendor, a
H
304 NEILSON STREET
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018
4

STATUS::
BUY
CATEGORY::
WAREHOUSE
OUR ROLE ::
We already own the three
neighbouring properties.
Buying this property results in
PFI owning a 4.49ha industrial
estate in four titles.
valuation can only ever be a
professional opinion, but
offers on the table are facts.
Sometimes, there’s no better way
to establish what a property is
worth than to let the market
decide. And so, when the vendor
decided to take the property to
market, PFI chose to fight.
The property at 306 Neilson
Street is just under a hectare
of land, with a well-configured
warehouse, in Penrose, Auckland.
As industrial as it comes. Dating
from the early 2000s, the building
is well-maintained and in good
condition; rated 100% NBS. The
warehouse has good stud height
and access via multiple roller
doors. Neilson Street is the main
route through the Penrose/
Onehunga industrial zone, with
motorway access at the Penrose
interchange.
Furthermore, this was a sale
and lease-back proposal. Trade
Depot describe themselves as
‘New Zealand’s leading online
home improvement store’. A sale
and lease-back would free up
their balance sheet for future
plans and they were offering an
initial ten-year term. From PFI’s
point of view, all very tidy.
But what made it even more
attractive was this: the three
neighbouring properties are
already in the PFI portfolio.
Buying this property would
complete the box set: PFI would
own a 4.49ha industrial estate
in four titles.
As PFI General Manager,
Simon Woodhams explains,
“We were the natural buyers: the
only ones able to develop the
property further, but in order to
get our hands on the property,
we had to go to market. Multiple
parties presented offers.
Ours was cash unconditional.
We successfully concluded the
deal at $16 million. The initial
lease is for ten years, with a
commencement rental of
$870,000 p.a. The transaction is
both earnings- and WALT-
accretive from point of settlement.
Over the medium to long term, the
property can be integrated with
the adjacent properties, providing
further egress points and yard
areas if required”.
There was not a lot of industrial
property for sale in China two
and a half thousand years ago, but
somehow Sun Tzu’s advice about
being flexible and nimble –
choosing the best tactics to
achieve your goal – are as relevant
today as they were then.
CASE STUDY
306 NEILSON STREET
312 NEILSON STREET
314 NEILSON STREET
306 NEILSON STREET — PENROSE
NEILSON STREET
NEILSON
STREET
312
314
304
306
TRADE
DEPOT
ONEHUNGA
5

Keeping the focus
on shareholder
returns and value.
DAVID THOMSON
6
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

NEW INDEPENDENT
DIRECTOR
AN
INDEPENDENT
VIEW
think the key to the role is in that
one word, ‘independent’. As an
Independent Director, you bring
to the table your particular
expertise, certainly, but more your
accumulated experience; a
different perspective, a wider
view,” says David Thomson, who
joined the Board in February 2018.
David is a partner and board
member of the law firm Buddle
Findlay; one of those who took on
law and commerce at university.
“I’ve been a corporate and
commercial lawyer for 25 years, in
New Zealand and in London,
involved in a wide range of
commercial transactions across
many sectors including
infrastructure and property. My
clients at Buddle Findlay include
Panuku Development Auckland
(Auckland Council’s property
arm) and the University of
Auckland (who have a property
portfolio of about $1.5 billion).”
“Governance is oversight: making
sure that what the company is
doing is consistent with its
purpose, which is to create
shareholder returns and value.
You’re listening to management’s
proposals, and then asking
questions: testing; ensuring that
decisions are being made carefully
and well.
“The challenge I see now for PFI
is continuing to manage growth
carefully and well. The Board’s
very clear that we’re not
interested in growth for growth’s
sake, but growth that improves
shareholder value.”
DAVID
THOMSON
I
7

THE NUMBERS
THINGS YOU
SHOULD KNOW ABOUT
THE INDUSTRIAL
PROPERTY SECTOR
AND PFI...
KEY PERFORMANCE INDICATORS
02. Overall growth in
industrial land values in
the three months to
March 2018.
2.6%
INCREASE IN LAND
VALUES
01. CBRE predict 1.5% vacancy of
prime industrial property in 2018,
dropping to 1.3% in 2019.
1.5%
VACANCY FORECAST
06. Up from 5.33 years six months ago.
5.39YEARS
PFI’S WEIGHTED
AVERAGE LEASE TERM
8
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

04. ANZ Bank is predicting
a slightly softer outlook for
GDP than six months ago.
2.5%
ECONOMIC GROWTH
05. Occupancy of PFI’s portfolio.
Down from 99.9% six months ago.
98.1%
07. Up from $1.21bn six months ago.
$
1.24bn
PFI’S PORTFOLIO VALUE
03. Across 49 developments in
Auckland. Over the past five years
average annual new supply has
been ~183,000 sqm.
225,000 sqm
INDUSTRIAL SPACE
UNDER CONSTRUCTION
PFI’S OCCUPANCY
9

10
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

Property
for
Industry
Limited
Interim
Financial
Statements
30 June
2018
FINANCIAL
STATEMENTS
11

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2018
The accompanying notes form part of these financial statements.
UNAUDITEDUNAUDITED
ALL VALUES IN $000SNOTE
6 months ended
30 June 2018
6 months ended
30 June 2017
INCOME
Rental and management fee income2.244,68640,156
Licence income50–
Interest income23
Fair value gain on investment properties2.17,9485,970
Gain on disposal of investment properties531,897
Fair value gain on derivative financial instruments647–
Material damage insurance income–505
Total income53,38648,531
EXPENSES
Property costs2.3(6,341)(5,906)
Interest expense and bank fees(9,159)(8,388)
Administrative expenses6.1(2,378)(690)
Management fees6.3–(2,919)
Fair value loss on derivative financial instruments–(582)
Termination of management agreement5–(42,869)
Total expenses(17,878)(61,354)
Profit / (loss) before taxation35,508(12,823)
Income tax (expense) / benefit6.2(5,938)7,186
Profit / (loss) and total comprehensive income after income tax attributable
to the shareholders of the Company 29,570(5,637)
Basic and diluted earnings per share (cents)4.15.93(1.25)
12
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2018
The accompanying notes form part of these financial statements.
Cents
per share
(cents)
No. of
shares
(#)
Ordinary
shares
($000)
Retained
earnings
($000)
Total
equity
($000)
Balance as at 1 January 2017 (audited)–452,458,592493,220262,918756,138
Total comprehensive income–––(5,637)(5,637)
Dividends
Q4 2016 final dividend – 8/3/20172.05––(9,275)(9,275)
Q1 2017 interim dividend – 29/5/20171.75––(7,918)(7,918)
Balance as at 30 June 2017 (unaudited)–452,458,592493,220240,088733,308
Balance as at 1 January 2018 (audited)–498,723,330562,429280,514842,943
Total comprehensive income–––29,57029,570
Dividends
Q4 2017 final dividend – 7/3/20182.15––(10,723)(10,723)
Q1 2018 interim dividend – 31/5/20181.80––(8,976)(8,976)
Balance as at 30 June 2018 (unaudited)–498,723,330562,429290,385852,814
13

UNAUDITEDAUDITED
ALL VALUES IN $000SNOTE30 June 201831 December 2017
CURRENT ASSETS
Cash at bank688605
Accounts receivable, prepayments and other assets2,6641,295
Taxation receivable–32
Total current assets3,3521,932
NON-CURRENT ASSETS
Investment properties2.11,239,5241,210,805
Property, plant and equipment8295
Derivative financial instruments3.21,304272
Goodwill29,08629,086
Total non-current assets1,269,9961,240,258
Total assets1,273,3481,242,190
CURRENT LIABILITIES
Derivative financial instruments3.2671372
Accounts payable, accruals and other liabilities6,8068,261
Taxation payable3,187–
Total current liabilities10,6648,633
NON-CURRENT LIABILITIES
Borrowings3.1387,112370,635
Derivative financial instruments3.211,18311,095
Deferred tax liabilities6.211,5758,884
Total non-current liabilities409,870390,614
Total liabilities420,534399,247
Net assets4.2852,814842,943
EQUITY
Share capital562,429562,429
Retained earnings290,385280,514
Total equity852,814842,943
These Group financial statements are signed on behalf of Property for Industry Limited and were authorised for issue on 8 August 2018.
Anthony Beverley Susan Peterson
Chairman Chair, Audit and Risk Committee
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
The accompanying notes form part of these financial statements.
14
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

The accompanying notes form part of these financial statements.
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2018
6 months ended
30 June 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Property income received44,65440,236
Licence income50–
Net GST paid(500)(886)
Interest received23
Interest and other finance costs paid(8,983)(8,600)
Payments to suppliers and employees(10,736)(9,684)
Income tax paid(28)(2,630)
Termination of management agreement–(42,869)
Net cash flows from operating activities24,459(24,430)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment properties8521,648
Acquisition of investment properties(16,030)(14,262)
Acquisition of assets relating to a business combination–(106)
Acquisition of property, plant and equipment13–
Expenditure on investment properties(5,012)(5,095)
Capitalisation of interest on development properties(7)–
Net cash flows from investing activities(20,951)2,185
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from syndicated bank facility16,27439,900
Dividends paid to shareholders(19,699)(17,193)
Net cash flows from financing activities(3,425)22,707
Net increase in cash and cash equivalents83462
Cash and cash equivalents at beginning of period605(113)
Cash and cash equivalents at end of period688349
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2018
15

1. GENERAL INFORMATION17
1.1. Reporting entity17
1.2. Basis of preparation17
1.3. New standards, amendments and interpretations17
1.4. Critical judgements, estimates and assumptions17
1.5. Accounting policies17
1.6. Adoption of new standards18
1.7. Significant events and transactions18
2. PROPERTY18
2.1. Investment properties18
2.2. Rental and management fee income19
2.3. Property costs19
2.4. Net rental income20
3. FUNDING20
3.1. Borrowings20
3.2. Derivative financial instruments21
4. INVESTOR RETURNS AND INVESTMENT METRICS22
4.1. Earnings per share22
4.2. Net tangible assets per share22
5. INTERNALISATION OF MANAGEMENT22
6. OTHER23
6.1. Administrative expenses23
6.2. Taxation23
6.3. Related party transactions24
6.4. Operating segments25
6.5. Capital commitments25
6.6. Subsequent events25
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2018
16
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

1. GENERAL INFORMATION
IN THIS SECTION
This section sets out the basis upon which the Group's Interim Financial Statements are prepared.
1.1. Reporting entity
These unaudited interim financial statements are for Property for Industry Limited (the Company) and its subsidiary P.F.I. Property No. 1 Limited
(PFI No. 1) (together, the Group). The Company is a limited liability company incorporated in New Zealand and is registered under the New Zealand
Companies Act 1993. The Company is a FMC reporting entity under Part 7 of the Financial Markets Conduct Act 2013 and these unaudited consolidated
interim financial statements have been prepared in accordance with the requirements of the NZX Main Board Listing Rules. The Company is listed on the
NZX Main Board (NZX: PFI).
The Group’s principal activity is property investment and management in New Zealand.
1.2. Basis of preparation
These unaudited interim financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP),
the Financial Reporting Act 2013 and the Financial Markets Conduct Act 2013. They comply with NZ IAS 34 ‘Interim Financial Reporting’ and IAS 34
‘Interim Financial Reporting’. The unaudited interim financial statements also comply with International Financial Reporting Standards (IFRS).
The unaudited interim financial statements have been prepared on the historical cost basis except where otherwise identified. All financial information
is presented in New Zealand dollars and has been rounded to the nearest thousand.
These unaudited interim financial statements should be read in conjunction with the Annual Report for the year ended 31 December 2017 which may
be downloaded from the Company’s website (www.propertyforindustry.co.nz/investor-centre/reports-and-presentations).
1.3. New standards, amendments and interpretations
At the date of authorisation of these unaudited interim financial statements, the following relevant standard was in issue but not yet effective and has
not been applied in preparing these unaudited interim financial statements.
NZ IFRS 16 ‘Leases’: this standard will replace the current guidance in NZ IAS 17. Under NZ IFRS 16, a contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Under NZ IAS 17, a lessee was required to
make a distinction between a finance lease (on balance sheet) and an operating lease (off balance sheet). NZ IFRS 16 now requires a lessee to recognise
a lease liability reflecting future lease payments and a ‘right-of-use asset’ for virtually all lease contracts. Included is an optional exemption for certain
short-term leases and leases of low-value assets; however, this exemption can only be applied by lessees.
For lessors, the accounting for leases under NZ IFRS 16 is almost the same. However, as the guidance on the definition of a lease has been updated
(as well as the guidance on the combination and separation of contracts), lessors will also be affected by the new standard.
The standard is effective for accounting periods beginning on or after 1 January 2019 and the Group intends to adopt NZ IFRS 16 on its effective date.
The Group has assessed the impact of adopting NZ IFRS 16. As a lessor, there are no changes to the Group’s current accounting treatment and
disclosure of leases. As a lessee, the Group will apply NZ IFRS 16 using the simplified retrospective approach. Under this approach, the Group will
recognise a right of use asset and lease liability of approximately $403,000 as at 1 January 2019, representing the present value of the remaining
lease cash flows.
1.4. Critical judgements, estimates and assumptions
In applying the Group’s accounting policies, the Board and Management continually evaluate judgements, estimates and assumptions that may have
an impact on the Group. The significant judgements, estimates and assumptions made in the preparation of these unaudited interim financial statements
were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2017.
1.5. Accounting policies
The accounting policies adopted are the same as those applied by the Group in its consolidated financial statements as at and for the year ended
31 December 2017, other than following the adoption of new standards outlined in section 1.6, which follows on the next page.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2018
17

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2018
1. GENERAL INFORMATION (CONTINUED)
1.6. Adoption of new standards
The Group has adopted both NZ IFRS 9 ‘Financial Instruments’ and NZ IFRS 15 ‘Revenue from contracts with customers’, as required. There have been no
changes required to these unaudited interim financial statements by NZ IFRS 9.
Implementation of NZ IFRS 15 has required a change in the presentation of service charges in the consolidated statement of comprehensive income.
Previously the Group showed the income generated from service charges as an offset to service charge expenses within non-recoverable property costs.
With the implementation of NZ IFRS 15, it has been necessary to separate these components between income and expense. As a result, the 2017
comparatives have been restated as follows: Rental and management fee income increased by $4,445,000 and property costs increased by $4,445,000.
These have also had a flow on impact to the statement of cash flows where property income received has increased by $4,445,000 and payments to
suppliers and employees has also increased by $4,445,000.
1.7. Significant events and transactions
The financial position and performance of the Group was affected by the following events and transactions that occurred during the reporting period:
Investment property acquisition
On 31 May 2018, the Group purchased an investment property located at 306 Neilson Street, Penrose, for a net purchase price of $16.0 million.
2. PROPERTY
IN THIS SECTION
This section shows the real estate assets used to generate the Group's trading performance which are considered to be the most relevant to the
operations of the Group.
2.1. Investment properties
UNAUDITEDAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2018
12 months ended
31 December 2017
Opening balance1,210,8051,083,300
Capital movements:
Additions16,03084,283
Disposals(32)(12,188)
Capital expenditure4,22410,422
Capitalised interest7–
Movement in lease incentives, fees and fixed rental income5421,393
20,77183,910
Unrealised fair value gain (i)7,94843,595
Closing balance1,239,5241,210,805
18
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2018
2.1. Investment properties (continued)
(i) Valuation
All investment properties were valued by independent valuers as at 31 December 2017. The Board determined that a desktop review of the property
portfolio should be undertaken by CB Richard Ellis (CBRE), Colliers International (Colliers), Jones Lang LaSalle (JLL) or Savills as at 30 June 2018
to ensure that investment properties continue to be held at fair value. In addition to this desktop review, the following ten investment properties were
subject to independent valuations due to significant capital expenditure or leasing activity undertaken during the period:
ALL VALUES IN $000SValuerValuation
Carlaw Park Gateway Building, ParnellCBRE35,500
Carlaw Park Office Complex, ParnellCBRE61,600
50 Carbine Road, Mt WellingtonCBRE4,000
212 Cavendish Drive, ManukauColliers25,500
47 Dalgety Drive, ManukauSavills16,500
229 Dairy Flat Highway, North ShoreColliers28,000
8 McCormack Place, WellingtonColliers9,380
509 Mt Wellington Highway, Mt WellingtonSavills16,750
36 Neales Road, East TamakiColliers20,900
10 Niall Burgess Road, Mt WellingtonSavills4,800
Total222,930
As a result of the independent valuations, the unrealised net increase in the value of investment properties for the six months ended 30 June 2018
was $7,948,000 (six months ended 30 June 2017: $5,970,000). The portfolio will next be revalued by independent valuers as at 31 December 2018.
2.2. Rental and management fee income
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2018
6 months ended
30 June 2017
Gross rental receipts and service charge income recovered from tenants43,65839,607
Fixed rental income adjustments566209
Capitalised lease incentive adjustments226170
Management fee income236170
Total rental and management fee income44,68640,156
2.3. Property costs
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2018
6 months ended
30 June 2017
Service charge expenses(5,184)(4,445)
Bad and doubtful debts recovery / (expense)39(38)
Other non-recoverable property costs(1,196)(1,423)
Total property costs(6,341)(5,906)
Other non-recoverable costs represents property maintenance not recoverable from tenants, property valuation fees and property leasing costs.
2. PROPERTY (CONTINUED)
19

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2018
2.4. Net rental income
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2018
6 months ended
30 June 2017
Gross rental receipts and service charge income recovered from tenants43,65839,607
Fixed rental income adjustments566209
Capitalised lease incentive adjustments226170
less: Service charge expenses(5,184)(4,445)
Net rental income39,26635,541
3. FUNDING
IN THIS SECTION
This section outlines how the Group manages its capital structure, financing costs and exposure to interest rate risk.
3.1. Borrowings
(i) Net borrowings
UNAUDITEDAUDITED
ALL VALUES IN $000S30 June 201831 December 2017
Syndicated bank facility drawn down – non-current288,974272,700
Fixed rate bonds – non-current100,000100,000
Unamortised borrowings establishment costs(1,862)(2,065)
Net borrowings387,112370,635
Weighted average interest rate for drawn debt (inclusive of current interest rate swaps, margins and line fees)4.90%4.96%
Weighted average term to maturity (years)3.203.70
(ii) Syndicated bank facility
The Group has facilities (A and B) with a banking syndicate comprising ANZ Bank New Zealand Limited (ANZ), Bank of New Zealand (BNZ),
Commonwealth Bank of Australia (CBA) and Westpac New Zealand Limited (Westpac) for $375,000,000.
Facility A for $187,500,000 and Facility B for $187,500,000 are provided by ANZ, BNZ, CBA and Westpac. Facility A is a revolving facility of a long-term
nature and expires 4 May 2020. Facility B is a revolving facility of a long term nature and expires 4 May 2021.
UNAUDITEDAUDITED
ALL VALUES IN $000S30 June 201831 December 2017
ANZ101,625101,625
BNZ91,12591,125
CBA91,12591,125
Westpac91,12591,125
Total facilities available375,000375,000
Syndicated bank facility drawn down – non-current288,974272,700
Undrawn facility available86,026102,300
Total facilities available375,000375,000
2. PROPERTY (CONTINUED)
20
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2018
3.1. Borrowings (continued)
(iii) Fixed rate bonds
On 28 November 2017, the Group issued $100 million of fixed rate bonds, bearing a fixed interest rate of 4.59% per annum. The bonds are quoted on
the NZX Debt Market and mature on 28 November 2024. Interest is payable quarterly in February, May, August and November in equal instalments.
(iv) Security
The syndicated bank facility and fixed rate bonds are secured by way of a security trust deed and registered mortgage security which is required to be
provided over Group properties with current valuations of at least $950,000,000 (31 December 2017: $950,000,000). In addition to this, the syndicated
bank facility agreement and the fixed rate bond terms also contain a negative pledge. The Company and PFI No. 1 are guarantors to the syndicated bank
facility and the fixed rate bonds.
3.2. Derivative financial instruments
(i) Fair values
UNAUDITEDAUDITED
ALL VALUES IN $000S30 June 201831 December 2017
Non-current assets1,304272
Current liabilities(671)(372)
Non-current liabilities(11,183)(11,095)
Total(10,550)(11,195)
(ii) Notional values, maturities and interest rates
UNAUDITEDAUDITED
30 June 201831 December 2017
Notional value of interest rate swaps – fixed rate payer – start dates commenced ($000S)220,000220,000
Notional value of interest rate swaps – fixed rate receiver
1
– start dates commenced ($000S)100,000100,000
Notional value of interest rate swaps – fixed rate payer – forward starting ($000S)175,000155,000
Total ($000S)495,000475,000
Percentage of borrowings fixed (%)57%59%
Fixed rate payer swaps:
Average period to expiry – start dates commenced (years)2.132.62
Average period to expiry – forward starting (years from commencement)3.693.65
Average (years)2.823.04
Fixed rate payer swaps:
Average interest rate
2
– start dates commenced (%)4.37%4.37%
Average interest rate
2
– forward starting (% during effective period)3.51%3.55%
Average (%)3.99%4.03%
1 The Group has $100 million fixed rate receiver swaps for the duration of the $100 million fixed rate bonds, the effect of the fixed rate receiver swaps is to convert the $100 million fixed
rate bonds to floating interest rates.
2 Excluding margin and fees.
Key estimates and assumptions: Derivative financial instruments
The fair value of derivative financial instruments are determined from valuations prepared by independent treasury advisers using Level 2 valuation
techniques (31 December 2017: Level 2). These are based on the present value of estimated future cash flows accounting for the terms and maturity
of each contract and the current market interest rates at reporting date. Fair values also reflect the current creditworthiness of the derivative
counterparty. These values are verified against valuations prepared by the respective counterparties. The valuations were based on market rates at
30 June 2018 of between 2.00% for the 90 day BKBM (31 December 2017: 1.88%) and 3.02% for the 10 year swap rate (31 December 2017: 3.14%).
There were no changes to these valuation techniques during the reporting period.
3. FUNDING (CONTINUED)
21

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2018
4. INVESTOR RETURNS AND INVESTMENT METRICS
IN THIS SECTION
This section summarises the earnings per share and net tangible assets per share, which are common investment metrics.
4.1. Earnings per share
UNAUDITEDUNAUDITED
6 months ended
30 June 2018
6 months ended
30 June 2017
Total comprehensive income for the period attributable to the shareholders of the Company ($000)29,570(5,637)
Weighted average number of ordinary shares (shares)498,723,330452,458,592
Basic and diluted earnings per share (cents)5.93(1.25)
4.2. Net tangible assets per share
UNAUDITEDAUDITEDUNAUDITED
30 June 201831 December 201730 June 2017
Net assets ($000)852,814842,943733,308
Less: Goodwill ($000)(29,086)(29,086)(29,086)
Net tangible assets ($000)823,728813,857704,222
Closing shares on issue (shares)498,723,330498,723,330452,458,592
Net tangible assets per share (cents)165163156
5. INTERNALISATION OF MANAGEMENT
On 22 June 2017, the Company’s shareholders approved the internalisation of the management of the Company. As a result, effective from 30 June 2017,
the Company terminated the management and administrative services contract that was undertaken by PFIM Limited (“PFIM”). PFIM had subcontracted
the property and administrative function to McDougall Reidy & Co Limited (“MRCO”); this management and administrative services contract was also
terminated.
The Company paid $41.9 million to PFIM for the termination of the management and administrative services contract. In addition, the Company acquired
certain assets of PFIM and MRCO (comprising $0.1 million, for which a payment of $0.1 million was paid by the Company). Accordingly, the net
consideration for the termination of the management and administrative services contract and the purchase of certain assets was $42.0 million.
The previous employees of MRCO are now directly employed by the Company with the exception of three senior executives who have entered into
independent service contracts with the Company.
For further information on the internalisation of management, please refer to the consolidated financial statements as at and for the year ended
31 December 2017.
22
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2018
6. OTHER
IN THIS SECTION
This section includes additional information that is considered less significant in understanding the financial performance and position of the
Group, but is disclosed to comply with NZ IAS 34 ‘Interim Financial Reporting’ and IAS 34 ‘Interim Financial Reporting’.
6.1. Administrative expenses
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2018
6 months ended
30 June 2017
Audit fees and other fees paid to auditors8867
Employee and independent contractor benefits expense1,242–
Directors’ fees322190
Office expenses238–
Rent55–
Depreciation27–
Other expenses406433
Total administrative expenses 2,378690
6.2. Taxation
(i) Reconciliation of accounting profit before income tax to income tax (expense) / benefit
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2018
6 months ended
30 June 2017
Profit / (loss) before income tax35,508(12,823)
Prima facie income tax calculated at 28%(9,942)3,590
Adjusted for:
Non-tax deductible revenue and expenses(4)(7)
Fair value gain on investment properties2,2251,672
Gain on disposal of investment properties15531
Depreciation1,2781,134
Disposal of depreciable assets–(77)
Deductible capital expenditure1,042420
Lease incentives, fees and fixed rental income166182
Derivative financial instruments187(157)
Impairment allowance11(10)
Current year tax losses utilised / (carried forward)1,995(7,278)
Current tax prior period adjustment(220)–
Current taxation expense(3,247)–
Current year tax losses (utilised) / carried forward(1,995)7,278
Depreciation(310)(77)
Lease incentives, fees and fixed rental income(188)(182)
Derivative financial instruments(187)157
Impairment allowance(11)10
Deferred taxation benefit(2,691)7,186
Total taxation reported in Consolidated Statement of Comprehensive Income(5,938)7,186
23

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2018
6.2. Taxation (continued)
Prior to the internalisation of management on 30 June 2017, the Group received a binding tax ruling from Inland Revenue on 22 May 2017 which
confirmed that the payment for the termination of the management agreement is deductible for tax purposes. This resulted in current year tax losses
to be carried forward which have now been utilised.
(ii) Deferred tax
AUDITEDUNAUDITEDUNAUDITED

ALL VALUES IN $000S
31 December 2017
As at
6 months ended
30 June 2018
Recognised in profit
30 June 2018
As at
Deferred tax assets
Losses carried forward(1,995)1,995–
Derivative financial instruments(3,142)187(2,955)
Impairment allowance(42)11(31)
Gross deferred tax assets(5,179)2,193(2,986)
Deferred tax liabilities
Investment properties14,06349814,561
Gross deferred tax liabilities14,06349814,561
Net deferred tax liability8,8842,69111,575
6.3. Related party transactions
The Company internalised its management on 30 June 2017 and paid $41.9 million to PFIM. For further details refer to Note 5.
Gregory Reidy was a Director of both PFIM and the Company, accordingly this transaction and the management fees detailed below were related party
transactions.
(i) Management fees
From 30 June 2017 no further base management fees or performance fees are payable. Instead the costs of managing the Company are incurred
directly.
Prior to the internalisation, PFIM was entitled to be paid base management and performance fees for the provision of management and administrative
services, pursuant to a management and administrative services contract.
(a) Base management fees
The base management fee was payable monthly and is calculated as one twelfth of:
• 0.725% of total tangible assets under management up to $425 million;
• 0.450% of total tangible assets under management above $425 million and below $775 million; and
• 0.350% of total tangible assets under management above $775 million.
During the six months ended 30 June 2017, the Group incurred base management fees totalling $2,919,000 from PFIM, for the provision of management
and administrative services.
(b) Performance fees
A performance fee was calculated and payable on a quarterly basis. The performance fee was calculated as 10% of the change in shareholder returns
above 10% per annum (2.5% per quarter) and under 15% per annum (3.75% per quarter). Where shareholder returns exceed 3.75% in a quarter, no
payment was due for the actual amount of the increase above 3.75% but the amount of the increase above 3.75% was carried forward and added to the
calculation of shareholder returns in the next seven quarters. However, if shareholder returns were less than 2.5% in a quarter, the deficit was carried
forward and subtracted from the calculation of shareholder returns for the next seven quarters.
During the six months ended 30 June 2017, the Group incurred no performance fees from PFIM.
6. OTHER (CONTINUED)
24
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2018
6.3. Related party transactions (continued)
(ii) Key management personnel
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2018
6 months ended
30 June 2017
Directors’ fees322190
Short-term independent contractors benefits671–
Key management personnel993190
(iii) Other related party transactions
On 30 June 2017, the Group entered into a lease agreement with MRCO to lease the head office for the Group. Gregory Reidy, a senior executive who
became an independent contractor with the Company on 30 June 2017 is also a Director of MRCO. The head office was sold to a unrelated party on 6
November 2017.
On 30 June 2017, the Group entered into a licence agreement with MRCO enabling MRCO to operate its business from the Group’s premises, access the
Group’s IT and support systems and employees for its business. During the six months ended 30 June 2018, licence income of $50,000 was received
from MRCO.
On 1 July 2017, Susan Peterson became a Director of ASB Bank Limited (ASB), a 100% subsidiary of CBA. During the six months ended 30 June 2018,
the Group incurred $1,759,000 of interest expense and bank fees and received $253,000 of interest income from CBA. As at 30 June 2018: $489,000
(31 December 2017: $499,000) was owing to CBA and included in accounts payable, accruals and other liabilities and $44,000 (31 December 2017:
$48,000) was owing from CBA and included in accounts receivable. As per note 3.1(ii), CBA provided the Group with a facility of $91,125,000 of which
$70,220,734 was drawn as at 30 June 2018. As at June 30 2018, interest rate swaps with the following notional values were held with CBA:
$60,000,000 current fixed rate payer swaps, $30,000,000 forward starting fixed rate payer swaps, $50,000,000 current fixed rate receiver swaps.
No related party debts have been written off or forgiven during the six months ended 30 June 2018 (six months ended 30 June 2017: nil).
During the six months ended 30 June 2018, fees paid to Directors of the Group were $187,000 (six months ended 30 June 2017: $190,000).
On 8 May 2018, Peter Masfen retired from the Board of Directors of the Company as Chairman and Independent Director. Mr Masfen was first elected
as a Director of the Company on 17 May 2002, and had held office as a Director of the Company since that date. At the 23 May 2008 Annual Meeting,
the Company confirmed that retirement payments (being the total remuneration of the retiring Director, in any three years chosen by the Company)
to eligible Directors (which includes Mr Masfen) will be calculated in respect of that Director’s remuneration prior to the increase approved at the
23 May 2008 meeting. The rationale for this was that the fees paid to Directors at that time did not reflect market rates, as they had remained unchanged
since the incorporation of the Company over 14 years prior to that meeting. As such, a retirement allowance of $135,000 was payable to Mr Masfen and
was paid on his retirement.
At the 23 May 2008 meeting, it was also noted that no retirement remuneration will be paid to Directors who are appointed after 1 May 2004. It is noted
that Humphry Rolleston is the only other current Director who was appointed prior to 1 May 2004 and is entitled to this form of payment.
As at 30 June 2018, Directors of the Company held 1,041,371 (31 December 2017: 5,809,115) shares beneficially in the Company and 110,825
(31 December 2017: 408,741) shares non-beneficially in the Company.
6.4. Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating
decision-maker has been identified as the Board of Directors. The Group is internally reported as a single operating segment to the chief operating
decision-maker.
6.5. Capital commitments
As at 30 June 2018 the Group had capital commitments totalling $8,954,000 (31 December 2017: $7,666,000) relating to work on investment properties.
6.6. Subsequent events
On 8 August 2018, the Directors of the Company approved the payment of a net dividend of $8,977,000 (1.8000 cents per share) to be paid on 31 August
2018. The gross dividend (2.2538 cents per share) carries imputation credits of 0.4538 cents per share. The payment of this dividend will not have any
tax consequences for the Group and no liability has been recognised in the Consolidated Statement of Financial Position as at 30 June 2018 in respect
of this dividend.
6. OTHER (CONTINUED)
25

Report on the interim financial statements
We have reviewed the accompanying interim financial statements of Property for Industry Limited (the “Company”) and its controlled entity (the
“Group”) on pages 12 to 25, which comprise the consolidated statement of financial position as at 30 June 2018, and the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the period ended on that
date, and selected explanatory notes.
Directors’ responsibility for the interim financial statements
The Directors are responsible on behalf of the Company for the preparation and presentation of these interim financial statements in accordance with
New Zealand Equivalent to International Accounting Standard 34 Interim Financial Reporting (NZ IAS 34) and for such internal controls as the Directors
determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility
Our responsibility is to express a conclusion on the accompanying interim financial statements based on our review. We conducted our review in
accordance with the New Zealand Standard on Review Engagements 2410 Review of Financial Statements Performed by the Independent Auditor of the
Entity (NZ SRE 2410). NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the interim
financial statements, taken as a whole, are not prepared in all material respects, in accordance with NZ IAS 34. As the auditors of the Group, NZ SRE
2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial statements.
A review of financial statements in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs procedures, primarily
consisting of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review
procedures. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International
Standards on Auditing (New Zealand) and International Standards on Auditing. Accordingly, we do not express an audit opinion on these interim
financial statements.
We are independent of the Group. Our firm carries out other services for the Group in the area of other related assurance services comprising of voting
procedures over the annual shareholders’ meeting. The provision of this other service has not impaired our independence as auditor of the Group.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements of the Group are not prepared,
in all material respects, in accordance with NZ IAS 34.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our review work has been undertaken so that we might state to the Company’s
shareholders those matters which we are required to state to them in our review report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our review procedures, for
this report, or for the conclusion we have formed.
For and on behalf of:
Chartered Accountants Auckland
8 August 2018
INDEPENDENT REVIEW REPORT
To the shareholders of Property for Industry Limited
26
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

insight
creative.co.nz
PFI119
2018
AUGUST
§
2018 Half-year dividend payment
NOVEMBER
§
2018 Third-quarter announcement
§
2018 Third-quarter dividend payment
2019
FEBRUARY
§
2018 Full-year announcement
§
2018 Annual report released
MARCH
§
2018 Final dividend payment
ISSUER OF SHARES AND BONDS
Property for Industry Limited
Shed 24, Prince’s Wharf
147 Quay Street
PO Box 1147
Auckland 1140
Tel: +64 9 303 9450
Fax: +64 9 303 9657
propertyforindustry.co.nz
info@propertyforindustry.co.nz
DIRECTORS
Anthony Beverley (Chairman)
David Thomson
Humphry Rolleston
Susan Peterson
Gregory Reidy
GENERAL MANAGER
Simon Woodhams
Tel: +64 9 303 9652
woodhams@propertyforindustry.co.nz
CHIEF FINANCIAL OFFICER /
COMPANY SECRETARY
Craig Peirce
Tel: +64 9 303 9651
peirce@propertyforindustry.co.nz
AUDITOR
PricewaterhouseCoopers
188 Quay Street
Private Bag 92162
Auckland 1142
Tel: +64 9 355 8000
Fax: +64 9 355 8001
CORPORATE LEGAL
ADVISOR
Chapman Tripp
23 Albert Street
PO Box 2206
Auckland 1140
Tel: +64 9 357 9000
Fax: +64 9 357 9099
VALUATION PANEL
CBRE Limited
Colliers International New Zealand
Limited
Jones Lang LaSalle Limited
Savills (NZ) Limited
BANKERS
ANZ Bank New Zealand Limited
Bank of New Zealand
Commonwealth Bank of Australia
Westpac New Zealand Limited
SECURITY TRUSTEE
New Zealand Permanent Trustees
Limited
34 Shortland Street
PO Box 1598
Auckland 1140
Tel: 0800 371 471
BOND SUPERVISOR
Public Trust
34 Shortland Street
PO Box 1598
Auckland 1140
Tel: 64 9 985 5300
REGISTRAR
Computershare Investor Services
159 Hurstmere Road
Private Bag 92119
Auckland 1142
Tel: +64 9 488 8777
Fax: +64 9 488 8787
investorcentre.com/nz
This Interim Report is dated 8 August 2018 and signed on behalf of the Board by:
Anthony Beverley Susan Peterson
Chairman Chair, Audit and Risk Committee
DIRECTORYCALENDAR
27

306 Neilson Street, Penrose
Trade Depot: the sole tenant at this new acquisition
28
PROPERTY FOR INDUSTRY LIMITED INTERIM REPORT — 2018

29

www.propertyforindustry.co.nz