Earnings Growth, Valuation Gains, 2019 Priorities Advanced

NZX and media
announcement
—
19 August | 2019


Page 1

EARNINGS GROWTH, VALUATION GAINS, 2019
PRIORITIES ADVANCED
The PFI management team will present these results via live webcast from 10.30 am NZT today. To
view and listen to the webcast, please visit https://edge.media-server.com/mmc/p/pjdkgz6u. We
recommend you log on a few minutes before the start time, and if you cannot attend the live webcast, a
recording will be available on PFI’s website shortly after the conclusion of the live event. Alternatively,
you can listen to the live presentation by dialling in on 0800 667 018 and using the access PIN 7170729.

Highlights
▪ Earnings growth: interim profit after tax up $16.8 million, Funds From Operations (FFO)
1
earnings
per share in line with the prior interim period, Adjusted Funds From Operations (AFFO) earnings per
share up 16.8% to 4.11 cents per share
▪ Valuation gains: $23.4 million or 8.8% increase in the value of 13 properties from independent
valuations, net tangible assets per share up 5.4 cents or 3.0% to 183.1 cents per share
▪ Positive portfolio activity: over 72,000 square metres or 11% of the portfolio leased during the
interim period to 14 tenants for an average increase in term of 6.8 years, market rent reviews settled
at an average of ~4.8% above December 2018 market rental assessments
▪ 2019 priorities advanced: two Auckland industrial opportunities secured totalling $51.4 million, 229
Dairy Flat Highway in Albany now being marketed for sale, $19.1 million of value-add strategies
committed to or in advanced stages of planning

Property for Industry Limited (PFI, the Company) today announced growth in earnings and valuation
gains as it made two strategic additions to its portfolio since the beginning of the year.

“Our strategy is focused on ensuring we optimise our portfolio and acquire the assets that will help us
deliver the strong, stable returns our investors expect,” says PFI Chief Executive Officer Simon
Woodhams. “By finding the right opportunities, looking for ways to add value where that makes sense,
and maximising the rental returns from our existing portfolio, we continue to make the disciplined gains
that have underpinned PFI’s growth since inception.”

Financial performance
PFI ended the current interim period with a $16.8 million or 56.9% increase over the prior interim period
in profit after tax.

Net rental income for the interim period increased by $1.7 million or 4.3% to $41.0 million. Positive
leasing activity contributed an increase of $1.1 million or 2.9%, and acquisitions contributed a further
increase of $1.0 million. These increases were partially offset by lost rental income from properties now
under re-development ($0.3 million), disposals ($0.1 million) and lost rental income from a fire at 314
Neilson Street, Penrose
2
in April 2019.

Property costs – net of recoveries from tenants – were in line with the prior interim period.

--------

1
Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) are non-GAAP financial information and are
common investor metrics, which have been calculated in accordance with the guidelines issued by the Property Council of
Australia. Please refer to Appendix 1 for more detail as to how these measures were calculated.
2
PFI has material damage insurance up to a value of $9.65 million and 24 months of business interruption insurance in place for
this property. The final amounts to be received under these insurances are yet to be determined and received.

NZX and media
announcement
—
19 August | 2019


Page 2

Interest expense and bank fees increased $0.4 million or 4.6% as a result of average borrowings
increasing by $32.1 million. This increase was partially offset by a reduction in the Company’s weighted
average cost of debt
3
, which reduced ~34 basis points from the end of the prior interim period to 4.56%.

Administrative expenses were in line with the prior interim period.

PFI’s effective current tax rate for the first half of 2019 was 22.5%, up from 19.5%
4
in the prior interim
period due to a higher-than-average level of maintenance capex in the prior interim period.

All told, the Company made a profit after tax for the interim period of $46.4 million or 9.30 cents per
share, up $16.8 million or 3.37 cents per share on the prior interim period. A large portion of the increase
is due to a $15.5 million increase in the fair value gain on investment properties as compared to the prior
interim period.

FFO and AFFO
FFO earnings per share were in line with the prior interim period and slightly ahead of the second half
of 2018, with increases in net rental income offset by increased interest expense and bank fees and
current taxation (refer Appendix 2).

AFFO earnings per share were 0.59 cents per share or 16.8% ahead of the prior interim period and 0.14
cents per share of 3.5% ahead of the second half of 2018 (refer Appendix 2). Maintenance capex was
the key driver of this increase: in the first half of 2018, maintenance capex totalled $3.5 million or 57
basis points on an annualised basis. In the second half of 2018, this reduced significantly to $1.0 million
or 8 basis points on an annualised basis, and in the first half of 2019, a low level was also recorded:
$0.4 million or 6 basis points.

As noted in previous communications, PFI expects that maintenance capex will average 35 basis points
per annum, but that the timing of this will be volatile. Given a low level of maintenance capex was
incurred in the first half of 2019, a slightly lower level of maintenance capex – 30 basis points – is forecast
for the full year (FY19). If half of this level of maintenance capex had been incurred in H1 2019, this
would have resulted in AFFO earnings per share reducing by 0.32 cps to 3.79 cps.

Q2 Dividend
The PFI Board has today resolved to pay a second quarter interim cash dividend of 1.8000 cents per
share. The dividend will have imputation credits of 0.6163 cents per share attached and a supplementary
dividend of 0.2796 cents per share will be paid to non-resident shareholders. The record date for the
dividend is 26 August 2019 and the payment date is 4 September 2019. The dividend reinvestment
scheme will not operate for this dividend.

The second quarter dividend will take cash dividends for the first six months of 2019 to 3.60 cents per
share, in line with the prior period, resulting in an FFO dividend pay-out ratio of 85% (H1 2018: 85%)
and an AFFO dividend pay-out ratio of 93% (H1 2018: 107%, refer Appendix 3).

Guidance
In February 2019, the Company guided to a cash dividend of 7.60 cents per share for the 2019 financial
year, with full year cash dividends expected to approximate 80% to 90% of FFO earnings and 95% to
100% of AFFO earnings, in line with the Company’s dividend policy.

PFI Chief Finance and Operating Officer, Craig Peirce, notes: “The first half of 2019 has delivered strong
leasing outcomes and the current low interest rate environment is translating into reduced interest costs.
--------

3
Weighted average cost of debt comprises float interest rates, hedging, margins and all borrowings related fees.
4
H1 2018 excludes the impact of the June 2017 internalisation.

NZX and media
announcement
—
19 August | 2019


Page 3

Given these conditions, we are guiding to the mid-point of our dividend policy ranges, with FFO earnings
of around 8.95 cents per share and AFFO earnings of around 7.80 cents per share. We note that there
is potential for AFFO earnings per share to exceed this guidance if our current expectations for
maintenance capex of 30 basis points is not incurred.”

Please refer to Appendix 4 for more detail on this guidance.

Net tangible assets (NTA)
PFI’s NTA per share increased by 5.4 cents per share or 3.0% from 177.7 cents per share as at the end
of 2018 to 183.1 cents per share as at the end of the interim period.

The change in NTA per share was driven by the increase in the fair value of investment properties
(described below, +4.7 cents per share), retained earnings (+0.4 cents per share) and the decrease in
the net fair value liability for derivative financial instruments (+0.3 cents per share).

Capital management
There were no changes to PFI’s bank facilities during the first half of 2019: the facilities total $275 million,
and are due to expire in May 2020 ($50 million), May 2021 ($187.5 million) and May 2022 ($37.5 million).

When combined with the Company’s November 2024 ($100 million) and October 2025 ($100 million)
bonds, at 30 June 2019, the weighted average term to expiry of PFI’s bank facilities and bonds stands
at 3.5 years.

The Company is well placed to continue to take advantage of the current low interest rate environment:
based on current hedging and debt levels, an average of approximately 55% of PFI’s debt will be hedged
at an average rate of approximately 3.83% for H2 2019, with the remainder on historically low float
interest rates.

The Company ended the interim period with gearing
5
of 31.1%, well within the self-imposed gearing limit
of 40% and bank covenants of 50%. The interest cover ratio
6
of 3.9 times was also well within bank
covenants of 2.0 times.

Craig Peirce, notes: “This low level of gearing provides us with the capacity to deliver on our recycling
strategy, in particular, it gives us the ability to secure industrial property opportunities before divesting
PFI’s non-industrial properties.”

Portfolio performance
Portfolio snapshot as at 30 June 2019 31 December 2018 30 June 2018
Book value $1,368.3m $1,322.0m $1,239.5m
Number of properties 94 94 93
Number of tenants 147 148 146
Contract rent $83.1m $82.0m $80.0m
Occupancy 99.7% 99.3% 98.1%
Weighted avg. lease term 5.71 years 5.39 years 5.39 years
Auckland property 83.8% 83.1% 82.6%
Industrial property 87.4% 87.3% 86.6%

--------

5
That is, total borrowings as a percentage of the most recent independent valuation of the property portfolio.
6
That is, the ratio of interest expense and bank fees to operating earnings excluding interest expense and bank fees.

NZX and media
announcement
—
19 August | 2019


Page 4

Full valuations of 13 properties were completed during the interim period, resulting in a total uplift of
$23.4 million or 8.8%. The total uplift includes:

▪ $25.0 million or 11.3% of uplift on 10 properties with leasing transactions;
▪ $0.7 million or 4% of uplift on 51-61 Spartan Road, Takanini, purchased in March 2019;
▪ $1.8 million or 17% of write down on 314 Neilson Street, Penrose, due to a fire in April 2019; and
▪ $0.5 million or 2.6% of write down on 6 Donnor Place, Mount Wellington, where refurbishment has
started following tenant expiry.

As a result of portfolio and valuation activity, PFI’s passing yield firmed from 6.21% to 6.09%.

An independent desktop review of the remainder of the portfolio confirmed that there has not been a
material change in value at the end of the interim period, and the entire portfolio will next be revalued by
at the end of the year. Market evidence – and CBRE estimates
7
of prime and secondary Auckland
industrial yields of 5.17% and 6.08% – indicate that further increases in value can be expected at the
end of the year if market conditions remain unchanged.

Over 72,000 square metres, representing more than 11% of PFI’s existing portfolio by rent, was leased
during the interim period to 14 new and existing tenants for an average increase in term of 6.8 years.
Lease renewals accounted for more than 90% of the contract rent secured, with 11 PFI tenants retained
for an average increase in term of 7.0 years. Across these leasing transactions, low levels of incentives
and capital expenditure were required to attract and retain tenants, with average leasing costs of less
than half a month per year of term.

Included in these totals is a renewal of engineers Jacobs’ tenancy at PFI’s Auckland city-fringe Carlaw
Park office and mixed-use property. Just 564 square metres of space remains vacant at this property,
where the Department of Internal Affairs and NZ Behavioural Health – part of the Acurity Health Group
– are currently completing their fit-out for their six-year and 10-year leases.

Rent reviews were completed on 56 leases during the interim period, resulting in an average annual
uplift of 3.3% on $23.4 million of contract rent. Nine market rent reviews on $4.6 million of contract rent
delivered an annualised increase of 3.3% over an average review period of 3.7 years, and these reviews
were settled at an average of approximately 4.8% above December 2018 market rental assessments.
An independent market rental assessment of the entire portfolio was not completed at the end of the
interim period, but PFI estimates that the Company’s Auckland industrial portfolio is around 5% under-
rented, on a portfolio basis.

At the end of the interim period, the Company’s portfolio was 99.7% occupied and just 2.8% of contract
rent is due to expire in the second half of 2019 (a total of 3.1%, H2 2018: 3.9%). When combined with
rent reviews, more than 40% of PFI’s portfolio is subject to some form of lease event during the second
half of 2019.

In their June 2019 Auckland Market Outlook, CBRE predict industrial rental growth over the next five
years to average 3.0% per annum for Prime properties and 4.1% per annum for Secondary properties.
PFI will continue to access this projected market rental growth as approximately 12% of the Company’s
H2 2019’s lease events
8
are market related.

Market update
In the July ANZ Business Outlook Survey, headline business confidence fell six points during the month,
with a net 44% of respondents reporting that they expect general business conditions to deteriorate in
--------

7
CBRE “Hot Off The Press Update”, July 2019.
8
Being ~5% of total contract rent.

NZX and media
announcement
—
19 August | 2019


Page 5

the year ahead. Employment intentions also fell during the month from zero to a net 6% of firms
expecting to cut jobs.

Amidst ongoing trade tensions between major economies, rising protectionism and slumping exports, a
growing number of central banks have taken action to shore up cooling economies, all this against a
background of inflation that remains subdued across the OECD.

Interest rates in the main industrialised economies have fallen sharply, and local markets continue to
reflect the likelihood of further easing by the RBNZ.

In their June 2019 Auckland Market Outlook, CBRE note that: “Investment markets will continue to
benefit from the renewed monetary stimulus being implemented by Reserve Banks around the world
suppressing both short and long term interest rates.”

As regards to rents, CBRE noted that for prime industrial property: “Given the active development
market, low vacancy and ever increasing construction costs, we continue to expect new industrial
warehouse rental benchmarks to be achieved in a number of the more active suburbs...”

For secondary industrial property, they note that: “... low vacancy and ongoing demand from more cost
sensitive occupiers support Secondary grade rental growth going forward...”

These factors combine to result in CBRE predicting that secondary industrial will continue as the market
with the best return outlook. Their forecast of annual returns over the next five years totals 11.2% per
annum (December 2018: 11.0%), comprising an income return of 6.0% (December 2018: 6.3%) and
capital growth of 5.2% (December 2018: 4.8%).

Prime industrial once again ranks second in their forecasts, with annual returns over the next five years
expected to total 8.9% per annum (December 2018: 8.7%), comprising an income return of 5.1%
(December 2018: 5.3%) and capital growth of 3.8% (December 2018: 3.4%).

2019 priorities
Simon Woodhams notes: “As we reach the halfway point of 2019, we are pleased to report good
progress on our priorities for the year, which included starting to replace PFI’s non-industrial properties
with quality industrial properties in sought-after areas.”

“Since the beginning of the year, $51.4 million has been committed to two prime Auckland industrial
opportunities. 12-year leases have been secured at both sites, and the return to PFI is estimated to be
around 5.35%.”

Simon Woodhams continues: “Following the settlement of the sale of 50 Parkside Road in Wellington in
January of this year, we are pleased to report that we are also underway with divesting PFI’s non-
industrial properties.”

Following the completion of a number of asset management initiatives, the Company’s mixed-use
property at 229 Dairy Flat Highway in Albany is now being marketed for sale by Colliers International
under a deadline private treaty closing at Tuesday, 27 August 2019.

Value-add strategies within the existing portfolio also form an important part of the Company’s 2019
priorities.

Kiwi Steel’s 2,500 square metre warehouse on surplus land at 212 Cavendish Drive, Manukau, achieved
practical completion early May, and since the beginning of the year the Company has committed to four
more new projects with a total value of $8.3 million. Combined, these four projects are expected to

NZX and media
announcement
—
19 August | 2019


Page 6

deliver a return on incremental cost of 6.3%. A further $10.8 million of projects are in advanced stages
of planning and negotiation.

Closing
Simon Woodhams concludes: “With an excellent portfolio, a strong balance sheet, and a favourable
outlook for industrial property, we enter the second half of 2019 well positioned to deliver on our Purpose:
creating strong, stable income for investors and generating prosperity for New Zealand.”























ENDS

ABOUT PFI & CONTACT

PFI is an NZX listed property vehicle specialising in industrial property. PFI’s nationwide portfolio of 94 properties is leased to
147 tenants.

For further information please contact:

SIMON WOODHAMS CRAIG PEIRCE
Chief Executive Officer Chief Finance and Operating Officer
--- ---
Phone: +64 9 303 9652 Phone: +64 9 303 9651
Email: woodhams@pfi.co.nz Email: peirce@pfi.co.nz
---
Property for Industry Limited
Shed 24, Prince’s Wharf, 147 Quay Street, Auckland 1010
PO Box 1147, Shortland Street, Auckland 1140
---
www.propertyforindustry.co.nz

Attachments
NZX Form – Results Announcement
NZX Form – Distribution Notice
Interim Results Presentation
Interim Financial Statements

NZX and media
announcement
—
19 August | 2019


Page 7

Appendices
Appendix 1 – FFO and AFFO Calculations

Funds / Adjusted Funds From Operations For the six
months ended
For the six
months ended
(unaudited, $000, unless noted) 30 June 2019 30 June 2018
Profit and total comprehensive income after income
tax attributable to the shareholders of the Company
46,398 29,570
Adjusted for:
Fair value gain on investment properties (23,449) (7,948)
Loss / (gain) on disposal of investment properties 57 (53)
Fair value (gain) / loss on derivative financial instruments (1,297) (647)
Amortisation of tenant incentives 1,297 1,141
Straight lining of fixed rental increases (717) (524)
Deferred taxation 127 2,691
Adjustment to current taxation for the deductibility of the termination
of the management agreement
- (1,994)
Funds From Operations (FFO) 22,416 22,236
FFO per share (cents) 4.49 4.46
Maintenance capex (374) (3,501)
Incentives and leasing fees given for the period (1,556) (1,188)
Other - (5)
Adjusted Funds From Operations (AFFO) 20,486 17,542
AFFO per share (cents) 4.11 3.52

Appendix 2 – FFO and AFFO Compared to H1 2018 and H2 2018

FFO (CPS) Change AFFO (CPS) Change
H1 2018 4.46 +0.03 CPS or
+0.7%
3.52 +0.59 CPS or
+16.8%
H1 2019 4.49 4.11

FFO (CPS) Change AFFO (CPS) Change
H2 2018 4.38 +0.11 CPS of
+2.5%
3.97 +0.14 CPS or
+3.5%
H1 2019 4.49 4.11

Appendix 3 – FFO and AFFO Dividend Pay-out Ratios

Full year dividends per share
(cents, 2019 = guidance, 2018 = actuals)
7.60 7.55
Pro-rata share of full year dividends per share
(cents, 2019 = 50% of guidance, 2018 = 50% of actuals)
3.80 3.78
FFO dividend pay-out ratio (%) 85% 85%
AFFO dividend pay-out ratio (%) 93% 107%

NZX and media
announcement
—
19 August | 2019


Page 8

Appendix 4 –
The table below illustrates the level of FFO and AFFO earnings based on the mid-point of the guidance
range:

CPS FFO @ 85% AFFO @ 97.5%
Policy: 80 – 90% Policy: 95 – 100%
Guidance ~8.95 ~7.80
Actual H1 2019 4.49 4.11
Implied H2 2019 4.46 3.69
Normalise maintenance capex - +0.32
Normalised H2 2019 4.46 4.01

---

Results announcement
(for Equity Security issuer/Equity and Debt Security
issuer)
Updated as at 8 May 2019



Results for announcement to the market
Name of issuer Property for Industry Limited (PFI)
Reporting Period 6 months to 30 June 2019
Previous Reporting Period 6 months to 30 June 2018
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$72,385 +36%
Total Revenue $72,385 +36%
Net profit/(loss) from
continuing operations
$46,398 +57%
Total net profit/(loss) $46,398 +57%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.01800000
Imputed amount per Quoted
Equity Security
$0.00616300
Record Date 26 August 2019
Dividend Payment Date 4 September 2019
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.831 $1.652
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
This dividend is fully credited with imputation credits to the
extent permitted by the imputation credit rules and to the extent
that the directors of PFI determine were available.
This announcement is extracted from PFI’s unaudited interim
financial statements as at and for the six months ended 30 June
2019. A copy of these unaudited interim financial statements are
attached to this announcement.
Authority for this announcement
Name of person

authorised
to make this announcement
Craig Peirce
Contact person for this
announcement
Craig Peirce
Contact phone number +64 9 303 9651
Contact email address peirce@pfi.co.nz
Date of release through MAP

19/08/2019

Unaudited financial statements accompany this announcement.

---

Template
Distribution Notice

Updated as at 8 May 2019



Section 1: Issuer information
Name of issuer Property for Industry Limited
Financial product name/description Property for Industry Limited Shares
NZX ticker code PFI
ISIN (If unknown, check on NZX
website)
NZPFIE0001S5
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year Quarterly
Half Year X Special
DRP applies
Record date 26/08/2019
Ex-Date (one business day before the
Record Date)
23/08/2019
Payment date (and allotment date for
DRP)
04/09/2019
Total monies associated with the
distribution
NZD$8,977,020
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution $0.02416300
Total cash distribution $0.01800000
Excluded amount (applicable to listed
PIEs)
$0.00215300
Supplementary distribution amount $0.00279600
Section 3: Imputation credits and Resident Withholding Tax
Is the distribution imputed Partial imputation
If fully or partially imputed, please
state imputation rate as % applied
26% (being imputation tax credits per financial product
divided by total amount)
Imputation tax credits per financial
product
$0.00616300
Resident Withholding Tax per
financial product
N/A
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP

Date strike price to be announced (if
not available at this time)

Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)

DRP strike price per financial product

Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms

Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Craig Peirce
Contact person for this
announcement
Craig Peirce
Contact phone number +64 21 248 6301
Contact email address peirce@pfi.co.nz
Date of release through MAP

19/08/2019

---

Highlights
Interim
Results
Briefing
2019
2019 PRIORITIES ADVANCED:
EARNINGS GROWTH:
POSITIVE PORTFOLIO ACTIVITY:
VALUATION GAINS:
interim profit after tax up $16.8 million, Funds From
Operations (FFO)
1
earnings per share in line with
the prior interim period, Adjusted Funds From
Operations (AFFO) earnings per share up 16.8% to
4.11 cents per share
over 72,000 square metres or 11% of the portfolio
leased during the interim period to 14 tenants for an
average increase in term of 6.8 years, market rent
reviews settled at an average of ~4.8% above
December 2018 market rental assessments
$23.4 million or 8.8% increase in the value of 13
properties from independent valuations, net tangible
assets per share up 5.4 cents or 3.0% to 183.1
cents per share
two Auckland industrial opportunities secured totalling $51.4 million,
229 Dairy Flat Highway in Albany now being marketed for sale, $19.1
million of value-add strategies committed to or in advanced stages of
planning
1
Funds From Operations and Adjusted Funds From Operations are non-GAAP financial information and are
common investor metrics, which have been calculated in accordance with the guidelines issued by the
Property Council of Australia. Please refer to slide 31 for further details.
4

Portfolio
Snapshot
Interim
Results
Briefing
2019
▪PFI’s portfolio is diversified across 94
properties and 147 tenants, with 99.7%
occupancy and a weighted average lease
term of 5.71 years, weighted towards
Auckland industrial property
JUNE 2019DECEMBER 2018JUNE 2018
BOOK VALUE$1,368.3m$1,322.0m$1,239.5m
NUMBER OF PROPERTIES949493
NUMBER OF TENANTS147148146
CONTRACT RENT$83.1m$82.0m$80.0m
OCCUPANCY99.7%99.3%98.1%
WEIGHTED AVERAGE LEASE TERM5.71 years5.39 years5.39 years
AUCKLAND PROPERTY83.8%83.1%82.6%
INDUSTRIAL PROPERTY87.4%87.3%86.6%
6

Valuations
Interim
Results
Briefing
2019
▪Full valuations for 13 properties, $23.4 million or 8.8% uplift:
−$25.0 million or 11.3% uplift on 10 properties with leasing
transactions (refer next slide for more detail)
−$0.7 million or 4% uplift on 51-61 Spartan Road,
Takanini, purchased in March 2019 (refer slide 26 for
more detail)
−$1.8 million or 17% write down on 314 Neilson Street,
Penrose, due to a fire in April 2019
1
−$0.5 million or 2.6% write down on 6 DonnorPlace,
Mount Wellington, where refurbishment has started
following tenant expiry (refer slide 27 for more detail)
▪Independent desktop review of remainder of portfolio
▪Passing yield firmed from 6.21% to 6.09%
▪CBRE estimate
2
Auckland prime industrial yields are 5.17%
and secondary industrial yields are 6.08%
One of the key components
to being a landlord is listening to and
understanding your tenants and
working with them in order that they
can get on and do what they do best.
JODIE WARMAN,
PFI Property Manager
1
PFI has material damage insurance up to a value of $9.65 million and 24 months of business
interruption insurance in place for this property. The final amounts to be received under these
insurances are yet to be determined and received.
2
CBRE “Hot Off The Press Update”, July 2019.
7

Leasing
Interim
Results
Briefing
2019
▪14 leases agreed over ~72,000 sqm of
space for an average term of 6.8 years
▪Lease renewals accounted for more than
90% of the contract rent secured
▪Average leasing costs (incentives, capital
expenditure) less than half a month per
year of term
▪$25.0 million or 11.3% uplift on 10
properties with significant leasing
transactions
ADDRESSTENANTTERMAREA% RENT ROLL
7-9 NIALL BURGESS RDDHL7.0 years23,525 sqm2.9%
CARLAW PARKJacobs5.4 years4,334 sqm2.1%
320 ROSEBANK RDDoyle Sails12.0 years6,625 sqm1.0%
9 NESDALE AVEBrambles5.0 years14,163 sqm0.9%
CARLAW PARKQuest10.0 years1,737 sqm0.9%
6-8 GREENMOUNT DRBridon12.0 years6,590 sqm0.8%
686 ROSEBANK RDBUNZL3.0 years3,858 sqm0.6%
VARIOUS7 Other Transactions4.0 years11,651 sqm2.0%
14 LEASING TRANSACTIONS6.8 years72,483 sqm11.2%
8

Rent
Reviews
Interim
Results
Briefing
2019
▪56 rent reviews delivered an average annual uplift of ~3.3%
on ~$23.4 million of contract rent
▪Nine market rent reviews delivered an annualised increase of
3.3% over an average review period of 3.7 years on $4.6
million of contract rent, reviews settled at average of ~4.8%
above December 2018 market rental assessment
▪CBRE predict
1
industrial rental growth over the next five years
to average 3.0% per annum for prime properties and 4.1%
per annum for secondary properties
▪PFI will continue to access projected market rental growth as
~5% of the Company’s H2 2019’s lease events are market
related
▪Independent market rental assessment not completed at the
end of the interim period, PFI estimates that the Company’s
Auckland industrial portfolio is ~5% under-rented, on a
portfolio basis
No Event58.2%
Fixed25.5%
CPI11.4%
Expiry2.8%
Market1.8%
Vacant0.3%
1
CBRE “Auckland Market Outlook”, June 2019.
9

H2 2019
Lease
Expiries
Interim
Results
Briefing
2019
▪Portfolio is 99.7% occupied (0.3% vacancy) and 2.8% of
contract rent is due to expire in the second half of 2019, a
total of 3.1% (H2 2018: 3.9%)
▪Short term renewal at 2 Pacific Rise secured post balance
date
▪CBRE estimate Auckland industrial vacancy of ~1.4%
1
and
forecast vacancy to remain at an average of ~1.3%
2
over the
next five years
H2 2019 EXPIRIESTENANT% RENT ROLL
2 PACIFIC RISEHewlett-Packard1.2%
CARLAW PARK GATEWAYJacobs (car-parks)0.7%
511 MT WELLINGTON HIGHWAYBremca0.4%
44 MANDEVILLE STREETViridian Glass0.3%
OTHERVarious0.2%
TOTAL2.8%
0.3%
2.8%
9.2%
6.5%
9.6%
11.5%
22.1%
7.5%
4.8%
5.8%
19.9%
0%
5%
10%
15%
20%
25%
Vacant201920202021202220232024202520262027Onwards
1
CBRE “Hot Off The Press Update”, August 2019.
2
CBRE “Auckland Market Outlook”, June 2019.
10

Net Rental
Income
Interim
Results
Briefing
2019
▪Net rental income of $41.0
million up $1.7 million or 4.3%
▪Increases due to positive
leasing activity totalling $1.1
million and acquisitions ($1.0
million)
▪Increases partially offset by
lost rental income from
properties now under re-
development ($0.3 million),
disposals ($0.1 million) and
lost rental income from the fire
at 314 Neilson Street, Penrose
in April 2019 ($0.1 million)
+1.1
+1.0
+0.3
-0.3
-0.2
-0.1
-0.1
-0.1
39.3
41.0
$37m
$38m
$38m
$39m
$39m
$40m
$40m
$41m
$41m
$42m
$42m
H1 2018 net
rental income
Rent reviews
& adjustments
AcquisitionsNew leases
& lease
renewals
DevelopmentsVacancyDisposalsOtherFireH1 2019 net
rental income
12

Adjusted
Funds From
Operations
(cents per share)
Interim
Results
Briefing
2019
▪Profit after tax up $16.8 million
to $46.4 million
▪FFO earnings per share in line
with the prior interim period
and slightly ahead of H2 2018
▪AFFO earnings per share 0.59
cents per share or 16.8%
ahead of the prior interim
period and 0.14 cents per
share of 3.5% ahead of H2
2018
▪Maintenance capex was key
driver of the increase: just
$0.4 million or 6 basis points
in H1 2019
+0.63
+0.26
+0.02
-0.22
-0.09
-0.01
3.52
4.11
3.0
3.2
3.4
3.6
3.8
4.0
4.2
4.4
4.6
H1 2018 AFFOMaintenance
capex
Net rental incomeAdministrative
expenses / Other
Current taxationInterest expense
and bank fees
Non-recoverable
property costs
H1 2019 AFFO
13

Earnings,
Dividends,
Guidance
Interim
Results
Briefing
2019
▪H1 2019 cash dividends total 3.60 cps, in
line with H1 2018
▪2019 dividend guidance unchanged: 7.60
cps, up 0.05 cps or 0.7% from 2018
▪2019 earnings guidance:
−2019 dividend of 7.60 cps forecast to
equate to 80%-90% of FFO, 95%-
100% of AFFO
−Guiding to the mid-point of dividend
policy ranges: FFO earnings of
around 8.95 cps and AFFO earnings
of around 7.80 cps
−Potential for AFFO earnings per
share to exceed this guidance if
current expectations for maintenance
capex of 30 basis points is not
incurred
EARNINGSH1 2019 CPSH1 2018 CPSCHANGE
FUNDS FROM OPERATIONS
4.494.46+0.03 CPS or +0.7%
ADJUSTED FUNDS FROM OPERATIONS
4.113.52+0.59 CPS or +16.8%
DIVIDEND PAY-OUTPOLICY
H1 2019 PAY-OUT
RATIO
H1 2018 PAY-OUT
RATIO
FUNDS FROM OPERATIONS
80 –90%85%85%
ADJUSTED FUNDS FROM OPERATIONS
95 –100%93%
107%
14

Investment
Properties
Interim
Results
Briefing
2019
▪Portfolio value of ~$1.37
billion
▪Full valuations of 13 properties
resulted in uplift of $23.4
million or 8.8%
▪51-61 Spartan Road, Takanini,
purchased in March 2019 for
$17.2 million
▪Significant capex at 6 Donnor
Place (refurbishment) and 212
Cavendish Drive
(development)
1,368.3
+23.4
+17.2
+7.6
+1.5
-0.2
1,318.7
$1,240m
$1,260m
$1,280m
$1,300m
$1,320m
$1,340m
$1,360m
$1,380m
December 2018
investment
properties
Fair value gainAdditionsCapitalised
expenditure &
interest
Movement in lease
incentives, fees and
fixed rental income
DisposalsJune 2019
investment
properties
1
Investment properties as at 31 December 2018
exclude 50 Parkside Road, Wellington, as this
property had been moved to “non-current assets
classified as held for sale”.
15

Net Tangible
Assets
(cents per share)
Interim
Results
Briefing
2019
▪Net tangible assets (NTA) per
share increased by 5.4 cents
per share or 3.0%
▪Change in NTA per share
driven by the increase in the
fair value of investment
properties (+4.7 cps), retained
earnings (+0.4 cps) and the
decrease in the net fair value
liability for derivative financial
instruments (+0.3 cps)
-0.0
183.1
+4.7
+0.4
+0.3
177.7
160
164
168
172
176
180
184
188
December 2018 NTAFair value gain on
investment properties
Retained earningsFair value gain on
derivative financial
instruments
Loss on disposal of
investment properties
June 2019 NTA
16

Funding,
Covenants,
Interest
Rates
Interim
Results
Briefing
2019
▪No changes to PFI’s bank facilities during
the first half of 2019
▪Gearing of 31.1% well within the self-
imposed gearing limit of 40% and bank
covenants of 50%, provides capacity to
deliver on recycling strategy
JUNE 2019 DECEMBER 2018
FUNDING
SYNDICATED BANK FACILITY DRAWN
$224.8m$201.1m
SYNDICATED BANK FACILITY LIMIT
$275.0m$275.0m
SYNDICATED BANK FACILITIES HEADROOM
$50.2m$74.0m
FIXED RATE BONDS
$200.0m$200.0m
FUNDING TERM (AVERAGE)
3.5 years4.0 years
SYNDICATED BANK FACILITYBANKS
ANZ, BNZ, CBA, WestpacANZ, BNZ, CBA, Westpac
COVENANTS
LOAN-TO-VALUE RATIO (COVENANT: <50%)
31.1%30.3%
INTEREST COVER RATIO (COVENANT: >2.0X)
3.9 times3.9 times
INTEREST RATES
WEIGHTEDAVERAGE COST OF DEBT
4.56%4.86%
INTERESTRATE HEDGING (EXCL. FORWARD STARTING)
$235m/ 3.83% / 2.7 years$220m/ 4.16% / 2.1 years
FORWARD STARTING INTEREST RATE
$190m / 3.32% / 3.5 years$210m / 3.43% / 3.5 years
18

Debt Facility
Maturity
Profile,
Hedging
Interim
Results
Briefing
2019
▪Debt facility maturity profile:
average term to expiry of 3.5
years, $50.2 million of
unutilised bank facility
capacity
▪Fixed rate payer hedging
profile: swap cover profile
provides for an average of
~55% of debt to be hedged
at an average fixed rate of
~3.83% for the remainder of
FY19, remainder (~45%) on
historically low float interest
rates
50.0
187.5
37.5
100.0100.0
0.0
50.0
100.0
150.0
200.0
FY19FY20FY21FY22FY23FY24FY25
Bank facilitiesBonds
2.8%
3.2%
3.6%
4.0%
$0m
$50m
$100m
$150m
$200m
$250m
Jun-19Dec-19Jun-20Dec-20Jun-21Dec-21Jun-22Dec-22Jun-23Dec-23Jun-24Dec-24Jun-25Dec-25
CoverInterest Rate
19

Market
Update:
Economy
Interim
Results
Briefing
2019
21
21

Market
Update:
Property
Interim
Results
Briefing
2019
22
22

2019
Priorities
Interim
Results
Briefing
2019
ASSET MANAGEMENT:
DISPOSALS:
VALUE-ADD STRATEGIES:
ACQUISITIONS:
begin disposing PFI’s non-industrial assets
recycle capital from disposals into value-add
strategies within the existing portfolio
recycle capital from disposals into quality
industrial properties in sought-after areas
Carlaw Park a key priority, as is leasing of vacant and expiring
industrial spaces (refer “Section 2: Portfolio” for progress)
24

Disposals
Interim
Results
Briefing
2019
▪2019 priority: begin disposing PFI’s non-
industrial assets
▪Progress: Following completion of asset
management initiatives, mixed-use
property at 229 Dairy Flat Highway, Albany
now being marketed for sale by Colliers
International under deadline private treaty
closing Tuesday, 27 August 2019
25

Acquisitions
Interim
Results
Briefing
2019
▪2019 priority: replace PFI’s non-industrial
properties with quality industrial properties
in sought-after areas
▪Progress: $51.4 million committed to two
prime Auckland industrial opportunities
51-61 SPARTAN ROAD,
TAKANINI
DEVELOPMENT AT TIDAL ROAD,
MANGERE
PURCHASE PRICE$17.2m$34.2m
TENANTMaxiTRANSSupply Chain Solutions
PROPERTY DESCRIPTIONGeneric industrial, development potentialGeneric industrial development
PURCHASE YIELD5.35%5.35%
LEASE TERM12 years12 years
RENT REVIEWSFixed rent reviews, 2.75% annuallyFixed rent reviews, 2.50% annually
26

Value-add
Strategies
Interim
Results
Briefing
2019
27
27

Review &
Questions
Interim
Results
Briefing
2019
29
29

Appendix 1:
FFO and
AFFO
Interim
Results
Briefing
2019
(Unaudited, $000, unless noted)6ME June 20196ME June 2018
Profit and total comprehensive income after income tax attributable to the shareholders of the Company
46,39829,570
Adjusted for:
Fair value gain on investment properties
(23,449)(7,948)
Loss / (gain) on disposal of investment properties
57(53)
Fair value (gain) / losson derivative financial instruments
(1,297)(647)
Amortisation of tenant incentives
1,2971,141
Straight lining of fixed rental increases
(717)(524)
Deferred taxation
1272,691
Adjustment to current taxation for the deductibility of the termination of the management agreement
-(1,994)
Funds From Operations (FFO)
22,41622,236
FFO per share (cents)
4.494.46
FFO dividend pay-out ratio (%)
85%85%
Maintenance capex
(374)(3,501)
Incentives and leasing fees given for the period
(1,556)(1,188)
Other
-(6)
Adjusted Funds From Operations (AFFO)
20,48617,541
AFFO per share (cents)
4.113.52
AFFO dividend pay-out ratio (%)
93%107%
31

Disclaimer
Interim
Results
Briefing
2019
The information included in this presentation is provided as at 19 August 2019 and should be read in conjunction with the NZXresults
announcement, NZX Form –Results Announcement, NZX Form –Distribution Notice, and interim financial statements issued on that
same day.
Property for Industry Limited (PFI) does not guarantee the repayment of capital or the performance referred to in this presentation.
Past performance is not a reliable indicator of future performance.
The presentation includes a number of forward looking statements. Forward looking statements, by their nature, involve inherent risks
and uncertainties. Many of those risks and uncertainties are matters which are beyond PFI’s control and could cause actual results to
differ from those predicted. Variations could either be materially positive or materially negative.
While every care has been taken in the preparation of this presentation, PFI makes no representation or warranty as to the accuracy or
completeness of any statement in it including, without limitation, any forecasts.
This presentation has been prepared for the purpose of providing general information, without taking account of any particular
investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the
appropriateness of the information in this presentation, and seek professional advice, having regard to the investor’s objectives,
financial situation and needs.
This presentation is solely for the use of the party to whom it is provided.
32

---

Property
for
Industry
Limited
Group
Interim
Financial
Statements
30 June
2019
FINANCIAL
STATEMENTS.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2019
The accompanying notes form part of these financial statements.
UNAUDITEDUNAUDITED
ALL VALUES IN $000SNOTE
6 months ended
30 June 2019
6 months ended
30 June 2018
INCOME
Rental and management fee income2.2 47,545 44,686
Licence income 50 50
Interest income 2 2
Fair value gain on investment properties2.1 23,449 7,948
Gain on disposal of investment properties – 53
Fair value gain on derivative financial instruments 1,297 647
Business interruption insurance income2.5 42 –
Total income 72,385 53,386
EXPENSES
Property costs2.3 (7,465) (6,341)
Interest expense and bank fees (9,584) (9,159)
Administrative expenses5.1 (2,432) (2,378)
Loss on disposal of investment properties (57) –
Total expenses (19,538) (17,878)
Profit before taxation 52,847 35,508
Income tax expense5.2 (6,449) (5,938)
Profit and total comprehensive income after income tax attributable to the shareholders
of the Company 46,398 29,570
Basic and diluted earnings per share (cents)4.1 9.30 5.93
2
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2019

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2019
The accompanying notes form part of these financial statements.
Cents
per share
(cents)
No. of
shares
(#)
Ordinary
shares
($000s)
Retained
earnings
($000s)
Total
equity
($000s)
Balance as at 1 January 2018 (audited) – 498,723,330 562,429 280,514 842,943
Total comprehensive income – – – 29,570 29,570
Dividends
Q4 2017 final dividend - 7/3/2018 2.15 – – (10,723) (10,723)
Q1 2018 interim dividend - 31/5/2018 1.80 – – (8,976) (8,976)
Balance as at 30 June 2018 (unaudited) – 498,723,330 562,429 290,385 852,814
Balance as at 1 January 2019 (audited) – 498,723,330 562,429 352,706 915,135
Total comprehensive income – – – 46,398 46,398
Dividends
Q4 2018 final dividend - 13/3/2019 2.10 – – (10,474) (10,474)
Q1 2019 interim dividend - 24/5/2019 1.80 – – (8,977) (8,977)
Balance as at 30 June 2019 (unaudited) – 498,723,330 562,429 379,653 942,082
3

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
The accompanying notes form part of these financial statements.
UNAUDITEDAUDITED
ALL VALUES IN $000SNOTE30 June 201931 December 2018
CURRENT ASSETS
Cash at bank 964 1,652
Accounts receivable, prepayments and other assets 4,463 1,239
Total current assets 5,427 2,891
NON-CURRENT ASSETS
Investment properties2.1 1,368,253 1,318,655
Property, plant and equipment5.4 446 62
Derivative financial instruments3.2 14,003 4,891
Goodwill 29,086 29,086
Total non-current assets 1,411,788 1,352,694
Non-current assets classified as held for sale – 3,313
Total assets 1,417,215 1,358,898
CURRENT LIABILITIES
Derivative financial instruments3.2 431 94
Accounts payable, accruals and other liabilities 12,252 10,460
Taxation payable 6,179 8,805
Total current liabilities18,862 19,359
NON-CURRENT LIABILITIES
Borrowings3.1 422,199 398,222
Derivative financial instruments3.2 21,462 13,982
Deferred tax liabilities5.2 12,327 12,200
Other Liabilities 283 –
Total non-current liabilities 456,271 424,404
Total liabilities 475,133 443,763
Net assets4.2 942,082 915,135
EQUITY
Share capital 562,429 562,429
Retained earnings 379,653 352,706
Total equity 942,082 915,135
These Group interim financial statements are signed on behalf of Property for Industry Limited and were authorised for issue on 19 August 2019.
Anthony Beverley Susan Peterson
Chairman Chair, Audit and Risk Committee
4
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2019

The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2019
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2019
6 months ended
30 June 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Property and management fee income received 45,834 44,654
Licence income 50 50
Net GST paid (996) (500)
Interest received 2 2
Interest and other finance costs paid (9,453) (8,983)
Payments to suppliers and employees (10,836) (10,736)
Income tax paid (8,948) (28)
Net cash flows from operating activities 15,653 24,459
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment properties 3,408 85
Acquisition of investment properties (17,235) (16,030)
Acquisition of property, plant and equipment (26) 13
Expenditure on investment properties (6,633) (5,012)
Capitalisation of interest on development properties (59) (7)
Net cash flows from investing activities (20,545) (20,951)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (repayment of) / proceeds from syndicated bank facility 23,710 16,274
Principal elements of finance lease payments (55) –
Dividends paid to shareholders (19,451) (19,699)
Net cash flows from financing activities 4,204 (3,425)
Net increase / (decrease) in cash and cash equivalents (688) 83
Cash and cash equivalents at beginning of period 1,652 605
Cash and cash equivalents at end of period 964 688
5

1. GENERAL INFORMATION7
1.1. Reporting entity7
1.2. Basis of preparation7
1.3. Critical judgements, estimates and assumptions7
1.4. Accounting policies7
1.5. Adoption of new standards7
1.6. Significant events and transactions7
2. PROPERTY8
2.1. Investment properties8
2.2. Rental and management fee income9
2.3. Property costs9
2.4. Net rental income9
2.5. Insurance income9
3. FUNDING10
3.1. Borrowings10
3.2. Derivative financial instruments11
4. INVESTOR RETURNS AND INVESTMENT METRICS12
4.1. Earnings per share12
4.2. Net tangible assets per share12
5. OTHER12
5.1. Administrative expenses12
5.2. Taxation13
5.3. Related party transactions14
5.4. Leases15
5.5. Operating segments16
5.6. Capital commitments16
5.7. Subsequent events16
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2019
6
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2019

NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2019
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 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 2018 which may be
downloaded from the Company’s website (www.propertyforindustry.co.nz/investor-centre/reports-and-presentations).
1.3. 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 2018.
1.4. 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 2018, other than following the adoption of new standards outlined in section 1.5 below.
1.5. Adoption of new standards
The Group has adopted NZ IFRS 16 ‘Leases’ on its effective date of 1 January 2019, as required, which has replaced the previous 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.
The Group has identified the lease of its head office as the only lease recognised due to NZ IFRS 16, and the impact of adopting the standard is not
material to the Group. The simplified retrospective transition method allows the Group to calculate the lease liability and the right-of-use asset based on
the remaining cash flows discounted at transition date ”incremental borrowing rate”, being the property yield for the office lease of 7.86%. It does not
require a restatement of prior period financial statements or an adjustment to equity.
1.6. 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 disposals and acquisition
On 23 January 2019, the Group disposed of an investment property located at 50 Parkside Road, Wellington, for a net sales price of $3.4 million.
On 29 March 2019, the Group purchased an investment property located at 51-61 Spartan Road, Takanini, for a net purchase price of $17.2 million.
7

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
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 2019
12 MONTHS ENDED
31 December 2018
Opening balance1,318,6551,210,805
Capital movements:
Additions17,23528,369
Disposals(152)(32)
Transfer to non-current assets classified as held for sale–(3,313)
Capital expenditure7,50513,629
Capitalised interest5941
Movement in lease incentives, fees and fixed rental income1,5022,786
26,14941,480
Unrealised fair value gain (i)23,44966,370
Closing balance
1
1,368,2531,318,655
1 Included in the 2019 balance is a right-of-use asset of $3.75 million primarily in relation to a ground lease, with an associated immaterial lease liability.
(i) Valuation
All investment properties were valued by independent valuers as at 31 December 2018 with the exception of 51-61 Spartan Road which was
independently valued as at 30 March 2019 as part of the acquisition. 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 2019 to ensure that
investment properties continue to be held at fair value. In addition to this desktop review, the following thirteen investment properties were subject to
independent valuations due to significant capital expenditure or leasing activity undertaken during the period:
ALL VALUES IN $000SValuerValuation
6-8 Greenmount Drive, East Tamaki JLL 11,600
314 Neilson Street, Penrose Savills 8,800
Carlaw Park Office Complex, Parnell CBRE 69,200
Carlaw Park Gateway Building, Parnell CBRE 34,400
320 Rosebank Road, Avondale CBRE 14,400
15 Copsey Place, Avondale JLL 14,850
6 Donnor Place, Mt Wellington CBRE 17,300
54 Carbine Road & 6a Donnor Place, Mt Wellington CBRE 32,850
9 Nesdale Avenue, Manukau Colliers 15,000
1 Niall Burgess Road, Mt Wellington JLL 4,650
7-9 Niall Burgess Road, Mt Wellington Savills 40,500
8 McCormack Place, Wellington CBRE 9,800
51-61 Spartan Road, Takanini JLL 17,950
Total 291,300
8
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2019

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
As a result of the independent valuations and the $0.65m uplift recognised as a result of the difference between the independent valuation of 51-61
Spartan Road as at 30 March 2019 and the net purchase price, the unrealised net increase in the value of investment properties for the six months ended
30 June 2019 was $23,449,000 (six months ended 30 June 2018: $7,948,000). The portfolio will next be revalued by independent valuers as at 31
December 2019.
2.2. Rental and management fee income
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2019
6 months ended
30 June 2018
Gross rental receipts and service charge income recovered from tenants 46,486 43,658
Fixed rental income adjustments 729 566
Capitalised lease incentive adjustments 20 226
Management fee income 310 236
Total rental and management fee income 47,545 44,686
2.3. Property costs
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2019
6 months ended
30 June 2018
Service charge expenses (6,277) (5,184)
Bad and doubtful debts recovery / (expense) 13 39
Other non-recoverable property costs (1,201) (1,196)
Total property costs (7,465) (6,341)
Other non-recoverable costs represents property maintenance not recoverable from tenants, property valuation fees and property leasing costs.
2.4. Net rental income
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2019
6 months ended
30 June 2018
Gross rental receipts and service charge income recovered from tenants 46,486 43,658
Fixed rental income adjustments 729 566
Capitalised lease incentive adjustments 20 226
less: Service charge expenses (6,277) (5,184)
Net rental income 40,958 39,266
2.5. Insurance income
On 21 April 2019, 314 Neilson Street, Penrose sustained fire damage. The fire has resulted in a business interruption (loss of rents claim) and a material
damage claim. The insurance income relating to business interruption is presented in the consolidated statement of comprehensive income.
2. PROPERTY (CONTINUED)
2.1 Investment properties (continued)
9

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
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 201931 December 2018
Syndicated bank facility drawn down – non-current 224,760 201,050
Fixed rate bonds – non-current 200,000 200,000
Unamortised borrowings establishment costs (2,561) (2,828)
Net borrowings 422,199 398,222
Weighted average interest rate for drawn debt (inclusive of current interest rate swaps, margins and line fees)4.56%4.86%
Weighted average term to maturity (years)3.504.00
(ii) Composition of borrowings
UNAUDITED
ALL VALUES IN $000S
AS AT 30 JUNE 2019Issue DateMaturity DateInterest Rate
Facility drawn /
amount
Undrawn
facilityFair Value
Bank Facility A–4–May–20Floating–50,000–
Bank Facility B–4–May–21Floating187,500–187,500
Bank Facility C–4–May–22Floating37,26024037,260
PFI01028–Nov–1728–Nov–244.59%100,000–107,911
PFI0201–Oct–181–Oct–254.25%100,000–105,802
Total borrowings424,76050,240438,473
AUDITED
ALL VALUES IN $000S
AS AT 31 DECEMBER 2018Issue DateMaturity DateInterest Rate
Facility drawn /
amount
Undrawn
facilityFair Value
Bank Facility A–4–May–20Floating50,000–50,000
Bank Facility B–4–May–21Floating151,05036,450151,050
Bank Facility C–4–May–22Floating–37,500–
PFI01028–Nov–1728–Nov–244.59%100,000–103,127
PFI0201–Oct–181–Oct–254.25%100,000–101,377
Total borrowings401,05073,950405,554
The Group has long-term revolving facilities (A,B and C) with a banking syndicate comprising ANZ Bank New Zealand Limited (ANZ, providing
$74,525,000), Bank of New Zealand (BNZ), Commonwealth Bank of Australia (CBA) and Westpac New Zealand Limited (Westpac) (each providing
$66,825,000), for $275,000,000.
The fair value of the fixed rate bonds is based on their listed market prices at balance date and is classified as Level 1 in the fair value hierarchy
(2018: Level 1). Interest on the PFI010 Bonds is payable quarterly in February, May, August and November in equal instalments, while interest on
the PFI020 Bonds is payable quarterly in January, April, July and October; also in equal instalments.
10
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2019

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
3. FUNDING (CONTINUED)
3.1. Borrowings (continued)
(iii) 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 2018: $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 201931 December 2018
Non-current assets 14,003 4,891
Current liabilities (431) (94)
Non-current liabilities (21,462) (13,982)
Total (7,890) (9,185)
(ii) Notional values, maturities and interest rates
UNAUDITEDAUDITED
30 June 201931 December 2018
Notional value of interest rate swaps - fixed rate payer - start dates commenced ($000S) 235,000 220,000
Notional value of interest rate swaps - fixed rate receiver
1
- start dates commenced ($000S) 200,000 200,000
Notional value of interest rate swaps - fixed rate payer - forward starting ($000S) 190,000 210,000
Total ($000S) 625,000 630,000
Percentage of borrowings fixed (%)55%55%
Fixed rate payer swaps:
Average period to expiry - start dates commenced (years) 2.73 2.10
Average period to expiry - forward starting (years from commencement) 3.48 3.53
Average (years) 3.06 2.80
Fixed rate payer swaps:
Average interest rate
2
- start dates commenced (%)3.83%4.16%
Average interest rate
2
- forward starting (% during effective period)3.32%3.43%
Average (%)3.60%3.80%
1 The Group has $200 million fixed rate receiver swaps for the duration of the two $100 million fixed interest bonds, the effect of the fixed rate receiver swaps is to convert the two
$100 million bonds to floating interest rates.
2 Excluding margin and fees.
Key estimates and assumptions: Derivative financial instruments
The fair values of derivative financial instruments are determined from valuations prepared by independent treasury advisers using Level 2 valuation
techniques (31 December 2018: 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 2019 of between 1.64% for the 90 day BKBM (31 December 2018: 1.97%) and 1.79% for the 10 year swap rate (31 December 2018: 2.65%).
There were no changes to these valuation techniques during the reporting period.
11

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
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 2019
6 months ended
30 June 2018
Total comprehensive income for the period attributable to the shareholders of the Company ($000) 46,398 29,570
Weighted average number of ordinary shares (shares) 498,723,330 498,723,330
Basic and diluted earnings per share (cents) 9.30 5.93
4.2. Net tangible assets per share
UNAUDITEDAUDITEDUNAUDITED
30 June 201931 December 201830 June 2018
Net assets ($000) 942,082 915,135 852,814
Less: Goodwill ($000) (29,086) (29,086) (29,086)
Net tangible assets ($000) 912,996 886,049 823,728
Closing shares on issue (shares) 498,723,330 498,723,330 498,723,330
Net tangible assets per share (cents) 183 178 165
5. OTHER
IN THIS SECTION
This section includes additional information that is considered less significant in the understanding of 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’.
5.1. Administrative expenses
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2019
6 months ended
30 June 2018
Audit fees and other fees paid to auditors 93 88
Employee and independent contractor benefits expense 1,207 1,242
Directors’ fees 182 322
Office expenses 443 238
Rent
1
– 55
Depreciation 52 27
Other expenses 455 406
Total administrative expenses 2,432 2,378
1 Following the adoption of NZ IFRS 16 on 1 January 2019, rent expense has been replaced by depreciation expense on the right-of-use asset and interest expense on the lease liability.
12
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2019

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
5.2. Taxation
(i) Reconciliation of accounting profit before income tax to income tax (expense) / benefit
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2019
6 months ended
30 June 2018
Profit / (loss) before income tax52,84735,508
Prima facie income tax calculated at 28%(14,797)(9,942)
Adjusted for:
Non-tax deductible revenue and expenses(4)(4)
Fair value gain on investment properties6,5662,225
Gain on disposal of investment properties(16)15
Depreciation1,2801,278
Disposal of depreciable assets17–
Deductible capital expenditure1281,042
Lease incentives, fees and fixed rental income194166
Derivative financial instruments363187
Impairment allowance411
Current year tax losses utilised / (carried forward)–1,995
Current tax prior period adjustment(57)(220)
Current taxation expense(6,322)(3,247)
Current year tax losses (utilised) / carried forward–(1,995)
Depreciation498(310)
Lease incentives, fees and fixed rental income(260)(188)
Derivative financial instruments(363)(187)
Impairment allowance(4)(11)
Other2–
Deferred taxation expense(127)(2,691)
Total taxation reported in Consolidated Statement of Comprehensive Income(6,449)(5,938)
5. OTHER (CONTINUED)
13

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
5.2. Taxation (continued)
(ii) Deferred tax
AUDITEDUNAUDITEDUNAUDITED
ALL VALUES IN $000S
31 December 2018
As at
6 months ended
30 June 2019
Recognised in profit
30 June 2019
As at
Deferred tax assets
Derivative financial instruments (2,572) 363 (2,209)
Impairment allowance (24) 4 (20)
Other– (2) (2)
Gross deferred tax assets (2,596) 365 (2,231)
Deferred tax liabilities
Investment properties 14,796 (238) 14,558
Gross deferred tax liabilities 14,796 (238) 14,558
Net deferred tax liability 12,200 127 12,327
5.3. Related party transactions
The Group has related party relationships with the following parties:
Related partyAbbreviationNature of relationship(s)
McDougall Reidy & Co LtdMRCOGregory Reidy, a senior executive who became an independent contractor with the Company on 30 June
2017 and then a non-executive Director of the Company on 30 June 2019, is also a Director of MRCO.
The Group had 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. This agreement
was terminated on 30 June 2019.
Commonwealth Bank of
Australia
CBASusan Peterson, a member of the Board of Directors, is also a Director of ASB Bank Limited (ASB),
a 100% subsidiary of CBA.
The Board of DirectorsDirectorsThe Board of Directors.

The following transactions with related parties took place:
UNAUDITEDUNAUDITED
ALL VALUES IN $000SRelated party
6 months ended
30 June 2019
6 months ended
30 June 2018
Directors’ fees - annual feesDirectors 182 187
Directors’ fees - retirement allowance paidDirectors – 135
Licence income receivedMRCO 50 50
Related party debts written off or forgiven– – –
Interest expense and bank fees incurredCBA (1,025) (1,759)
Interest income receivedCBA 259 253
5. OTHER (CONTINUED)
14
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2019

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
5.3. Related party transactions (continued)
The following positions were held with related parties:
UNAUDITEDAUDITED
ALL VALUES IN $000S UNLESS STATED OTHERWISERelated party30 June 201931 December 2018
Amounts owingCBA (224) (246)
Amounts owedCBA 53 45
Bank facility providedCBA 66,825 66,825
Bank facility drawnCBA 54,617 48,855
Notional value of interest rate swaps:
Current fixed rate payer swapsCBA 50,000 45,000
Forward starting fixed rate payer swapsCBA 50,000 60,000
Current fixed rate receiver swapsCBA 50,000 50,000
Shares held beneficially in the company (number)Directors 1,041,371 1,041,371
Shares held non-beneficially in the company (number)Directors 110,825 110,825
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. 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.
5.4. Leases
(i) Amounts recognised in the Consolidated Statement of Financial Position
The Consolidated Statement of Financial Position shows the following amounts relating to leases:
UNAUDITEDUNAUDITED
ALL VALUES IN $000S30 June 201931 December 2018
Right-of-use assets
1
Properties 358 –
Total right-of-use assets 358 –
1 Included in the line item ‘Property, plant and equipment’ in the Consolidated Statement of Financial Position.
ALL VALUES IN $000S30 June 201931 December 2018
Lease liabilities
Current
2
81 –
Non-current
3
283 –
Total lease liabilities 364 –
2 Included in the line item ‘Accounts payable, accruals and other liabilities’ in the Consolidated Statement of Financial Position.
3 Included in the line item ‘Other liabilities’ in the Consolidated Statement of Financial Position.
5. OTHER (CONTINUED)
15

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2019
5.4. Leases (continued)
(ii) Amounts recognised in the Consolidated Statement of Comprehensive Income
The Consolidated Statement of Comprehensive Income shows the following amounts relating to leases:
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2019
6 months ended
30 June 2018
Depreciation charge of right-of-use assets
4
Properties (45)–
Total depreciation charge of right-of-use assets (45)–
4 Included in the line item ‘Administrative expenses’ in the Consolidated Statement of Comprehensive Income.
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended
30 June 2019
6 months ended
30 June 2018
Interest cost
5
(16)–
5 Included in the line item ‘Interest expense and bank fees’ in the Consolidated Statement of Comprehensive Income.
The total cash outflow for leases in 2019 was $55,000.
5.5. Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating
decision-maker has been identified as the Board of Directors. The Group is internally reported as a single operating segment to the chief operating
decision-maker.
5.6. Capital commitments
As at 30 June 2019 the Group had capital commitments totalling $4,534,000 (31 December 2018: $2,891,000) relating to work on investment properties.
5.7. Subsequent events
On 27 July 2019, the Group begun actively marketing the property at 229 Dairy Flat Highway, Albany for sale using Colliers International, who have been
engaged via agency agreement to prepare a sales campaign. The disposal is expected to complete in 2019.
On 14 August 2019, the Group committed to purchase a property at Lot 11, 88 Tidal Road, Mangere. Subject to market-standard conditions, the Group
will settle the property as it is developed for a total cost of $34,169,219. An initial settlement is expected to take place in October 2019 and the project is
expected to be completed in February 2021.
On 16 August 2019, 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
4 September 2019. The gross dividend (2.4163 cents per share) carries imputation credits of 0.6163 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 2019
in respect of this dividend.
5. OTHER (CONTINUED)
16
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2019

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 2 to 16, which comprise the consolidated statement of financial position as at 30 June 2019, 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 fair presentation of these interim financial statements in accordance
with International Accounting Standard 34 Interim Financial Reporting (IAS 34) and New Zealand Equivalent to International Accounting Standard 34
Interim Financial Reporting (NZ IAS 34) and for such internal control as the Directors determine is necessary to enable the preparation of interim
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 IAS 34 and NZ IAS 34. As the auditors of the
Company, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial statements.
A review of interim 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 assurance services for the Group comprising of voting procedures over the annual
shareholders’ meeting and remuneration benchmarking. The provision of these other services has not impaired our independence.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that these interim financial statements of the Group do not present
fairly, in all material respects, the financial position of the Group as at 30 June 2019, and its financial performance and cash flows for the period then
ended, in accordance with IAS 34 and 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
19 August 2019
INDEPENDENT REVIEW REPORT
To the shareholders of Property for Industry Limited
17

www.propertyforindustry.co.nz