Divestment of Large Format Retail Assets

Stride Property Group (NS)
NZX Announcement
IMMEDIATE — 19 November 2019




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Stride Property Group
Divestment of Large Format Retail Assets
Stride Property Limited (SPL) is pleased to announce that it has today entered into a conditional
agreement to sell three large format retail properties to Investore Property Limited (Investore) for
$140.75 million.
The three assets the subject of the transaction are:
• Bunnings, Mt Roskill, Auckland;
• Mt Wellington Shopping Centre; and
• Bay Central Shopping Centre.
At the time that Investore was established by Stride Property Group (Stride), Stride stated that it
intended to hold its exposure to large format retail assets through its 19.9% holding in Investore.
This transaction furthers that intention, completing the transfer of SPL’s remaining large format
retail assets to Investore.
As part of the sale, SPL has agreed to complete certain seismic strengthening work on the
properties, as well as to provide a rental underwrite for a period of up to two years in respect of
four specific specialty tenancies. That underwrite will fall away if the relevant premises are leased
to a new tenant.
The purchase price is in line with the valuation of these assets as at 30 September 2019 of
$131.2 million, which will be included in the Stride interim financial statements as at
30 September 2019, to be released on 25 November 2019. SPL’s valuations include
allowances for the remaining costs to be incurred on the Briscoes/Rebel expansion at Bay
Central Shopping Centre, as well as certain seismic upgrade works. After allowing for the capital
works SPL has committed to Investore to undertake on the properties, and including the
estimated maximum cost of the rental underwrite described above, it is anticipated that the net
sales price will be equivalent to SPL’s 30 September 2019 valuations.
The transaction remains conditional on Investore completing due diligence to its satisfaction, the
Investore Board of Directors approving the transaction, Investore shareholders (other than SPL
and its directors) approving the acquisition (as the transaction is a material transaction with a
related party for Investore) and receipt of approval to the transaction from the Overseas

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Investment Office. Although the timing of settlement remains subject to satisfaction of these
conditions, at this stage SPL expects the transaction to settle during April 2020.
Investore has announced a capital raise to be undertaken to support the acquisition. That capital
raise includes a placement, and SPL has agreed to subscribe for its proportionate share of the
total amount to be raised in the placement, with the intention of maintaining its 19.9%
shareholding in Investore immediately after the issuance of shares under the placement but
before allotment under the retail offer.
Based on SPL’s committed transactions, including the sale of these three assets, SPL’s
participation in Investore’s capital raise and taking into account the establishment of Industre
Property, SPL is expected to have a loan to value ratio of less than 15%, providing significant
balance sheet capacity for Stride to pursue its strategy to grow its directly-held portfolio of
commercial properties that may be used to establish new investment management products, and
to support and grow Stride’s established products.
At settlement of the sale of the three properties, Investore’s total assets will grow to $891 million.
At that time, based on current values and assuming Industre Property has commenced, Stride’s
aggregate external assets under management, including Investore, Industre Property and
Diversified NZ Property Trust, will be in excess of $1.7 billion, representing growth in excess of
$450 million since 31 March 2019.
Tim Storey, Chairman of Stride, said “The sale of these assets completes Stride’s stated strategy
of holding its exposure to large format retail assets through Investore, and furthers our strategy
of creating and growing sector-specific property funds. The Board of Stride believes that the
sale is in the best interests of Stride’s shareholders and represents a positive outcome for Stride
and its shareholders”.

Ends

For further information please contact:
Tim Storey, Chairman, Stride Investment Management Limited / Stride Property Limited
Mobile: 021 633 089 - Email: tim.storey@strideproperty.co.nz


Philip Littlewood, Chief Executive, Stride Investment Management Limited
Mobile: 021 230 3026 - Email: philip.littlewood@strideproperty.co.nz


Jennifer Whooley, Chief Financial Officer, Stride Investment Management Limited
Mobile: 021 536 406 - Email: jennifer.whooley@strideproperty.co.nz


Louise Hill, General Manager Corporate Services, Stride Investment Management Limited and Company
Secretary of Stride Property Group
Mobile: 0275 580 033 - Email: louise.hill@strideproperty.co.nz

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A Stapled Security of the Stride Property Group comprises one ordinary share in Stride Property Limited and
one ordinary share in Stride Investment Management Limited. Under the terms of the constitution of each
company, the shares in each can only be transferred if accompanied by a transfer of the same number of
shares in the other.
Stapled Securities are quoted on the NZX Main Board under the ticker code SPG. Further information is
available at
www.strideproperty.co.nz or at www.nzx.com/companies/SPG.