Property for Industry Limited/Announcement

Resilient Interim Result, Dividend Guidance Reinstated

Half Year Results3 September 2020PFIReal Estate

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Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 17 October 2019

Results for announcement to the market
Name of issuer Property for Industry Limited (PFI)
Reporting Period 6 months to 30 June 2020
Previous Reporting Period 6 months to 30 June 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$50,454 -30%
Total Revenue $50,454 -30%
Net profit/(loss) from
continuing operations
$15,649 -66%
Total net profit/(loss) $15,649 -66%
Interim Dividend
Amount per Quoted Equity
Security
$0.01800000
Imputed amount per Quoted
Equity Security
$0.00490600
Record Date 11 September 2020
Dividend Payment Date 22 September 2020
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$2.048 $1.831
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 determined they were available.
This announcement is extracted from PFI’s unaudited interim
financial statements as at and for the six months ended 30 June
2020. A copy of these unaudited interim financial statements is
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

4 September 2020

Unaudited financial statements accompany this announcement.

---

Distribution Notice

Updated as at 18 December 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 X
Record date 11 September 2020
Ex-Date (one business day before the
Record Date)
10 September 2020
Payment date (and allotment date for
DRP)
22 September 2020
Total monies associated with the
distribution
$8,997,385
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution $0.02290600
Gross taxable amount $0.01752000
Total cash distribution $0.01800000
Excluded amount (applicable to listed
PIEs)
$0.00538600
Supplementary distribution amount $0.00222600
Section 3: Imputation credits and Resident Withholding Tax
Is the distribution imputed Fully imputed X
Partial imputation
No imputation
If fully or partially imputed, please
state imputation rate as % applied
28%
Imputation tax credits per financial
product
$0.00490600
Resident Withholding Tax per
financial product
N/A

Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
2%
Start date and end date for
determining market price for DRP
11 September 2020 17 September 2020
Date strike price to be announced (if
not available at this time)
18 September 2020
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
New Issue
DRP strike price per financial product
To be determined
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
14 September 2020
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

4 September 2020

---

Highlights
Interim
Results
Briefing
2020
RESILIENT INTERIM RESULT:
STRONG BALANCE SHEET:
PORTFOLIO METRICS MAINTAINED:
DIVIDEND GUIDANCE REINSTATED:
Nettangibleassetslargelyunchangedat204.8
centspershare,additionalbankfacilitysecured,
almost$130millionofavailableliquidity,gearing
of28.7%
Weightedaverageleasetermof5.28years,
occupancyof99.0%,just1.9%ofcontractrentis
duetoexpireinthesecondhalfof2020
Resilientresults,astrongbalancesheet,
continuedhighlevelsofcollectioninJulyand
August,resultinginthereinstatementofdividend
guidanceof7.65to7.70centspershare
Interimprofitaftertaxof$15.6million,FundsFromOperations
(FFO)
1
earningsup6.5%fromthepriorinterimperiodto4.78cents
pershare,AdjustedFundsFromOperations(AFFO)earningsdown
7.8%fromthepriorinterimperiodto3.79centspershare,H12020
cashdividendsof3.60centspershare
1
Funds From Operations and Adjusted Funds From Operations are non-GAAP financial information and are common property investor metrics, which have been calculated in accordance with the guidelines issued by
the Property Council of Australia. Please refer to slide 33 for further details.
4
314 NEILSON STREET

PROACTIVE STEPS TAKEN:
▪Secured an additional $50 million of liquidity from one of our key banking
partners, the Commonwealth Bank of Australia
▪Examined capital and operating costs, made cuts to and deferrals of
expenditure, where appropriate
▪Provided support for our tenants, including $0.7 million of abatement and
$0.7 million of deferral (1.6% of annual rent), support directed to our most
vulnerable tenants
▪Divestment of remaining non-industrial properties, including Carlaw Park,
put on hold due to volatile conditions (now expect to bring assets to market
late 2020)
▪Dividend reinvestment scheme reinstated
TRADING UPDATE:
▪H1 2020 financial performance materially in line with the prior interim
period and the second half of 2019
▪Change in the mix of factors contributing to H1 2020 result: decrease in
rental income, offset by savings in interest and tax (due to the
reintroduction of depreciation deductions on building structure for
commercial and industrial buildings)
▪High levels of collection have continued: more than 95% of July and
August’s rent and opexcollected
▪Stable industrial property prices (as evidenced by the results of the PFI’s
interim valuation process) recent sales of prime industrial property have
been completed at yields as low as, and in some cases even lower, than
pre-pandemic levels
▪Impact from August COVID-19 restrictions not yet known
COVID-19
Update
Interim
Results
Briefing
2020
HEALTH, SAFETY AND WELLBEING OF OUR TEAM AND TENANTS OUR TOP PRIORITY
6

PFI’S STRATEGIC DIRECTION SERVING THE COMPANY WELL:
▪Significant progress made in recent years to transition to a pure-play
industrial listed property vehicle
▪Gearing has been kept at low levels, knowing that low gearing will serve us
well in times of crisis
▪Dividends reflect what we earn, gearing isn’t increased by paying out more
than that which we have earned from our tenants
▪PFI well placed to respond to latest challenges, and any opportunities that
may arise from them
LOOKING FORWARD:
▪COVID-19 pandemic has resulted in devastating health and economic
outcomes across the globe
▪Like previous pandemics, COVID-19 is also shaping large changes to
society
▪For example, a recent report from consultants McKinsey highlighted that, in
the United States, there had been the equivalent of the last 10 years’
growth in e-commerce in just the past three months
▪Increased e-commerce volumes and businesses looking to create more
localised and resilient supply chains expected to drive additional demand
for logistics space
▪These trends are anticipated to benefit PFI’s long-held strategy of owning,
developing and acquiring quality industrial properties in sought-after areas
COVID-19
Update
Interim
Results
Briefing
2020
7

JUNE 2020DECEMBER 2019JUNE 2019
BOOK VALUE
$1,470.0m$1,476.2m
$1,368.3m
NUMBER OF PROPERTIES
9394
94
NUMBER OF TENANTS
140144
147
CONTRACT RENT
$83.6m$84.9m
$83.1m
OCCUPANCY
99.0%99.0%
99.7%
WEIGHTED AVERAGE LEASE TERM
5.28 years 5.38 years
5.71 years
AUCKLAND PROPERTY
84.2%84.1%
83.8%
INDUSTRIAL PROPERTY
91.0%90.0%
87.4%
Portfolio
Snapshot
▪PFI's portfolio is diversified across 93 properties
and 140 tenants, with 99.0% occupancy and a
weighted average lease term of 5.28 years,
weighted towards Auckland industrial property
9
1
1
4
4
73
4
1
1
4
Interim
Results
Briefing
2020

Valuations
▪All 93 properties valued at the half year (14 full valuations,
desktop valuation of the remainder), resulting in a total write
down of $7.8 million or 0.5%
▪Independent market rental assessment estimates portfolio is
~3.5% under rented
▪PFI’s passing yield is now 5.74% (was 5.84%)
▪CBRE estimate
1
Auckland prime industrial yields are 5.13% and
secondary industrial yields are 6.19%
▪Recent sales of prime industrial property have been completed
at yields as low as, and in some cases even lower, than pre-
pandemic levels
1
CBRE “Auckland Rent and Yield Trends”, July 2020.
Interim
Results
Briefing
2020
25 LANGLEY ROAD
10

Leasing
▪11 leases agreed over ~31,000 sqm of space
for an average term of 6.4 years
▪Two new leases and nine renewals secured
▪Lease renewals accounted for more than 81%
of the contract rent secured
▪Average leasing costs less than half a month
per year of term
ADDRESSTENANTTERMAREA% RENT ROLL
43 CRYERS ROADAstron Plastics5.0 years8,468 sqm1.0%
320 ROSEBANK ROADDoyle Sails12.0 years6,719 sqm0.9%
511 MT WELLINGTON
HIGHWAY
Stryker7.0 years2,179 sqm0.6%
15 COPSEY PLACECanterbury3.0 years2,809 sqm0.5%
523 MT WELLINGTON
HIGHWAY
BGH Group 6.0 years1,677 sqm0.3%
44 MANDEVILLE STREETPathway Engineering3.0 years1,815 sqm0.3%
47 ARRENWAY DRIVEDevice Technologies 2.0 years1,245 sqm0.3%
VARIOUS4 Other Transactions6.7 years6,020 sqm0.7%
11 LEASING TRANSACTIONS6.4 years30,931 sqm4.6%
Interim
Results
Briefing
2020
11

No Event56.0%
Fixed24.5%
CPI9.6%
Market7.0%
Expiry1.9%
Vacant1.0%
Rent
Reviews
▪53 rent reviews delivered an average annual uplift of ~4.1% on
~$22.5 million of contract rent
▪Five market rent reviews delivered an annualised increase of
7.1% over an average review period of 2.4 years on $1.2 million
of contract rent, reviews settled at average of ~2.6% above
December 2019 market rental assessment
▪CBRE predict
1
industrial rental growth over the next five years to
average 2.1% per annum for prime properties and 1.6% per
annum for secondary properties, down from 3.0% and 4.1%
respectively in December 2019
▪Around 44% of PFI’s portfolio is subject to some form of lease
event during H2 2020
1
CBRE “Auckland Property Market Outlook –Industrial Sector Preview”, August 2020
12
Interim
Results
Briefing
2020

1.0%
1.9%
6.8%
9.4%
13.6%
22.8%
10.2%
4.4%
8.2%
4.9%
16.8%
0%
5%
10%
15%
20%
25%
Vacant202020212022202320242025202620272028Onwards
H2 2020
Lease
Expiries
▪Portfolio is 99.0% occupied (1.0% vacancy) and 1.9% of contract
rent is due to expire in the second half of 2020, a total of 2.9%
(H2 2019: 3.1%)
▪Leasing demand remains robust, transactions totalling more
than $5.1 million either secured, or in advanced stages of
negotiation, since the end of the interim period:
−0.8% of H2 2020 expiries have been leased post balance
date, including 60% of Jacobs space at Carlaw Park,
leased to a new tenant
▪Vacancy still at historically low levels: CBRE August 2020 Market
Flash reports Auckland Prime industrial vacancy of 1.2%,
Secondary industrial vacancy at 1.5%
▪Market levels of incentive have begun to trend up
H2 2020 EXPIRIES TENANT% RENT ROLL
CARLAW PARK OFFICEJacobs0.5%
23 ZELANIAN DRIVEExclusive Tyre Distributors0.5%
515 MT WELLINGTON HIGHWAYStryker0.3%
5 Vestey DrivePPG0.3%
OTHERVarious0.3%
TOTAL1.9%
LEASED POST BALANCE DATEVarious-0.8%
REMAINING H2 2020 EXPIRIES1.1%
13
Interim
Results
Briefing
2020

PROGRESS TO DATE:
▪Developed a high level ESG strategy
▪Recruited a Sustainability, Risk & Compliance Manager
▪Established a management committee for ESG
▪Refreshed our health, safety and wellbeing framework
▪Measured our carbon footprint for the first time
▪Implemented sustainability initiatives for the PFI office
CURRENT FOCUS AREAS:
▪Understanding and responding to our climate-related risks
▪Responding to the Climate Disclosure Project (CDP)
survey for the first time
▪Agreeing the meaningful steps that we will take to enhance
our ESG performance, with implementation from 2021
HEALTH, SAFETY &
WELLBEING
RESOURCE
EFFICIENCY
LONG-TERM
THINKING
Interim
Results
Briefing
2020
Environmental,
Social and
Governance
(ESG)
14

41.6
+1.0
+0.9
+0.6
+0.4
-1.3
-0.6
-0.2
-0.2
41.0
$39m
$40m
$41m
$42m
$43m
$44m
$45m
H1 2019 net
rental income
AcquisitionsRent reviewsNew leasesFixed rent
reviews
DisposalsDevelopmentsCOVID-19
support
VacancyH1 2020 net
rental income
Net Rental
Income
▪Net rental income of $41.6
million in line with the prior
interim period ($41.0 million)
▪COVID-19 related support for
tenants included $0.7 million of
abatement and $0.7 million of
deferral, a combined total of
1.6% of annual rent
▪Abatement and deferral deals
resulted in a $1.1 million
decrease in net rental income
when compared to the prior
interim period, but accounting
entries required resulted in
recording $0.9 million of income
not received, resulting in a
change to reported net rental
income of just $0.2 million
16
Interim
Results
Briefing
2020

+0.33
+0.07
-0.01
-0.36
-0.18
-0.16
-0.01
4.11
3.79
3.4
3.6
3.8
4.0
4.2
4.4
4.6
H1 2019 AFFORebase for
shares issued
Current taxationInterest expense
and bank fees
Maintenance
capex
Non-recoverable
property costs
Net rental
income
Administrative
expenses /
Other
H1 2020 AFFO
Adjusted
Funds From
Operations
(cents per share)
▪Profit after tax of $15.6 million
▪FFO earnings of 4.78 cents
per share, 0.29 cents per
share or 6.5% ahead of the
prior interim period
▪AFFO earnings of 3.79 cents
per share, 0.32 cents per
share or 7.8% down on the
prior interim period
▪Current tax down $1.6 million,
interest expense and bank
fees down $0.3 million
▪Maintenance capex up $1.8
million to 29 basis points,
accounting entries for COVID-
19 abatement and deferral
deals of $0.8 million adjusted
out of AFFO earnings
17
Interim
Results
Briefing
2020

6.50
6.70
6.90
7.10
7.30
7.50
7.70
7.90
8.10
8.30
FY16 FY17 FY18 FY19 FY20
(forecast)
DPS (cps)AFFO (cps)
Earnings,
Dividends,
Guidance
▪Q2 dividend based on H1 2020 financial
performance, performance materially in
line with H1 and H2 2019
▪H1 2020 cash dividends total 3.60 cps, in
line with H1 2019
▪Dividend reinvestment scheme in place for
Q1 and Q2 dividends, 2% discount
▪2020 dividend guidance reinstated,
dividend of 7.65 –7.70 cps forecast to
equate to 80%-90% of FFO, 95%-100% of
AFFO
▪Given volatility in AFFO adjustments, PFI
remains mindful of the AFFO dividend
pay-out ratio over a longer time horizon
than any one period when setting
dividends, average AFFO dividend pay-
out ratio being 101.1% since PFI began
disclosing AFFO in 2016
EARNINGSH1 2020 CPSH1 2019 CPSCHANGE
FUNDS FROM OPERATIONS
4.784.49+0.29 CPS or +6.5%
ADJUSTED FUNDS FROM OPERATIONS
3.794.11-0.32 CPS or -7.8%
18
Interim
Results
Briefing
2020

1,470.0
+6.8
+1.7
-7.8
1,469.3
$1,440m
$1,445m
$1,450m
$1,455m
$1,460m
$1,465m
$1,470m
$1,475m
$1,480m
December 2019 investment
properties
Capitalised expenditure &
interest
Movement in lease
incentives, fees and fixed
rental income
Fair value lossJune 2020 investment
properties
Investment
Properties
▪Portfolio value of ~$1.47 billion,
including 127 Waterloo Road,
Christchurch, which is classified
as held for sale and is due to
settle April 2021
▪All 93 properties valued at the
half year –including 14 full
valuations –resulting in write
down of $7.8 million or 0.5%
▪Significant capex at 59 Dalgety
Drive (refurbishment) and 314
Neilson Street (development)
19
Interim
Results
Briefing
2020

205.5
204.8
+0.6
+0.5
-1.6
-0.2
202
203
204
205
206
207
208
December 2019 NTARetained earningsMaterial damage
insurance income
Fair value loss on
investment properties
Fair value loss on
derivative financial
instruments
June 2020 NTA
Net Tangible
Assets
(cents per share)
▪Net tangible assets (NTA) per
share decreased by 0.7 cents
per share or 0.3%
▪Change in NTA per share driven
by the increase in retained
earnings (+0.6 cps) and material
damage insurance income (+0.5
cps), offset by a decrease in the
fair value of investment
properties (-1.6 cps) and a
decrease in the fair value of
derivative financial instruments
(-0.2 cps)
20
Interim
Results
Briefing
2020

Funding,
Covenants,
Interest
Rates
▪$50 million liquidity facility secured from
CBA in March 2020 in response to the risks
associated with COVID-19
▪Large fall in the three-month Bank Bill
Market (or “float”) rate contributed to a
0.46% reduction in PFI’s weighted average
cost of debt during H1 2020
▪High levels of liquidity from a diverse range
of sources, ultra-low interest rates and
headroom to covenant levels provide PFI
with a strong funding position
▪Bank loan market remains supportive of PFI
▪Subject to market conditions, considering
options such as another bond issue, to
further extend and diversify borrowings
JUNE 2020DECEMBER 2019
FUNDING
BANK FACILITIES DRAWN
$222.3m $215.6m
BANK FACILITIES LIMIT
$350.0m$300.0m
BANK FACILITIES HEADROOM
$127.7m$84.4m
FIXED RATE BONDS
$200.0m$200.0m
FUNDING TERM (AVERAGE)
3.4 years4.1 years
BANKS
ANZ, BNZ, CBA, WestpacANZ, BNZ, CBA, Westpac
COVENANTS
LOAN-TO-VALUE RATIO (COVENANT: <50%)
28.7%28.2%
INTEREST COVER RATIO (COVENANT: >2.0X)
4.1 times4.0 times
INTEREST RATES
WEIGHTEDAVERAGE COST OF DEBT
4.17%4.63%
INTERESTRATE HEDGING (EXCL. FORWARD STARTING)
$295m/ 3.18% / 3.1 years$245m/ 3.75% / 2.4 years
FORWARD STARTING INTEREST RATE
$160m / 3.27% / 3.4 years$190m / 3.32% / 3.5 years
22
Interim
Results
Briefing
2020

1.0%
1.4%
1.8%
2.2%
2.6%
3.0%
3.4%
3.8%
4.2%
4.6%
5.0%
$0m
$50m
$100m
$150m
$200m
$250m
$300m
Jun-20Dec-20Jun-21Dec-21Jun-22Dec-22Jun-23Dec-23Jun-24Dec-24Jun-25Dec-25Jun-26Dec-26
CoverInterest Rate
50.0
150.0150.0
100.0100.0
0.0
50.0
100.0
150.0
200.0
FY20FY21FY22FY23FY24FY25
Bank facilitiesBonds
Debt Facility
Maturity
Profile,
Hedging
▪Average borrowings increased
by $6.0 million or 1.5%
▪Average term to expiry bank
facilities and bonds (top graph)
of 3.4 years, $127.7 million of
unutilised bank facility capacity
▪Ability to meet capital
commitments regardless of the
progress of divestment
programme
▪Fixed rate payer hedging profile
(bottom graph) provides for an
average of ~58% of debt to be
hedged at an average fixed rate
of ~3.44% for the remainder of
2020, with the remainder on low
float interest rates
23
Interim
Results
Briefing
2020

Market
Update
▪Challenging economic outlook:
−“Households and businesses are cautious, and
unemployment is rising. Investment and
spending will be weaker, with policy providing
an important but only partial offset. Despite our
enviable position, the slowdown will be large
and the recovery slow.” ANZ July 2020
Quarterly Economic Outlook
▪Official Cash Rate now widely expected to turn
negative in 2021
▪Low interest rates are contributing to a demand for
industrial property investment that continues to
outstrip supply
▪CBRE “Auckland Property Market Outlook –
Industrial Sector Preview”, August 2020:
−Outlook for vacancy and yields has improved
since December 2019
−Softer outlook for rents, as more generous
incentives are offered to prospective tenants
CBREAUCKLAND MARKET OUTLOOKJUNE 2020
5-YEAR
FORECAST:
JUNE 2020
5-YEAR
FORECAST:
DECEMBER 2019
PRIME INDUSTRIAL
VACANCY1.2%1.1%▲1.4%
RENTS$141+2.1%▼+2.5%
YIELDS5.13%4.74%▲4.90%
SECONDARY INDUSTRIAL
VACANCY1.5%1.7%▲2.1%
RENTS$112+1.6%▼+3.0%
YIELDS6.19%5.65%▲5.80%
25
Interim
Results
Briefing
2020

OUR PURPOSE
PFIgeneratesincomeforinvestorsasprofessionallandlordsto
theindustrialeconomy,generatingprosperityforNewZealand.
OUR VISION
PFIwillbeoneofNewZealand’sforemostListedProperty
Vehicles.Ourmeasureswillbeperformance,quality,scaleand
reputation.
SIGNIFICANT PROGRESS
▪$130.5millioninvestedand$47.8milliondivestedsince
strategyrefreshatthebeginningof2019(seenextslide)
▪COVID-19pandemichascreatedfreshchallenges,shortterm
strategyhasrespondedaccordingly(referCOVID-19update
onslides6and7)
OUR STRATEGIC DIRECTION
▪Transitioningtoapure-playindustrialListedPropertyVehicle
▪IncreasingourAucklandweighting
▪Improvingthepropertyandtenancyfundamentalsofour
portfolio
▪Decreasingtheaverageageofourportfolio
2020
Interim
Results
Briefing
2020
Purpose,
Vision,
Strategic
Direction,
Progress
27

Interim
Results
Briefing
2020
Significant
Progress
$130.5M
INVESTED
$47.8M
DIVESTED
28

DISPOSALS:
2020 focus: complete build out of current projects, advance other
opportunities within the portfolio
ACQUISITIONS:
2020 focus: acquisitions to match the disposal of
remaining non-industrial properties
2020 focus:disposal of remaining non-industrial
properties, including Carlaw Park and Shed 22
ASSET MANAGEMENT:
2020 focus: COVID-19 response, leasing of
vacant and expiring spaces
VALUE-ADD STRATEGIES:
Interim
Results
Briefing
2020
2020 Focus
LOT 1, 88 TIDAL ROAD
29

Review &
Questions
Questions?
31
LOOKING FORWARD:
▪Resilient interim result despite a period of
significant volatility and uncertainty
▪Returns reflect ownership of the right industrial
properties, in the right locations, filled with
quality tenants, managed by an experienced and
dedicated team, coupled with conservative
gearing and dividend pay-out ratios
▪Demand for industrial space due to increased e-
commerce volumes and businesses looking to
create more localised and resilient supply chains
are trends that are anticipated to benefit PFI
▪PFI is well placed to respond to challenges and
any opportunities that may arise from them
HIGHLIGHTS:
▪Resilient interim result
▪Strong balance sheet
▪Portfolio metrics maintained
▪Dividend guidance reinstated
Interim
Results
Briefing
2020

Appendix 1:
FFO and
AFFO
(Unaudited, $000, unless noted)6ME June 20206ME June 2019
Profit and total comprehensive income after income tax attributable to the shareholders of the Company
15,64946,398
Adjusted for:
Fair value (loss) / gain on investment properties
7,803(23,449)
Material damage insurance income
(2,151)-
Loss on disposal of investment properties
1457
Fair value loss/ (gain) on derivative financial instruments
1,023(1,297)
Amortisation of tenant incentives
1,3731,297
Straight lining of fixed rental increases
(999)(717)
Deferred taxation
1,133127
Other
3-
Funds From Operations (FFO)
23,84822,416
FFO per share (cents)
4.784.49
FFO dividend pay-out ratio (%)
80%85%
Maintenance capex
(2,169)(374)
Incentives and leasing fees given for the period
(1,985)(1,556)
Other (incl. reversal of accounting entries for COVID-19 abatement and deferral deals)
(785)-
Adjusted Funds From Operations (AFFO)
18,90920,486
AFFO per share (cents)
3.794.11
AFFO dividend pay-out ratio (%)
101%93%
33
Interim
Results
Briefing
2020

Disclaimer
The information included in this presentation is provided as at 4 September 2020 and should be read in conjunction with the NZX
results announcement, newsletter, 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.
34
Interim
Results
Briefing
2020

---

Property
for
Industry
Limited
Group
Interim
Financial
Statements
30 June
2020
FINANCIAL
STATEMENTS.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2020
The accompanying notes form part of these financial statements.
UNAUDITEDUNAUDITED
All VALUES IN $000sNOTE
6 months ended
30 June 2020
6 months ended
30 June 2019
INCOME
Rental and management fee income2.3 48,024 47,545
Licence income5.3 – 50
Interest income 2 2
Fair value gain on investment properties2.1 – 23,449
Fair value gain on derivative financial instruments – 1,297
Business interruption insurance income2.6 108 42
Material damage insurance income2.6 2,320 –
Total income 50,454 72,385
EXPENSES
Property costs2.4 (8,185) (7,465)
Interest expense and bank fees (9,250) (9,584)
Administrative expenses5.1 (2,701) (2,432)
Loss on disposal of investment properties (14) (57)
Fair value loss on investment properties2.1 (7,803) –
Fair value loss on derivative financial instruments (1,023) –
Total expenses (28,976) (19,538)
Profit before taxation 21,478 52,847
Income tax expense5.2 (5,829) (6,449)
Profit and total comprehensive income after income tax attributable to the shareholders of the
Company4.1 15,649 46,398
Basic earnings per share (cents)4.1 3.14 9.30
Diluted earnings per share (cents)4.1 3.14 9.30
2
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2020

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2020
The accompanying notes form part of these financial statements.
Cents
per Share
(cents)
No. of
Shares
(#)
Ordinary
Shares
($000s)
Share-Based
Payments
Reserve
($000s)
Retained
Earnings
($000s)
Total
Equity
($000s)
Balance as at 1 January 2019 (audited) – 498,723,330 562,429 – 352,706 915,135
Total comprehensive income – – – 46,398 46,398
Dividends and reinvestment
Q4 2018 final dividend - 13/3/2019 2.10 – – – (10,474) (10,474)
Q1 2019 interim dividend - 26/5/2019 1.80 – – – (8,977) (8,977)
Long-term incentive plan – – – – –
Balance as at 30 June 2019 (unaudited) – 498,723,330 562,429 – 379,653 942,082
Balance as at 1 January 2020 (audited) – 498,723,330 562,429 270 491,338 1,054,037
Total comprehensive income – – – 15,649 15,649
Dividends and reinvestment
Q4 2019 final dividend - 4/3/2020 2.15 – – – (10,724) (10,724)
Q1 2020 interim dividend - 26/5/2020 1.80 – – – (8,978) (8,978)
Q1 2020 dividend reinvestment 1,086,032 2,555 – – 2,555
Long-term incentive plan 45,352 155 47 – 202
Balance as at 30 June 2020 (unaudited) – 499,854,714 565,139 317 487,285 1,052,741
3

UNAUDITEDAUDITED
All VALUES IN $000sNOTE30 June 202031 December 2019
CURRENT ASSETS
Cash at bank 3,160 1,185
Accounts receivable, prepayments and other assets 4,163 2,419
Total current assets 7,323 3,604
NON-CURRENT ASSETS
Investment properties2.1 1,465,715 1,469,285
Property, plant and equipment 597 616
Derivative financial instruments3.2 22,897 13,212
Goodwill 29,086 29,086
Total non-current assets 1,518,295 1,512,199
Non-current assets classified as held for sale2.2 4,301 6,893
Total assets 1,529,919 1,522,696
CURRENT LIABILITIES
Derivative financial instruments3.2 792 840
Accounts payable, accruals and other liabilities 11,129 9,597
Taxation payable 1,226 12,867
Total current liabilities 13,147 23,304
NON-CURRENT LIABILITIES
Borrowings3.1 419,832 412,948
Derivative financial instruments3.2 29,737 18,982
Deferred tax liabilities5.2 14,267 13,185
Lease liabilities5.4 195 240
Total non-current liabilities 464,031 445,355
Total liabilities 477,178 468,659
Net assets4.2 1,052,741 1,054,037
EQUITY
Share capital 565,139 562,429
Share-based payments reserve 317 270
Retained earnings 487,285 491,338
Total equity 1,052,741 1,054,037
These Group interim financial statements are signed on behalf of Property for Industry Limited and were authorised for issue on 4 September 2020.
Anthony Beverley Susan Peterson
Chairman Chair, Audit and Risk Committee
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
The accompanying notes form part of these financial statements.
4
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2020

The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2020
UNAUDITEDUNAUDITED
All VALUES IN $000sNOTE
6 months ended
30 June 2020
6 months ended
30 June 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Property and management fee income received 46,342 45,834
Business interruption insurance income2.6 108 –
Licence income5.3 – 50
Net GST paid (890) (996)
Interest received 2 2
Interest and other finance costs paid (9,221) (9,453)
Payments to suppliers and employees (7,374) (10,836)
Income tax paid (16,337) (8,948)
Net cash flows from operating activities 12,630 15,653
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment properties 6,865 3,408
Acquisition of investment properties – (17,235)
Acquisition of property, plant and equipment (26) (26)
Expenditure on investment properties (9,278) (6,633)
Capitalisation of interest on development properties2.1 (38) (59)
Material damage insurance income2.6 2,320 –
Net cash flows from investing activities (157) (20,545)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (repayment of) / proceeds from syndicated bank facility (43,296) 23,710
Net proceeds from bilateral CBA bank facility 50,000 –
Principal elements of finance lease payments (55) (55)
Dividends paid to shareholders net of reinvestments (17,147) (19,451)
Net cash flows from financing activities (10,498) 4,204
Net increase / (decrease) in cash and cash equivalents 1,975 (688)
Cash and cash equivalents at beginning of period 1,185 1,652
Cash and cash equivalents at end of period 3,160 964
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. Significant events and transactions7
2. PROPERTY8
2.1. Investment properties8
2.2. Non-current assets classified as held for sale9
2.3. Rental and management fee income9
2.4. Property costs10
2.5. Net rental income10
2.6. Insurance income10
3. FUNDING11
3.1. Borrowings11
3.2. Derivative financial instruments12
4. INVESTOR RETURNS AND INVESTMENT METRICS13
4.1. Earnings per share13
4.2. Net tangible assets per share13
5. OTHER14
5.1. Administrative expenses14
5.2. Taxation15
5.3. Related party transactions16
5.4. Leases17
5.5. Operating segments18
5.6. Capital commitments18
5.7. Subsequent events18
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2020
6
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2020

NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2020
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 consolidated 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 the Financial
Reporting Act 2013 and these unaudited 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).
They comply with NZ IAS 34 ‘Interim Financial Reporting’ and IAS 34 ‘Interim Financial Reporting’.
These 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 2019 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 regularly 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 2019, other than those outlined in
the ‘COVID-19 global pandemic’ section of note 1.5 below.
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 2019.
1.5. 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 disposal
On 13 March 2020, the Group settled the disposal of a non-current asset classified as held for sale located at 2 Pacific Rise, Mount Wellington, for a net
sales price of $6.9 million.
On 7 July 2020, the Group announced the divestment of 127 Waterloo Road, Christchurch for a gross sales price of $4.410 million. Settlement is
expected to take place in April 2021, and this property has been classified as a non-current asset classified as held for sale in these financial statements.
Bilateral bank facility
On 19 March 2020, the Group entered into a $50 million 18 month bilateral bank facility provided by Commonwealth Bank of Australia (CBA). A bilateral
bank facility is a facility agreement between a single lender (a bank) and a single borrower (a corporate customer).
COVID-19 global pandemic
In March 2020, the World Health Organisation designated COVID-19 to be a ‘Global Pandemic’, threatening the health and well-being of large numbers of
people across multiple countries. The global outbreak has caused escalating levels of societal uncertainty. At 11:59pm on 8th June New Zealand moved
to a Government-directed ‘Alert Level 1’, having progressively moved down the alert levels over a period of eleven weeks from the most restrictive ‘Alert
Level 4’ lockdown, making a significant step towards pre-pandemic normality.
A significant proportion of the Group’s tenants were impacted by disruptions and uncertainty and therefore the Group has worked with its tenant base,
particularly the most vulnerable businesses, to offer appropriate support during this pandemic. This support has largely come in the form of rent
deferrals and rent abatement.
As part of the Group’s immediate response to COVID-19, a review of costs, both capital and operating in nature, was undertaken resulting in cuts to and
deferrals of expenditure where appropriate. The Group also put divestments of non-industrial properties on hold during the period, but these properties
will be divested at an appropriate time. Finally, discussions with the Group’s tenants are expected to continue throughout much of 2020.
The pandemic has resulted in impacts to key estimates and judgements used in these unaudited interim financial statements, including:
• Investment property valuations being impacted as at 30 June 2020, as detailed in note 2.1.
• The re-introduction of depreciation allowances for commercial building structures impacting tax expense estimates for future periods, as detailed in
note 5.2.
7

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
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 2020
12 MONTHS ENDED
31 December 2019
Opening balance 1,469,285 1,318,655
Capital movements:
Additions– 45,734
Disposals– (28,020)
Transfer to non-current assets classified as held for sale (4,301) (6,893)
Capital expenditure 6,782 14,074
Capitalised interest 38 135
Movement in lease incentives, fees and fixed rental income 1,714 407
4,233 25,437
Unrealised fair value (loss) / gain (i) (7,803) 125,193
Closing balance
1
1,465,715 1,469,285
1 Included in the 2020 balance is a right-of-use asset of $3.75 million (2019: $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 2019. 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 2020 to
determine the current valuation of each property in the portfolio. In addition to this desktop review, the following fourteen investment properties were
subject to full independent valuations due to a change of plus or minus 5% of the market value assessed in the asset valuation as at the prior year end, or
the Board determining that a full valuation was appropriate due to other considerations, such as significant capital expenditure or leasing activity
undertaken during the period.
ALL VALUES IN $000SValuerValuation
43 Cryers Road, East Tamaki CBRE 15,000,000
314 Neilson Street, Penrose Savills 12,100,000
Shed 22, 23 Cable Street, Wellington CBRE 11,150,000
3 Hocking Street, Mt Maunganui Colliers 2,700,000
47 Dalgety Drive, Manukau Colliers 17,300,000
59 Dalgety Drive, Manukau Colliers 14,800,000
Carlaw Park Gateway Building, Parnell CBRE 31,500,000
6 Donnor Place, Mt Wellington CBRE 27,650,000
212 Cavendish Drive, Manukau JLL 38,000,000
1 Ron Driver Place, East Tamaki JLL 7,800,000
76 Carbine Road, Mt Wellington JLL 9,700,000
523 Mt Wellington Highway, Mt Wellington Colliers 5,200,000
44 Mandeville Street, Christchurch CBRE 11,725,000
41 & 55 Foremans Road, Christchurch Savills 12,000,000
Total216,625,000

8
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2020

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
2. PROPERTY (CONTINUED)
2.1 Investment properties (continued)
As a result of the desktop review, the independent valuations and the revaluation loss recorded when transferring the property located at 127 Waterloo
Road from investment properties to non-current assets classified as held for sale, the unrealised net movement in the value of investment properties for
the six months ended 30 June 2020 was a loss of $7,803,000 (six months ended 30 June 2019: $23,449,000 unrealised net gain booked on the fourteen
full independent valuations undertaken in the period). The portfolio will next be revalued by independent valuers as at 31 December 2020.
Key estimates and assumptions: Investment Properties - Impact of the COVID-19 global pandemic
As at 30 June 2020, the real estate markets to which the Group’s investment properties belong were still being impacted by the effects of the
significant market uncertainty caused by the COVID-19 pandemic.
When completing the valuations, the independent registered valuers have included a ‘material valuation uncertainty’ clause in their 30 June 2020
valuation reports, indicating that less weight can be attached to previous market evidence for comparison purposes, to inform value at 30 June 2020,
and that less certainty and a higher degree of caution should be attached to the valuations than would normally be the case. Given the unknown future
impact that COVID-19 may have on the real estate market, the registered valuers have recommended that the valuation of each property is kept under
periodic review.
The ‘material valuation uncertainty’ has affected key inputs, assumptions and processes used in the valuation of the Group’s investment properties
and has caused a write-down in this valuation. One particular judgement where this has been evident is an increase in the time it is expected to take to
lease properties with upcoming lease expiries.
2.2. Non-current assets classified as held for sale
UNAUDITEDAUDITED
All VALUES IN $000s30 June 202031 December 2019
2 Pacific Rise, Mt Wellington – 6,893
127 Waterloo Road, Christchurch 4,301 –
Total non-current assets classified as held for sale 4,301 6,893
On 18 February 2019, the Group announced its strategy of replacing its non-industrial assets with quality industrial properties in sought-after areas,
either via acquisitions or by value-add strategies within the existing portfolio. As at 30 June 2020, however, the non-industrial properties within the
portfolio - Carlaw Park Gateway Building, Carlaw Park Office Complex and Shed 22, 23 Cable Street - cannot be classified as non-current assets
classified as held for sale as they do not meet the defined requirements. These requirements are that the asset is available for immediate sale in its
present condition, the appropriate level of management are committed to a plan to sell the asset, an active programme to locate a buyer has been
initiated, the asset must be actively marketed for sale at a reasonable price, and the sale should be expected to qualify for recognition as a completed
sale within one year from the date of classification.
2.3. Rental and management fee income
UNAUDITEDUNAUDITED
ALL VALUES IN $000S
6 months ended 30
June 2020
6 months ended
30 June 2019
Gross rental receipts 38,963 40,209
Service charge income recovered from tenants 6,101 6,277
Fixed rental income adjustments 999 729
Capitalised lease incentive adjustments 645 20
Rental income deferred and abated due to COVID-19 984 -
Management fee income 332 310
Total rental and management fee income 48,024 47,545
9

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
2.4. Property costs
UNAUDITEDUNAUDITED
ALL VALUES IN $000s
6 months ended
30 June 2020
6 months ended
30 June 2019
Service charge expenses (6,101) (6,277)
Bad and doubtful debts (expense) / recovery
1
(410) 13
Other non-recoverable property costs (1,674) (1,201)
Total property costs (8,185) (7,465)
1 Included in the 2020 balance is $184,000 specifically relating to COVID-19 rent deferrals provided and a further $86,000 relating to tenants adversely affected by COVID-19.
Other non-recoverable costs represents property maintenance not recoverable from tenants, property valuation fees and property leasing costs.
2.5. Net rental income
UNAUDITEDUNAUDITED
ALL VALUES IN $000s
6 months ended
30 June 2020
6 months ended
30 June 2019
Gross rental receipts 38,963 40,209
Service charge income recovered from tenants 6,101 6,277
Fixed rental income adjustments 999 729
Capitalised lease incentive adjustments 645 20
Rental income deferred and abated due to COVID-19 984 –
less: Service charge expenses (6,101) (6,277)
Net rental income 41,591 40,958
2.6. 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 and to material damage is presented in the Consolidated Statement of
Comprehensive Income. Further insurance proceeds are expected to be received and recognised in subsequent periods.
2. PROPERTY (CONTINUED)
10
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2020

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
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 202031 December 2019
Bilateral CBA bank facility drawn down - non-current 50,000 –
Syndicated bank facility drawn down - non-current 172,280 215,576
Fixed rate bonds - non-current 200,000 200,000
Unamortised borrowings establishment costs (2,448) (2,628)
Net borrowings 419,832 412,948
Weighted average interest rate for drawn debt (inclusive of current interest rate swaps, margins and line fees)4.17%4.63%
Weighted average term to maturity (years)3.424.14
(ii) Composition of borrowings
UNAUDITED
All VALUES IN $000s
As at 30 June 2020Issue DateMaturity DateInterest Rate
Facility drawn /
amount
Undrawn
facilityFair Value
Bilateral CBA Bank Facility–18–Sep–21Floating 50,000 – 50,000
Bank Facility A–4–Nov–22Floating 150,000 – 150,000
Bank Facility B–4–Nov–23Floating 22,280 127,720 22,280
PFI01028–Nov–1728–Nov–244.59% 100,000 – 110,804
PFI0201–Oct–181–Oct–254.25% 100,000 – 109,803
Total borrowings 422,280 127,720 442,887
AUDITED
All VALUES IN $000s
As at 30 June 2019Issue DateMaturity DateInterest Rate
Facility drawn /
amount
Undrawn
facilityFair Value
Bank Facility A–4–Nov–22Floating 150,000 – 150,000
Bank Facility B–4–Nov–23Floating 65,576 84,424 65,576
PFI01028–Nov–1728–Nov–244.59% 100,000 – 107,924
PFI0201–Oct–181–Oct–254.25% 100,000 – 106,392
Total borrowings 415,576 84,424 429,892
The Group has long-term revolving 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) (each providing $75,000,000), for $300,000,000. In
addition, a short-term bilateral facility with CBA for $50,000,000 was established during the period. The carrying values of the bank facilities
approximate the fair value of the facilities because the loans have floating rates of interest that reset every 30-90 days.
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 (2019:
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. Both bonds are listed on the NZDX.
11

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
(iii) Security
The Group’s bank facilities 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 $1,100,000,000 (31 December 2019: $1,000,000,000). In addition to this, the bank
facility agreements and the fixed rate bond terms also contain a negative pledge. The Company and PFI No. 1 are guarantors to the bank facilities and
the fixed rate bonds.
3.2. Derivative financial instruments
(i) Fair values
UNAUDITEDAUDITED
ALL VALUES IN $000s30 June 202031 December 2019
Non-current assets 22,897 13,212
Current liabilities (792) (840)
Non-current liabilities (29,737) (18,982)
Total (7,632) (6,610)
(ii) Notional values, maturities and interest rates
UNAUDITEDAUDITED
30 June 202031 December 2019
Notional value of interest rate swaps - fixed rate payer - start dates commenced ($000s) 295,000 245,000
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) 160,000 190,000
Total ($000s) 655,000 635,000
Percentage of borrowings fixed (%)70%59%
Fixed rate payer swaps:
Average period to expiry - start dates commenced (years) 3.13 2.40
Average period to expiry - forward starting (years from commencement) 3.38 3.48
Average (years) 3.21 2.87
Fixed rate payer swaps:
Average interest rate
2
- start dates commenced (%)3.18%3.75%
Average interest rate
2
- forward starting (% during effective period)3.27%3.32%
Average (%)3.21%3.55%
1 The Group has $200 million fixed rate receiver swaps for the duration of the two $100 million fixed rate bonds, the effect of the fixed rate receiver swaps is to convert the two
$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 2019: 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 2020 of between 0.30% for the 90 day BKBM (31 December 2019: 1.29%) and 0.735% for the 10 year swap rate (31 December 2019: 1.79%).
There were no changes to these valuation techniques during the reporting period.
3. FUNDING (CONTINUED)
3.1. Borrowings (continued)
12
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS 2020

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
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
(i) Basic earnings per share
UNAUDITEDUNAUDITED
6 months ended
30 June 2020
6 months ended
30 June 2019
Total comprehensive income for the period attributable to the shareholders of the Company ($000s) 15,649 46,398
Weighted average number of ordinary shares (shares) 498,956,350 498,723,330
Basic earnings per share (cents) 3.14 9.30
(ii) Diluted earnings per share
The calculation of diluted earnings per share has been based on the profit attributable to ordinary shareholders and weighted-average number of
ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares. Weighted average number of shares for the purpose
of diluted earnings per share has been adjusted for 50,391 (30 June 2019: nil) rights issued under the Group’s LTI Plan as at 30 June 2020. This
adjustment has been calculated using the treasury share method.
UNAUDITEDUNAUDITED
6 months ended
30 June 2020
6 months ended
30 June 2019
Total comprehensive income for the period attributable to the shareholders of the Company ($000s) 15,649 46,398
Weighted average number of shares for purpose of diluted earnings per share (shares) 499,007,281 498,723,330
Diluted earnings per share (cents) 3.14 9.30
4.2. Net tangible assets per share
UNAUDITEDAUDITEDUNAUDITED
30 June 202031 December 201930 June 2019
Net assets ($000s) 1,052,741 1,054,037 942,082
Less: Goodwill ($000s) (29,086) (29,086) (29,086)
Net tangible assets ($000s) 1,023,655 1,024,951 912,996
Closing shares on issue (shares) 499,854,714 498,723,330 498,723,330
Net tangible assets per share (cents) 205 206 183
13

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
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 2020
6 months ended
30 June 2019
Audit fees and other fees paid to auditors 57 42
Employee expense 1,546 1,426
Directors’ fees 290 182
Office expenses 309 224
Depreciation 84 52
Other expenses 415 506
Total administrative expenses 2,701 2,432
14
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2020

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
5. OTHER (CONTINUED)
5.2. Taxation
(i) Reconciliation of accounting profit before income tax to income tax expense
UNAUDITEDUNAUDITED
ALL VALUES IN $000s
6 months ended
30 June 2020
6 months ended
30 June 2019
Profit before income tax 21,478 52,847
Prima facie income tax calculated at 28% (6,014) (14,797)
Adjusted for:
Non-tax deductible revenue and expenses (75) (4)
Fair value (loss) / gain on investment properties (2,185) 6,566
Gain on disposal of investment properties (4) (16)
Depreciation 2,177 1,280
Disposal of depreciable assets – 17
Deductible capital expenditure 1,143 128
Lease incentives, fees and fixed rental income 380 194
Derivative financial instruments (286) 363
Impairment (allowance) / gains(115) 4
Current tax prior period adjustment 8 (57)
Other 275 –
Current taxation expense (4,696) (6,322)
Current year tax losses (utilised) / carried forward – –
Depreciation (877) 498
Lease incentives, fees and fixed rental income (410) (260)
Derivative financial instruments 286 (363)
Impairment (allowance) / gains 63 (4)
Other (195) 2
Deferred taxation expense (1,133) (127)
Total taxation reported in Consolidated Statement of Comprehensive Income (5,829) (6,449)
As part of the assistance package offered by the Government on 25 March 2020, depreciation allowances were re-introduced for commercial building
structure effective from 1 April 2020, and this has been reflected in the table above.
15

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
5. OTHER (CONTINUED)
5.2. Taxation (continued)
(ii) Deferred tax
AUDITEDUNAUDITEDUNAUDITED
ALL VALUES IN $000s
31 December 2019
As at
6 months ended
30 June 2020
Recognised in profit
30 June 2020
As at
Deferred tax assets
Derivative financial instruments (1,851) (286) (2,137)
Impairment allowance (20) (63) (83)
Other (63) 144 81
Gross deferred tax assets (1,934) (205) (2,139)
Deferred tax liabilities
Investment properties 15,119 1,287 16,406
Gross deferred tax liabilities 15,119 1,287 16,406
Net deferred tax liability 13,185 1,082 14,267
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, was also a Director of ASB Bank Limited (ASB), a
100% subsidiary of CBA, during the periods presented in these financial statements, however she
resigned from this position effective 30 June 2020.
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 2020
6 months ended
30 June 2019
Directors’ fees - annual feesDirectors 290 182
Licence income receivedMRCO– 50
Related party debts written off or forgiven–––
Interest expense and bank fees incurredCBA (1,082) (1,025)
Interest income receivedCBA 482 259
16
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS — 2020

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
5. OTHER (CONTINUED)
5.3. Related party transactions (continued)
The following positions were held with related parties:
UNAUDITEDAUDITED
ALL VALUES IN $000s unless stated otherwiseRelated party30 June 202031 December 2019
Amounts owingCBA (274) (246)
Amounts owedCBA 116 79
Bank facility providedCBA 125,000 75,000
Bank facility drawnCBA 93,070 53,894
Notional value of interest rate swaps:
Current fixed rate payer swapsCBA 60,000 50,000
Forward starting fixed rate payer swapsCBA 50,000 50,000
Current fixed rate receiver swapsCBA 50,000 50,000
Shares held beneficially in the company (number)Directors 193,632 191,371
Shares held non-beneficially in the company (number)Directors– 110,825
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:
UNAUDITEDAUDITED
ALL VALUES IN $000s30 June 202031 December 2019
Right-of-use assets
1
Properties 269 314
Total right-of-use assets 269 314
1 Included in the line item ‘Property, plant and equipment’ in the Consolidated Statement of Financial Position.
ALL VALUES IN $000S30 June 202031 December 2019
Lease liabilities
Current
2
88 85
Non-current
3
195 240
Total lease liabilities 283 325
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 ‘Lease liabilities’ in the Consolidated Statement of Financial Position.
17

NOTES TO THE FINANCIAL STATEMENTS
(
CONTINUED
)
FOR THE SIX MONTHS ENDED 30 JUNE 2020
(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 2020
6 months ended
30 June 2019
Depreciation charge of right-of-use assets
4
Properties (45) (45)
Total depreciation charge of right-of-use assets (45) (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 2020
6 months ended
30 June 2019
Interest cost
5
(13) (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 2020 was $55,000 (2019: $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 2020, the Group had capital commitments totalling $68,787,000 (31 December 2019: $81,490,000) as follows:
ALL VALUES IN $000s30 June 202031 December 2019
AddressProject
314 Neilson StreetDesign and build 2,014 4,677
47 Dalgety Drive
6
Design and build 286 8,123
59 Dalgety DriveRefurbishment 5,849 6,592
25 Langley RoadAcquisition of warehouse on completion of construction 7,532 7,532
6 Donnor PlaceRefurbishment– 1,412
Lot 1, 88 Tidal RoadAcquisition 18,970 18,984
Lot 11, 88 Tidal RoadAcquisition 34,136 34,170
Total capital commitments 68,787 81,490
6 As part of the Group’s immediate response to COVID-19 the new build project at 47 Dalgety Drive has been put on hold. The above capital commitment relates to the conversion of the
surplus land into a metalled yard.
5.7. Subsequent events
As noted in section 1.5, on 7 July 2020, the Group announced the divestment of 127 Waterloo Road, Christchurch for a gross sales price of $4.410 million.
Settlement is expected to take place in April 2021, and this property has been classified as a non-current asset classified as held for sale in these
financial statements.
On 12 August 2020, all regions in New Zealand, except for the Auckland region, moved to Alert Level 2 (Auckland region: Alert Level 3) for a period of two weeks
in response to several cases of community transmission of COVID-19, following an extended period with no cases. At this stage the impact is unknown.
On 4 September 2020, the Directors of the Company approved the payment of a net dividend of $8,997,000 (1.8000 cents per share) to be paid on
22 September 2020. The gross dividend (2.2906 cents per share) carries imputation credits of 0.4906 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 2020
in respect of this dividend.
5. OTHER (CONTINUED)
5.4. Leases (continued)
18
PROPERTY FOR INDUSTRY LIMITED GROUP INTERIM FINANCIAL STATEMENTS 2020

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 18, which comprise the consolidated statement of financial position as at 30 June 2020, 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 services for the Group in the area of voting procedures over the annual shareholders’
meeting. 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 2020, and its financial performance and cash flows for the period then
ended, in accordance with IAS 34 and NZ IAS 34.
Emphasis of Matter – Material valuation uncertainty related to valuation of property
We draw your attention to note 2.1 to the interim financial statements, where the Company discloses that the independent registered valuers have
included a ‘material valuation uncertainty’ clause in their 30 June 2020 valuation reports, as a result of the COVID-19 pandemic. This clause highlights
there was reduced liquidity in the property market and a lack of transactional evidence to demonstrate market prices. Therefore, less certainty and a
higher degree of caution should be attached to the property values than would normally be the case. Our opinion is not modified in respect of this matter.
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 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
4 September 2020
INDEPENDENT REVIEW REPORT
To the shareholders of Property for Industry Limited
19

---

Property
for
Industry
Limited
Interim
Announcement
2020
SECTOR
RESILIENCE
For more information on our
interim results, please visit :
https://www.propertyforindustry.
co.nz/investor-centre/results-
centre/
HIGHLIGHTS
economic outcomes across the globe. However, like
previous pandemics, COVID-19 is also shaping large
changes to society. Across many industries there has
been an acceleration of trends that were already in
place. For example, a recent report from consultants
McKinsey highlighted that, in the United States, there
had been the equivalent of the last 10 years’ growth in
e-commerce in just the past three months.
Increased e-commerce volumes are expected to
drive additional demand for logistics space. We also
expect there to be strong demand for industrial assets
as businesses look to create more localised and resilient
supply chains.
These trends are anticipated to benefit PFI’s
long-held strategy of owning, developing and acquiring
quality industrial properties in sought-after areas.”
n
1. Funds From Operations (FFO)
and Adjusted Funds From
Operations (AFFO) are non-GAAP
financial information and are
common property investor
metrics, which have been
calculated in accordance with
the guidelines issued by the
Property Council of Australia.
THE FIRST HALF OF 2020
WILL BE REMEMBERED FOR
THE GLOBAL ONSET OF THE
COVID-19 PANDEMIC.
Whilst the course of the pandemic continues to
unfold, and its full impact will take many years to
materialise, PFI has delivered a resilient interim
result, maintaining a strong balance sheet and
portfolio metrics, and continuing to pay dividends
in line with the prior year.” says PFI Chief Executive
Officer Simon Woodhams.
COVID-19
Simon Woodhams continues: “The COVID-19
pandemic has resulted in devastating health and
STRONG
BALANCE
SHEET
PORTFOLIO
METRICS
MAINTAINED
DIVIDEND
GUIDANCE
REINSTATED
CENTS PER SHARE
RESILIENT
INTERIM RESULT
3.60
Interim profit after tax of $15.6M,
Funds From Operations (FFO)
1

earnings up 6.5% from the prior
interim period to 4.78 cents per share,
Adjusted Funds From Operations
(AFFO) earnings down 7.8%
from the prior interim period to

3.79 cents per share, H1 2020 cash
dividends of 3.60 cents per share.
7.65-7.70
CENTS PER SHARE
99.0%
OCCUPANCY OF
28.7
%
GEARING OF
Net tangible assets largely
unchanged at 204.8 cents
per share, additional bank
facility secured, almost
$130 million of available
liquidity, gearing of 28.7%
Weighted average lease term
of 5.28 years, occupancy of
99.0%, just 1.9% of contract
rent is due to expire in the
second half of 2020
Resilient results, a strong
balance sheet, continued high
levels of collection in July and
August, resulting in the
reinstatement of dividend
guidance of 7.65 to 7.70 cents
per share
DIVIDENDS OF

H1 2020 FINANCIAL PERFOMANCE
COVID-19 related support for our tenants has included
$0.7 million of abatement and $0.7 million of deferral,
a combined total of 1.6% of annual rent. This support
has been directed to our most vulnerable tenants,
as we seek to balance the health of our tenants with
our obligations to our other stakeholders.
These abatement and deferral deals resulted
in a $1.1 million decrease in net rental income when
compared to the prior interim period, but accounting
entries required as a result of those same deals resulted
in PFI recording $0.9 million of income not received,
resulting in a change to reported net rental income
of just $0.2 million. When combined with other
changes such as acquisitions and disposals, net rental
income of $41.6 million was in line with the prior
interim period ($41.0 million).
Property costs – net of recoveries from tenants –
increased by $0.9 million, including an increase in
bad and doubtful debts of $0.4 million.
Interest expense and bank fees decreased
$0.3 million or 3.5%: whilst average borrowings
increased by $6.0 million or 1.5%, the impact of this
was more than offset by a reduction in the Company’s
weighted average cost of debt
2
, down ~46 basis points
from the end of the prior year to 4.17%.
Current tax was down $1.6 million or 26%,
in part due to a higher level of maintenance capex
in the current interim period, and in part due to the
New Zealand Government reintroducing depreciation
deductions on building structure for commercial and
industrial buildings. PFI estimates that this additional
depreciation will reduce the Company’s FY 2020
current tax expense by approximately $1.85 million.
After allowing for fair value adjustments and
deferred tax, profit after tax for the interim period
totalled $15.6 million (3.14 cents per share), down from
$46.4 million (9.30 cents per share) in the prior interim
period. A $7.8 million fair value loss on investment
properties, as compared to a $23.4 million fair value
gain in the prior interim period, was the main
contributor to this reduction in profit.
n
H1 2020 FFO AND AFFO
FFO earnings of 4.78 cents per share were 0.29 cents
per share or 6.5% ahead of the prior interim period and
0.20 cents per share or 4.4% ahead of H2 2019. AFFO
earnings of 3.79 cents per share were down 0.32 cents
per share or 7.8% when compared to the prior interim
period but were up 0.11 cents per share or 3.0% when
compared to H2 2019.
AFFO adjustments for the interim period totalled
$4.9 million, up $3.0 million or 156.0% from the
prior interim period. Two key components of AFFO
adjustments were maintenance capex and the reversal
of accounting entries required as a result of COVID-19
abatement and deferral deals.
H1 2020 maintenance capex totalled $2.2 million
or 29 basis points, whereas in H1 2019 maintenance
capex totalled $0.4 million or 6 basis points. Despite
significant variances in any one period, PFI expects
that maintenance capex on its existing portfolio
will average 35 basis points per annum.
Accounting entries required as a result of
COVID-19 abatement and deferral deals resulted
in $0.8 million of AFFO earnings recorded but not
received in H1 2020. These amounts have been
adjusted out of AFFO earnings, and this adjustment
will unwind as this income is received and the
accounting entries unwind.
n
Q2 INTERIM DIVIDEND
Simon Woodhams continues: “As previously
announced, it is our current intention to continue to
pay dividends on a quarterly basis to the extent that the
Company is in a financial position to do so. The second
quarter dividend is based on the Company’s interim
performance, and during this period, FFO and AFFO
earnings were materially in line with the prior interim
period and the second half of 2019.
That being the case, the PFI Board resolved to
pay a second quarter cash dividend of 1.8000 cents
per share, in line with the dividend paid for the same
period in the prior year.”
The dividend will have imputation credits of
0.4906 cents per share attached and a supplementary
dividend of 0.2226 cents per share will be paid to
non-resident shareholders. The record date for the
dividend is 11 September 2020, and the payment date
is 22 September 2020.
As was the case with the first quarter dividend,
the dividend reinvestment scheme (DRS) will operate
with a discount of 2%. The last date for receipt of an
application for participation in the DRS is one business
day after the record date, being 14 September 2020.
Further details can be found in the DRS Offer
Document, which is available on PFI’s website.
The second quarter dividend will take cash
dividends for the first six months of 2020 to 3.60 cents
per share, in line with the prior period, resulting in an
FFO dividend pay-out ratio of 80% (H1 2019: 85%) and
an AFFO dividend pay-out ratio of 101% (H1 2019: 93%).
Given the level of volatility in AFFO adjustments,
PFI remains mindful of the AFFO dividend pay-out
ratio over a longer time horizon than any one period
when setting dividends, with the average AFFO
dividend pay-out ratio being 101.1% since PFI began
disclosing AFFO
3
in 2016. n
H2 2020 TRADING, GUIDANCE
Simon Woodhams, notes: “When we released the
2019 annual result, we advised that we expected to
pay a total cash dividend for the 2020 year of 7.65 to
7.70 cents per share. This guidance was withdrawn
on 15 April, due to the considerable uncertainty in
relation to the operating environment at that time,
Low interest rates
are contributing to a
demand for industrial
property investment
that continues to
outstrip supply.”
SIMON WOODHAMS,
Chief Executive Officer
High levels of liquidity
from a diverse range
of sources, ultra-low
interest rates and
headroom to covenant
levels provide PFI with
a strong funding
position”
CRAIG PEIRCE,
Chief Finance and
Operating Officer
2. Weighted average cost of debt comprises float interest rates, hedging,
margins and all borrowings related fees.
3. AFFO has been disclosed since the financial year ended 31 December 2016.

and the potential impact of that environment on the
Company’s earnings and dividends.
However, during the first half of 2020, FFO and
AFFO earnings were materially in line with the prior
interim period and the second half of 2019, despite a
change in the mix of factors contributing to this result,
namely, a decrease in rental income, offset by savings
in interest and tax. In addition, high levels of collection
have continued, with more than 95% of July and
August’s rent and opex collected.”
PFI Chief Finance and Operating Officer,
Craig Peirce, continues: “Given that mix of factors,
and based on the current outlook, we are pleased to
advise that we once again expect to pay a total cash
dividend for the 2020 year of 7.65 to 7.70 cents per
share, and that we expect that this level of full year
cash dividends will approximate 80% to 90% of FFO
earnings and 95% to 100% of AFFO earnings, in line
with the Company’s dividend policy. This guidance
is subject to there being no material adverse changes
in conditions or unforeseen events, including no
material tenant failures or further material
COVID-19 restrictions.”
n
BALANCE SHEET AND CAPITAL MANAGEMENT
Net tangible assets (NTA) per share at the end of the
interim period of 204.8 cents per share was largely
unchanged since the beginning of the year. A small
reduction of 0.7 cents per share or 0.3% was driven by
retained earnings (+0.6 cents per share) and material
damage insurance income (+0.5 cents per share), offset
by a decrease in the fair value of investment properties
(described below, -1.6 cents per share) and a decrease
in the fair value of derivative financial instruments
(-0.2 cents per share).
In response to the risks associated with the
COVID-19 pandemic, in March 2020 PFI secured a new
$50 million liquidity facility from the Commonwealth
Bank of Australia, New Zealand Branch (CBA). The
new 18-month facility is in addition to the bonds and
syndicated bank facility PFI already had in place.
Craig Peirce, notes: “PFI has bonds and bank
facilities drawn to a total of around $422.3 million.
The Company also has capital commitments over the
next 24 months totalling $68.8 million, which we had
planned to fund using a combination of undrawn bank
facilities and the proceeds from the divestment of
PFI’s remaining non-industrial properties, which
have a combined book value as at 30 June 2020 of
$112.3 million.
Securing this additional liquidity gives the
Company almost $130 million of undrawn
facilities, which allows us to meet our capital
commitments regardless of the progress of our
divestment programme.”
A large fall in the three-month Bank Bill Market
(BKBM or “float”) rate from 1.21% as at 31 December
2019 to 0.33% as at 30 June 2020 contributed to a
significant reduction in PFI’s weighted average cost
of debt, which decreased to 4.17% from 4.63% over
the same period. The Company will continue to take
advantage of forecasted low BKBM rates: based
on current hedging and debt levels, an average of
approximately 58% of PFI’s debt will be hedged
at an average rate of approximately 3.44% for the
second half of 2020, with the remainder on low float
interest rates.
The weighted average term to expiry of PFI’s
bonds and bank facilities stands at 3.4 years as at the
end of the interim period, and the Company ended the
half year with gearing
4
of 28.7% and an interest cover
ratio
5
of 4.1 times.
Craig Peirce concludes: “High levels of liquidity
from a diverse range of sources, ultra-low interest rates
and headroom to covenant levels provide PFI with
a strong funding position. And whilst the bank loan
market remains supportive of PFI, subject to market
conditions, we are considering options such as another
bond issue, to further extend and diversify the
Company’s borrowings.”
n
PORTFOLIO PERFORMANCE
Full valuations of 14 properties were completed during
the interim period, and an independent desktop review
was completed on the remainder of the portfolio. As a
result of portfolio and valuation activity, a total write
down of $7.8 million or 0.5% was recorded, and PFI’s
passing yield is now 5.74% (5.84% at the end of 2019).
An independent market rental assessment of the
entire portfolio was completed as part of the valuation
process, this assessment estimates that PFI’s portfolio
is ~3.5% under-rented.
Simon Woodhams notes: “Low interest rates
are contributing to a demand for industrial property
investment that continues to outstrip supply. Recent
sales of prime industrial property have been completed
at yields as low as, and in some cases even lower,
than pre-pandemic levels. This has resulted in stable
industrial property prices, as evidenced by the results
of the Company’s interim valuation process.”
Nearly 31,000 square metres, representing around
5% of PFI’s existing portfolio by rent, was leased during
the interim period to 11 new and existing tenants for
an average increase in term of 6.4 years. Lease renewals
accounted for more than 81% of the contract rent
secured. 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.
Leasing demand for PFI’s properties remains
robust, with transactions totalling more than
$4.6 million either secured, or in advanced stages
of negotiation, since the end of the interim period.
Vacancy is still at historically low levels: CBRE report
4. That is, total borrowings as a percentage of the most recent independent
valuation of the property portfolio. Covenant: 50%.
5. That is, the ratio of interest expense and bank fees to operating earnings
excluding interest expense and bank fees. Covenant: 2 times.
THINGS YOU
SHOULD KNOW
ABOUT OUR
PORTFOLIO
PERFORMANCE:
BOOK VALUE
$/M
1,470
JUN 2020
JUN 2019
1,368.3
DEC 2019
1,476.2
NO. OF
PROPERTIES
93
JUN 2020
JUN 2019
94
DEC 2019
94
NO. OF
TENANTS
140
JUN 2020
JUN 2019
147
DEC 2019
144
CONTRACT
RENT $/M
83.6
JUN 2020
JUN 2019
83.1
DEC 2019
84.9
OCCUPANCY %
99.0
JUN 2020
JUN 2019
99.7
DEC 2019
99.0
WEIGHTED AV.
LEASE TERM YEARS
5.28
JUN 2020
JUN 2019
5.71
DEC 2019
5.38
AUCKLAND
PROPERTY
84.2%
JUN 2020
JUN 2019
83.8%
DEC 2019
84.1%
INDUSTRIAL
PROPERTY
91.0%
JUN 2020
JUN 2019
87.4%
DEC 2019
90.0%

in their August 2020 Market Flash that Auckland
Prime industrial vacancy is just 1.2%, with Secondary
industrial vacancy at 1.5%. Notwithstanding these low
levels of vacancy, market levels of incentive have
begun to trend up, as landlords – including PFI – focus
on securing strong tenant covenants, guarantees and
long lease terms to ensure the security of cash flows.
Rent reviews were completed on 53 leases during
the interim period, resulting in an average annual
uplift of ~4.1% on ~$22.5 million of contract rent.
5 market rent reviews on $1.2 million of contract rent
delivered an annualised increase of 7.1% over an
average review period of 2.4 years, and these reviews
were settled at an average of approximately 2.6%
above December 2019 market rental assessments.
At the end of the interim period, the Company’s
portfolio was 99.0% occupied and just 1.9% of contract
rent is due to expire in the second half of 2020. When
combined with rent reviews, around 44% of PFI’s
portfolio is subject to some form of lease event during
the second half of 2020.
n
MARKET UPDATE
The New Zealand economy has been able to return
to something closer to normal than many other
countries, but the outlook is a challenging one. In their
July 2020 Quarterly Economic Outlook, ANZ note
that: “Households and businesses are cautious, and
unemployment is rising. Investment and spending
will be weaker, with policy providing an important
but only partial offset. Despite our enviable position,
the slowdown will be large and the recovery slow.”
Given these conditions, in July ANZ forecast
for 2020 and 2021 to end with an Official Cash Rate
(OCR) of just 0.25% (January 2020 forecast: 1.00%),
with forecast 10-year Government Bond Rates of
1.00% and 1.25% (January 2020 forecast: 1.30%
and 1.20%) respectively, despite the large increase
in Government debt. Their view was updated
mid-August, and they now forecast an OCR of
-0.25% in April 2021.
In their August 2020 “Auckland Market Outlook
– Industrial Sector Preview”, CBRE predict that the
outlook for Auckland vacancy and yields has improved
since December 2019.
Prime vacancy is forecast to reach just 1.1% at
the end of their five-year forecast period (was 1.4%),
and Secondary vacancy is expected to behave in
a similar manner, reaching 1.7% at the end of the
five-year forecast (was 2.1%). Prime yields are forecast
to reach 4.74% (was 4.90%), with Secondary yields
expected to contract to 5.65% (was 5.80%).
Their outlook on rental growth over the next
five years has softened a little, averaging 2.1%
per annum for Prime properties (was 2.5%) and
1.6% per annum for Secondary properties (was
3.0%). CBRE note that their softer outlook for
rents is as a result of more generous incentives
being offered to prospective tenants.
n
“PFI has successfully balanced yield and growth
over many years by sticking to their core strategy.
That takes discipline,” says Dean Bracewell,
who joined the PFI Board as an Independent
Director last year. “The Company has performed
consistently because it has kept the expectations
of stakeholders front of mind and applied
the meeting of their needs objectively in its
decision making.”
Bracewell says that his own experience fuses with
the core business of PFI in several ways. “I have worked
for many years in industrial New Zealand and in service
industries, run a publicly listed company with strong
long-term goals and undertaken a range of property
transactions. So I have an understanding of what
customers will be looking for from PFI, I understand
what investors will be looking for and I’m very aware,
as we all are today, of the importance of bringing all
stakeholders along with us.”
PFI’s track record speaks for itself, says Bracewell.
The Company has used its specialist focus to build
sustainable earnings and bolster its balance sheet. It is
well positioned to take up the challenges of delivering
an acceptable yield whilst managing profitable growth in
an extraordinary trading environment. “This tension is not
unique to PFI, but I’m confident, given the skills that I see
around me in the Board and the Management Team, that
the Company will capably navigate what’s ahead.
“Environmental, Governance and Social factors
have re-set the expectations for boards today.
Publicly listed companies are under greater scrutiny
and directors need deep and broad knowledge of
the intricacies of decisions. Having worked on a
number of boards, with different governance styles,
under both Australian and New Zealand ownership,
I’m confident PFI has the collective talent and
experience needed to do right by our customers,
investors and other stakeholders.”
Dean Bracewell was Managing Director of
Freightways from 1999 to 2017. Under his leadership,
the company grew to have a market capitalisation of
$1.2 billion. He is currently on the boards of Tainui Group
Holdings and Air New Zealand, the Executive Board of
the Halberg Foundation and involved in an advisory role
to the Ministry of Transport.
n
The company has
performed consistently
because it has kept
the expectations of
stakeholders front

of mind.”
DEAN BRACEWELL,
Independent Director

ON
STAKEHOLDER
NEEDS
FOCUSED

OUR PRIORITIES
“In recent years, we have made significant progress
on our pathway to becoming a pure-play industrial
listed property vehicle. The COVID-19 pandemic has
created fresh challenges for us to navigate, and we
have responded accordingly” noted Simon Woodhams.
“For example, we had planned to dispose of
PFI’s remaining non-industrial properties, including
Carlaw Park, but we put these plans on hold while
we waited for less volatile conditions. We now
expect to bring this asset to market late 2020.
And whilst we have continued to build out three
value-add projects, we have put the $8.1 million
speculative project at 47 Dalgety Drive on hold, while
we work to secure tenant commitment at some of our
other speculative projects, like 59 Dalgety Drive and
Lot 1, Tidal Road.” More details on the 59 Dalgety
Drive project can be found in this newsletter.
“We have continued to target acquiring quality
industrial properties in sought-after areas but did not
transact in the first half of 2020. Target acquisition
parameters include an increased Auckland weighting
from 84.2%, improving the property and tenancy
fundamentals of PFI’s portfolio, and decreasing
the average age of PFI’s portfolio.
Environmental, Social and Governance
factors have remained front of mind, and in
March we welcomed Sarah Beale to the PFI
team as our Sustainability, Risk and Compliance
Manager. Sarah has been deepening the work
already completed with external consultants,
with a particular focus on health, safety and
wellbeing, emissions, and climate risk.”
n
CLOSING
Simon Woodhams concludes: “PFI has delivered a
resilient interim result despite a period of significant
volatility and uncertainty. These results not only
reflect our ownership of the right industrial
properties, in the right locations, filled with quality
tenants, managed by an experienced and dedicated
team, they also reflect our conservative gearing and
dividend pay-out ratios.
In recent years, we have kept our gearing low,
accepting that low gearing results in slightly lower
returns in the good times, but knowing that low
gearing will serve us well in times of crisis. And we
have worked hard to ensure that our dividends reflect
what we earn, so we don’t increase our gearing by
paying out more than that which we have earned
from our tenants.
Looking forward, strong demand for industrial
space due to increased e-commerce volumes and
businesses looking to create more localised and
resilient supply chains are trends that are anticipated
to benefit PFI’s long-held strategy of owning,
developing and acquiring quality industrial
properties in sought-after areas.
Despite the current challenging times,
we believe PFI is well placed to respond to these
latest challenges, and indeed any opportunities
that may arise from them.”
n
CASE STUDY

Property for Industry Limited
Shed 24, Prince’s Wharf,
147 Quay Street, Auckland 1010
PO Box 1147, Shortland Street,
Auckland 1140
T 09 303 9450
E info@propertyforindustry.co.nz
www.propertyforindustry.co.nz
“New Zealand businesses are looking for
properties that are capable of meeting their
long-term needs. Creating these quality
assets sometimes requires looking beyond
what is currently there, to the longer term
opportunities that a site presents,” says
Ewan Cameron, PFI Portfolio Manager.
The buildings at 59 Dalgety Drive were originally
purpose built to accommodate food grade production.
The specialist fit out comprised refrigerated storage,
raised cart docks and food grade manufacturing.
“The site was well designed for a specific type
of activity,” says Ewan Cameron, “but most of the
specialist fit out had been decommissioned for
some time now. In February of this year the site
was handed back to us at the end of the lease.”
Direct Property Fund, who merged with PFI
in 2013, acquired this Wiri property in 2008 with
a 12-year lease. The property is currently being
extensively remodelled into a modern warehouse
that will suit large-scale operators looking for room
to expand in this prime Auckland industrial location.
The large rectangular 2.15ha flat site offers
excellent access to Wiri’s Dalgety Drive. The specialist
fit out is being systematically removed to provide
an open plan 7,000 sqm generic warehouse. Two
new canopies installed along the West and North
warehouse walls will provide multiple loading options,
with each canopy housing four new wide roller doors.
Surplus land at the rear of the site will, in the
first instance, be converted to useable yard, offering
DALGETY DRIVE,
WIRI
59
2,500 sqm of container storage and heavy vehicle
manoeuvring, with the option to convert this area
into new warehousing in the future. This extended
yard will also allow for full drive-round access.
The office area will be refurbished as a generic
open plan layout.
“The core elements of this property were right,”
says Ewan Cameron. “Maximising the potential
of this investment started with recognising all
the advantages that were inherent in the site.
Transforming this specialised site into a versatile
property that could meet a wide range of needs
was about seeing what must stay and which parts
of the site could be redesigned and reallocated.”
The 12-month design, demolition, build and
refurbishment program will deliver a modern,
versatile warehouse. The availability of this larger
asset, its location and key operational features are
already attracting a high level of interest, and heads
of terms have been signed with a supply chain and
logistics operator.
PFI looks to deliver shareholders strong, stable
returns by investing in quality industrial property.
Simon Woodhams concludes: “59 Dalgety Drive is
another example of how PFI looks past the existing
fit out and configuration of a property to see the
broader benefits and long term potential of a site.
This is a building that others might have seen as too
bespoke, whereas we have been able to reconfigure
the property to deliver a quality warehouse designed
to meet the needs of today’s occupiers.”
n
GETTING
READY
FOR
A
NEW
LIFE

---

NZX and media
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—
4 September | 2020

Page 1

RESILIENT INTERIM RESULT, DIVIDEND
GUIDANCE REINSTATED
The PFI management team will present the results via live webcast from 10am NZT on 4 September
2020. To view and listen to the webcast, please visit https://edge.media-server.com/mmc/p/pjszu67e.
There has been a large increase in teleconference bookings because of the COVID-19 pandemic.
Therefore, anyone wishing to participate in the webcast (for example, to ask a question) must pre-
register for the conference call at http://apac.directeventreg.com/registration/event/2466573. Upon
registering, participants will be provided with participant dial-in numbers, a passcode, and a unique
registrant ID. In the 10 minutes prior to the call start time, you will need to use the conference access
information provided in the email received at the point of registering, in addition to opening the webcast
(using the details above).

Highlights
▪ Resilient interim result: interim profit after tax of $15.6 million, Funds From Operations (FFO)
1

earnings up 6.5% from the prior interim period to 4.78 cents per share, Adjusted Funds From
Operations (AFFO) earnings down 7.8% from the prior interim period to 3.79 cents per share, H1
2020 cash dividends of 3.60 cents per share
▪ Strong balance sheet: net tangible assets largely unchanged at 204.8 cents per share, additional
bank facility secured, almost $130 million of available liquidity, gearing of 28.7%
▪ Portfolio metrics maintained: weighted average lease term of 5.28 years, occupancy of 99.0%,
just 1.9% of contract rent is due to expire in the second half of 2020
▪ Dividend guidance reinstated: resilient results, a strong balance sheet, continued high levels of
collection in July and August, resulting in the reinstatement of dividend guidance of 7.65 to 7.70
cents per share

Property for Industry Limited (PFI, the Company) today announced resilient results for the six months
ended 30 June 2020.

“The first half of 2020 will be remembered for the global onset of the COVID-19 pandemic. Whilst the
course of the pandemic continues to unfold, and its full impact will take many years to materialise, PFI
has delivered a resilient interim result, maintaining a strong balance sheet and portfolio metrics, and
continuing to pay dividends in line with the prior year.” says PFI Chief Executive Officer Simon
Woodhams.

Resilient interim result
Profit after tax for the interim period totalled $15.6 million (3.14 cents per share), down from $46.4 million
(9.30 cents per share) in the prior interim period. A $7.8 million fair value loss on investment properties,
as compared to a $23.4 million fair value gain in the prior interim period, was the main contributor to this
reduction in profit.

FFO earnings of 4.78 cents per share were 0.29 cents per share or 6.5% ahead of the prior interim
period and 0.20 cents per share or 4.4% ahead of H2 2019. AFFO earnings of 3.79 cents per share
were down 0.32 cents per share or 7.8% when compared to the prior interim period but were up 0.11
cents per share or 3.0% when compared to H2 2019.

--------

1
Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) are non-GAAP financial information and are
common property 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.

NZX and media
announcement
—
4 September | 2020

Page 2

Simon Woodhams continues: “As previously announced, it is our current intention to continue to pay
dividends on a quarterly basis to the extent that the Company is in a financial position to do so. The
second quarter dividend is based on the Company’s interim performance, and during this period, FFO
and AFFO earnings were materially in line with the prior interim period and the second half of 2019.

That being the case, the PFI Board resolved to pay a second quarter cash dividend of 1.8000 cents per
share, in line with the dividend paid for the same period in the prior year.”

The dividend will have imputation credits of 0.4906 cents per share attached and a supplementary
dividend of 0.2226 cents per share will be paid to non-resident shareholders. The record date for the
dividend is 11 September 2020, and the payment date is 22 September 2020.

As was the case with the first quarter dividend, the dividend reinvestment scheme (DRS) will operate
with a discount of 2%. The last date for receipt of an application for participation in the DRS is one
business day after the record date, being 14 September 2020. If you have previously completed an
application to participate in the DRS, you do not need to do anything further. You will receive shares
instead of cash, in accordance with your application. If you wish to change your previous participation,
you will need to complete a new application.

Further details can be found in the DRS Offer Document, which is available on PFI’s website:
https://www.propertyforindustry.co.nz/investor-centre/dividend-information/dividend-reinvestment/.

The second quarter dividend will take cash dividends for the first six months of 2020 to 3.60 cents per
share, in line with the prior period, resulting in an FFO dividend pay-out ratio of 80% (H1 2019: 85%)
and an AFFO dividend pay-out ratio of 101% (H1 2019: 93%, refer Appendix 3).

Given the level of volatility in AFFO adjustments, PFI remains mindful of the AFFO dividend pay-out ratio
over a longer time horizon than any one period when setting dividends, with the average AFFO dividend
pay-out ratio being 101.1% since PFI began disclosing AFFO
2
in 2016 (refer Appendix 4).

Strong balance sheet
Net tangible assets (NTA) per share at the end of the interim period of 204.8 cents per share was largely
unchanged since the beginning of the year.

In response to the risks associated with the COVID-19 pandemic, in March 2020 PFI secured a new $50
million liquidity facility from the Commonwealth Bank of Australia, New Zealand Branch (CBA). The new
18-month facility is in addition to the bonds and syndicated bank facility PFI already had in place.

PFI Chief Finance and Operating Officer, Craig Peirce, notes: “Securing this additional liquidity gives the
Company almost $130 million of undrawn facilities, which allows us to meet our capital commitments
regardless of the progress of our divestment programme.”

The weighted average term to expiry of PFI’s bonds and bank facilities stands at 3.4 years as at the end
of the interim period, and the Company ended the half year with gearing
3
of 28.7% and an interest cover
ratio
4
of 4.1 times.

Craig Peirce concludes: “High levels of liquidity from a diverse range of sources, ultra-low interest rates
and headroom to covenant levels provide PFI with a strong funding position. And whilst the bank loan
--------

2
AFFO has been disclosed since the financial year ended 31 December 2016.
3
That is, total borrowings as a percentage of the most recent independent valuation of the property portfolio. Covenant: 50%.
4
That is, the ratio of interest expense and bank fees to operating earnings excluding interest expense and bank fees. Covenant:
2 times.

NZX and media
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4 September | 2020

Page 3

market remains supportive of PFI, subject to market conditions, we are considering options such as
another bond issue, to further extend and diversify the Company’s borrowings.”

Portfolio metrics maintained
Portfolio snapshot as at 30 June 2020 31 December 2019 30 June 2019
Book value $1,470.0m $1,476.2m $1,368.3m
Number of properties 93 94 94
Number of tenants 140 144 147
Contract rent $83.6m $84.9m $83.1m
Occupancy 99.0% 99.0% 99.7%
Weighted average lease
term
5.28 years 5.38 years 5.71 years
Auckland property 84.2% 84.1% 83.8%
Industrial property 91.0% 90.0% 87.4%

Full valuations of 14 properties were completed during the interim period, and an independent desktop
review was completed on the remainder of the portfolio. As a result of portfolio and valuation activity, a
total write down of $7.8 million or 0.5% was recorded, and PFI’s passing yield is now 5.74% (5.84% at
the end of 2019). An independent market rental assessment of the entire portfolio was completed as
part of the valuation process, this assessment estimates that PFI’s portfolio is ~3.5% under-rented.

Nearly 31,000 square metres, representing around 5% of PFI’s existing portfolio by rent, was leased
during the interim period to 11 new and existing tenants for an average increase in term of 6.4 years.
Lease renewals accounted for more than 81% of the contract rent secured. 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.

Leasing demand for PFI’s properties remains robust, with transactions totalling more than $5.1 million
either secured, or in advanced stages of negotiation, since the end of the interim period. Vacancy is still
at historically low levels: CBRE report in their August 2020 Market Flash that Auckland Prime industrial
vacancy is just 1.2%, with Secondary industrial vacancy at 1.5%. Notwithstanding these low levels of
vacancy, market levels of incentive have begun to trend up, as landlords – including PFI – focus on
securing strong tenant covenants, guarantees and long lease terms to ensure the security of cash flows.

Rent reviews were completed on 53 leases during the interim period, resulting in an average annual
uplift of ~4.1% on ~$22.5 million of contract rent. 5 market rent reviews on $1.2 million of contract rent
delivered an annualised increase of 7.1% over an average review period of 2.4 years, and these reviews
were settled at an average of approximately 2.6% above December 2019 market rental assessments.

At the end of the interim period, the Company’s portfolio was 99.0% occupied and just 1.9% of contract
rent is due to expire in the second half of 2020. When combined with rent reviews, around 44% of PFI’s
portfolio is subject to some form of lease event during the second half of 2020.

Dividend guidance reinstated
Simon Woodhams, notes: “When we released the 2019 annual result, we advised that we expected to
pay a total cash dividend for the 2020 year of 7.65 to 7.70 cents per share. This guidance was withdrawn
on 15 April, due to the considerable uncertainty in relation to the operating environment at that time, and
the potential impact of that environment on the Company’s earnings and dividends.

However, during the first half of 2020, FFO and AFFO earnings were materially in line with the prior
interim period and the second half of 2019, despite a change in the mix of factors contributing to this

NZX and media
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4 September | 2020

Page 4

result, namely, a decrease in rental income, offset by savings in interest and tax. In addition, high levels
of collection have continued, with more than 95% of July and August’s rent and opex collected.”

PFI Chief Finance and Operating Officer, Craig Peirce, continues: “Given that mix of factors, and based
on the current outlook, we are pleased to advise that we once again expect to pay a total cash dividend
for the 2020 year of 7.65 to 7.70 cents per share, and that we expect that this level of full year cash
dividends will approximate 80% to 90% of FFO earnings and 95% to 100% of AFFO earnings, in line
with the Company’s dividend policy. This guidance is subject to there being no material adverse changes
in conditions or unforeseen events, including no material tenant failures or further material COVID-19
restrictions.”

Closing
Simon Woodhams concludes: “PFI has delivered a resilient interim result despite a period of significant
volatility and uncertainty. These results not only reflect our ownership of the right industrial properties,
in the right locations, filled with quality tenants, managed by an experienced and dedicated team, they
also reflect our conservative gearing and dividend pay-out ratios.

Looking forward, strong demand for industrial space due to increased e-commerce volumes and
businesses looking to create more localised and resilient supply chains are trends that are anticipated
to benefit PFI’s long-held strategy of owning, developing and acquiring quality industrial properties in
sought-after areas.

Despite the current challenging times, we believe PFI is well placed to respond to these latest
challenges, and indeed any opportunities that may arise from them.”

ENDS

ABOUT PFI & CONTACT

PFI is an NZX listed property vehicle specialising in industrial property. PFI’s nationwide portfolio of 93 properties is leased to
140 tenants.

For further information please contact:

SIMON WOODHAMS CRAIG PEIRCE
Chief Executive Officer Chief Finance and Operating Officer
--- ---
Phone: +64 21 749 770 Phone: +64 21 248 6301
Email: woodhams@propertyforindustry.co.nz Email: peirce@propertyforindustry.co.nz
---
Property for Industry Limited
Shed 24, Prince’s Wharf, 147 Quay Street, Auckland 1010
PO Box 1147, Shortland Street, Auckland 1140
---
www.propertyforindustry.co.nz

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

NZX and media
announcement
—
4 September | 2020

Page 5

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 2020 30 June 2019
Profit and total comprehensive income after income
tax attributable to the shareholders of the Company
15,648 46,398
Adjusted for:
Fair value loss / (gain) on investment properties 7,803 (23,449)
Material damage insurance income (2,151) -
Loss on disposal of investment properties 14 57
Fair value loss / (gain) on derivative financial instruments 1,023 (1,297)
Amortisation of tenant incentives 1,374 1,297
Straight lining of fixed rental increases (999) (717)
Deferred taxation 1,133 127
Other 3 -
Funds From Operations (FFO) 23,848 22,416
FFO per share (cents) 4.78 4.49
Maintenance capex (2,169) (374)
Incentives and leasing fees given for the period (1,985) (1,556)
Other (incl. reversal of accounting entries for COVID-19 abatement
and deferral deals)
(785) -
Adjusted Funds From Operations (AFFO) 18,909 20,486
AFFO per share (cents) 3.79 4.11

Appendix 2 – FFO and AFFO Compared to H1 2020 and H2 2019

FFO (CPS) Change AFFO (CPS) Change
H1 2019 4.49 +0.29 CPS or
+6.5%
4.11 -0.32 CPS or
-7.8%
H1 2020 4.78 3.79

FFO (CPS) Change AFFO (CPS) Change
H2 2019 4.58 +0.20 CPS or
+4.4%
3.68 +0.11 CPS or
+3.0%
H1 2020 4.78 3.79

Appendix 3 – FFO and AFFO Dividend Pay-out Ratios

2020 2019
Full year dividends per share
(cents, 2020 = mid-point of guidance, 2019 = actuals)
7.68 7.60
Pro-rata share of full year dividends per share
(cents, 2020 = 50% of mid-point of guidance, 2019 = 50% of actuals)
3.84 3.80
FFO dividend pay-out ratio (%) 80% 85%
AFFO dividend pay-out ratio (%) 101% 93%

NZX and media
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4 September | 2020

Page 6

Appendix 4 – AFFO Pay-out Ratios (2016 – 2020 H1)

Year AFFO per share (cents) Full year dividends per
share (cents)
Pay-out ratio (%)
2016 6.95 7.35 105.8%
2017 7.49 7.45 99.5%
2018 7.46 7.55 101.2%
2019 7.79 7.60 97.6%
2020 H1 * 3.79 3.84 101.3%
Total 33.48 33.79 101.1%

* 2020 H1 dividend represents 50% of full year dividends, based on the mid-point of guidance.

Details of Interim Results Webcast Dividend Reinvestment Scheme Share Price Determined

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.

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