Precinct Internalisation Agreement

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand PO Box 2, Wellington 6140, New Zealand
NZX announcement – 29 March 2021
Precinct Internalisation Agreement
The Independent Directors of Precinct Properties New Zealand Limited (“Precinct”) (NZX: PCT)
are pleased to announce today that they have reached an agreement with the Manager,
AMP Haumi Management Limited (“AHML”), to terminate the Management Services
Agreement and internalise the management of Precinct.
The transaction is expected to provide cost savings of $14.6 million per annum and be 6.0%
1

accretive to adjusted funds from operations (AFFO) per share on a pro forma basis which
assumes that current development projects are complete. Importantly, Precinct will retain key
management personnel and the transaction positions Precinct to deliver on the next phase
of its strategy.
Craig Stobo, Independent Chairman of Precinct said “Since listing in 1997 Precinct has
continued to evolve through a changing market, to become one of New Zealand’s leading
listed property businesses today. AHML has helped create significant shareholder value for
Precinct shareholders as we have transformed the quality of this business over the past 10
years. The shareholders of AHML have a global perspective of real estate markets and their
influence is evident in the successful completion of over $1.5bn in developments in that time.
We are delighted that we have been able to agree terms with AHML to internalise the
management of Precinct.
The independent directors believe that internalisation will best position Precinct for future
growth and is an appropriate progression considering the scale and breadth of Precinct’s
business. The internalisation will ensure the retention of key staff, the continuity of Precinct’s
successful strategy and ongoing stable shareholder returns.”
Key terms of the transaction include:
• A gross payment from Precinct to AHML of $215m.
• As a result of this transaction, $10m of fees on current development projects are no
longer required to be paid.

1
Assuming the net cost to Precinct of $145m is funded via debt. Accretion of 3.3% based on PCT’s
WACC.

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand PO Box 2, Wellington 6140, New Zealand
• Precinct will apply for a binding ruling from the IRD to confirm the termination payment
is deductible for income tax purposes.
• The net cost to Precinct is expected to be $145m.
• Scott Pritchard, George Crawford and Richard Hilder have been retained as CEO,
Deputy CEO and CFO respectively under new employment agreements with Precinct.
• All other employees of the Manager have entered into new employment contracts
with Precinct.
• The Board will remain unchanged through the transition, which includes Mohammed
Alnuaimi who will retain his board seat as a representative of Precinct’s largest
shareholder who maintain their 17.3% stake. Chris Judd and Rob Campbell will be non-
executive directors, and eligible for election at the 2021 annual meeting of
shareholders.
• Settlement will occur on 31 March 2021.
In September 2020, the Independent Directors formed a sub-committee to assess the
potential for internalisation.
As Independent Directors needed to act quickly and with certainty given competing interest,
and to ensure Precinct was able to secure all the benefits of internalising management, an
NZX waiver was obtained so that the transaction did not require a shareholder vote.
Specialist advice from PwC corporate finance, Chapman Tripp and KPMG tax was obtained
in assisting with due diligence and negotiating the transaction. PwC advised that the present
value of the benefits to Precinct of terminating the Management Services Agreement are
estimated to significantly exceed the after-tax cost of terminating the agreement.
The termination payment will be funded through a new $250 million 5-year bank facility and
will result in an increase in total drawn borrowings initially of $215 million, and a post-
transaction gearing ratio of 31.1% based on the net cost to Precinct.
Further information will be presented today by webcast at 10:00am.
Webcast link: Link


Ends

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand PO Box 2, Wellington 6140, New Zealand
For further information, please contact:
Craig Stobo
Chairman and Independent Director
Mobile: +64 21 733 751

About Precinct (PCT)
Precinct is New Zealand’s only listed city centre specialist investing predominately in premium
and A-grade commercial office property. Listed on the NZX Main Board, PCT currently owns
Auckland’s HSBC Tower, AMP Centre, ANZ Centre (50%), Jarden House, 1 Queen Street, Mason
Bros. Building, 12 Madden Street, 10 Madden Street and Commercial Bay; and Wellington’s
AON Centre, NTT Tower, No. 1 and No. 3 The Terrace, Mayfair House and Bowen Campus.
Precinct owns Generator NZ, New Zealand’s premier flexible office space provider. Generator
currently offers 13,600 square metres of space across four locations in Auckland.

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PRECINCT PROPERTIES, ANNUAL RESULTS PRESENTATION -Page 1
Precinct Properties
Internalisation

PRECINCT PROPERTIES -PAGE 2
Internalisation overview
•The Independent Directors of Precinct Properties New Zealand Limited (“Precinct”) are
pleased to announce today that they have reached an agreement with the
Manager, AMP Haumi Management Limited (“AHML”), to internalise the management
of Precinct
•The agreement includes a gross payment of $215m from Precinct to AHML as
consideration for the termination of its Management Services Agreement and the
acquisition of certain assets and liabilities
•As a result of the agreement $10m of fees on current development projects will not be
paid
•Precinct will apply for a binding ruling from the IRD to confirm the termination payment
is deductible for income tax purposes
•The net cost to Precinct is expected to be $145 million
•Importantly, Precinct’s key management personnel have been retained, and the
internalisation positions Precinct to deliver on the next phase of its strategy
On a pro forma basis, the internalisation is expected to provide cost savings of $14.6
million
1
per annum and be 6.0%
2
accretive to AFFO per share
1
Refer to appendix
2
Assuming the net cost to Precinct of $145m is funded via debt. Accretion of 3.3% based on PCT’s WACC

PRECINCT PROPERTIES -PAGE 3
Background
•AMP NZ Office Trust was listed in 1997 following the sale of AMP owned
office assets to create AMP NZ Office Trust
•In 2010, AMP NZ Office Trust (now Precinct) was corporatised and entered
into a Management Services Agreement with AMP Haumi Management Ltd
(AHML)
•AMP has played a significant and beneficial role in the origination, listing
and ongoing management of Precinct
•Precinct has evolved from a $0.5b office based investment fund to a $3.5b
(pro forma) real estate investment company focused on city centre real
estate
•Over the past 10 years, Precinct has completely transformed its business
through the successful completion of over $1.5b in developments of prime
grade real estate
•AHML’s role in managing this transformation has been significant and
Precinct shareholders have benefitted from their world class expertise

PRECINCT PROPERTIES -PAGE 4
$1.5 b of premium grade
developments
completed
PCT Transformation
20102020
Size$1.27 b$3.0 b
Age26 yrs12 yrs
Maint. Capex0.60-0.80% p.a0.20% p.a
AKL Weighting47%73%
QualityA-gradePremium
WALT4.3 yrs7.7 yrs
AFFO and Dividend per share growthPortfolio transformation
NTA growth
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
2014201520162017201820192020
4.00 cps
4.50 cps
5.00 cps
5.50 cps
6.00 cps
6.50 cps
7.00 cps
201620172018201920202021F
Adjusted funds from operationsDividend (cps)
+20%

PRECINCT PROPERTIES -PAGE 5
Internalisation approach
•In September 2020, Precinct established a sub-committee of Independent Directors to assess
the potential for internalisation.
•The Independent Directors determined that the most optimal outcome was to internalise the
management of Precinct.
•As Independent Directors needed to act quickly and with certainty given competing
interest, and to ensure Precinct was able to secure all the benefits of internalising
management, an NZX waiver was obtained so that the transaction did not require a
shareholder vote.
•Specialist advisers (PwC corporate finance, Chapman Tripp and KPMG tax) supported and
informed the due diligence and negotiations of the internalisation with AHML.
•PwC advised the present value of the benefits of termination are estimated to significantly
exceed the after-tax cost.
•Negotiations concluded with an agreement to terminate the Management Services
Agreement and acquire the assets and liabilities of AHML.
•The Independent Directors unanimously support the internalisation and believe that it is in
the best interests of, and fair and reasonable to, Precinct and shareholders not associated
with AHML.

PRECINCT PROPERTIES -PAGE 6
Key terms of the
internalisation
•Gross payment from Precinct to AHML of $215m.
•$10m of fees on current development projects will no longer be paid.
•Precinct will apply for a binding ruling from the IRD to confirm that the
termination payment is deductible for income tax purposes.
•The net cost to Precinct is expected to be $145m.
•Scott Pritchard, George Crawford and Richard Hilder have been
retained as CEO, Deputy CEO and CFOrespectively under new
employment agreements with Precinct.
•All other employees of the Manager have entered into new
employment contracts with Precinct.
•The Board will remain unchanged through the transition, which
includes Mohammed Alnuaimi who will retain his board seat as a
representative of Precinct’s largest shareholder who maintain their
17.3% stake. Chris Judd and Rob Campbell will be non-executive
directors, and eligible for election at the 2021 annual meeting of
shareholders.
•Settlement will occuron 31 March 2021

PRECINCT PROPERTIES -PAGE 7
Benefits of internalisation
The internalisation is expected to provide significant
benefits to Precinct and its shareholders
•On a pro forma basis, pre-tax gross cash savings of approximately $14.6
million
1
per annum in total management fees net of costs
•MER reduces from 0.74% to 0.31%
•Pro forma accretion to adjusted funds from operations (earnings) of 6.0%
per share against Precinct’s cost of debt (3.3% against WACC)
•Pro forma accretion is expected to be fully realised once Bowen
Campus and 1 Queen St projects are completed and income
producing
•Enable the smooth transition of management and staff to Precinct,
where management capability and knowledge will be retained for the
benefit of shareholders
•Increased alignment of interests between management and
shareholders, with management accountable to the Precinct board and
with incentives aligned with Precinct’s performance
•Removal of uncertainty, where Precinct could be negatively impacted
through a change of control of the Manager or Management
Agreement (over which Precinct currently has very limited control)
•All directors will be appointed at the direction of Shareholders (whereas
the Manager previously appointed two directors to the board)
$14.6m
annual cash
savings
In total management fees
net of costs
6.0%
accretion
in pro forma adjusted
funds from operations
(earnings)
1
Refer to appendix

PRECINCT PROPERTIES -PAGE 8
Funding
•Internalisation to be debt funded through a new 5-year $250 million bank
facility
•The new facility will increase bank debt to $860 million out of a total facility
pool of $1.45 billion
•Expected settlement for ANZ Centre remains on track for April 2021
•As previously outlined, Precinct is investigating the sale of further non-core
assets (c.$90m)
•Assuming the sale of non-core assets, and after the internalisation, the
balance sheet has capacity to fund 1 Queen Street which is anticipated to
now proceed within the next three months
•Post funding of the internalisation, commitment to 1 Queen St and the sale
of a non-core asset, committed gearing will be ~36%

PRECINCT PROPERTIES -PAGE 9
Summary
•The internalisation is expected to provide significant benefits to Precinct and its shareholders
•Management alignment
•Removal of uncertainty
•Net cost to Precinct of internalisation is expected to be $145 million
1
•On a pro forma basis, the internalisation is expected to provide cost savings of $14.6 million
per annum and be 6.0% accretive to AFFO per share
•Key management personnel have been retained, and the internalisation positions Precinct
to deliver on the next phase of its strategy
•FY21 dividend guidance unchanged at 6.50 cps
Further information on Precinct is available at www.precinct.co.nz
1
The tax deductibility of the termination payment of the management contract remains subject to a binding ruling from the IRD

Appendices

PRECINCT PROPERTIES -PAGE 11
Analysis of pro forma impacts
Pro forma Portfolio size$3.5 b
Assumes completion of committed
projects, 1 Queen St and the sale of a
non-core asset
Management fee$14.8 m
MSA 0.55% up to $1bn, 0.45% between
$1-1.5bn and 0.35% greater than $1.5bn
Performance fee$1.5 m10-year annual average paid
Leasing fees$3.2 m10-year annual average paid
Development Management fees$4.0 m
Based on $100m of development per
annum.
10 year average paid equal to $4.4m
Acquisition and disposal fees$0.5 m
Assumes 3% per annum portfolio turnover
with fees paid to Manager half the time
10 year average paid equal to $0.5m
Retail & Generator Management fees$1.4 mMSA current agreed cost
Recoverable staff cost$4.8 mCurrent cost
Total$30.2 m0.74% MER (ex recoverable costs)
Internal Cost($15.6 m)0.31% MER (ex recoverable costs)
Pro forma cash cost saving$14.6 m

PRECINCT PROPERTIES -PAGE 12
Disclaimer
TheinformationandopinionsinthispresentationwerepreparedbyPrecinctPropertiesNewZealand
Limitedoroneofitssubsidiaries(Precinct).
Precinctmakesnorepresentationorwarrantyastotheaccuracyorcompletenessoftheinformation
inthispresentation.
Opinionsincludingestimatesandprojectionsinthispresentationconstitutethecurrentjudgmentof
Precinctasatthedateofthispresentationandaresubjecttochangewithoutnotice.Suchopinions
arenotguaranteesorpredictionsoffutureperformance,andinvolveknownandunknownrisks,
uncertaintiesandotherfactors,manyofwhicharebeyondPrecinct’scontrol,andwhichmaycause
actualresultstodiffermateriallyfromthoseexpressedinthispresentation.
Precinctundertakesnoobligationtoupdateanyinformationoropinionswhetherasaresultofnew
information,futureeventsorotherwise.
Thispresentationisprovidedforinformationpurposesonly.
NocontractorotherlegalobligationsshallarisebetweenPrecinctandanyrecipientofthis
presentation.
NeitherPrecinct,noranyofitsBoardmembers,officers,employees,advisers(includingAMPHaumi
ManagementLimited)orotherrepresentativeswillbeliable(incontractortort,includingnegligence,
orotherwise)foranydirectorindirectdamage,lossorcost(includinglegalcosts)incurredorsuffered
byanyrecipientofthispresentationorotherpersoninconnectionwiththispresentation.