Presentation to NZX Virtual Investor Event

WELCOME
TO THE NZX RETAIL INVESTOR WEBINAR
NZX Retail
Investor
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2021

Our
Purpose
1993
NZX LISTED
PROPERTY VEHICLE
FOCUSED ON THE
INDUSTRIAL
SECTOR
PFI GENERATES INCOME FOR INVESTORS AS PROFESSIONAL LANDLORDS TO
THE INDUSTRIAL ECONOMY, GENERATING PROSPERITY FOR NEW ZEALAND.
NZX Retail
Investor
Webinar
2021
EST.
2

Overview
of PFI
2.03B
$
portfolio with an
86% Auckland
weighting
Sound risk
management and
portfolio metrics.
Company gearing of
30.0
%
4.8
YEAR WALT
98.5
%
AVERAGE
OCCUPANCY
OVER PRIOR
10 YEARS
EXPERIENCED
MANAGEMENT TEAM
SUPPORTED BY
STRONG GOVERNANCE
FRAMEWORK
20
MILLION
$
Liquid assets
average size of
NZX Retail
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2021
3

Portfolio
Characteristics
7,250
PFI AVERAGE
Industrial property is a unique asset class, assets are typically:
20
MILLION PFI AVG.
1.5
PFI AVERAGE
TENANTS PER
PROPERTY
Generic and occupied by a small
number of tenants, making them
less management intensive
SMALLER
M
2
MORE LIQUID
$
1
1
4
4
77
4
1
1
3
owns
Requiring lower levels of
capex and present a
reduced seismic risk
NZX Retail
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2021
4

Historical
Operational
Performance
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2021
0
1
2
3
4
5
6
93%
94%
95%
96%
97%
98%
99%
100%
Dec-11Dec-12Dec-13Dec-14Dec-15Dec-16Dec-17Dec-18Dec-19Dec-20
Occupancy (%)WALT (years)
Since 2011, PFI has achieved a year end average occupancy of 98.5% and a weighted average lease term or
WALT of 5.09 years
5

The Journey
So Far
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2021
Listed
Managed by
AMP
Managed by
PFIM
Merger
Rights Issue
Internalisation
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
Investment Properties $m
Investment PropertiesBorrowings
Rights Issue
PFI’s growth in investment properties since listing
6

How Have
We Gone?
YEAR ENDING 31 DECEMBER ($M, UNLESS NOTED)
20162017201820192020
TOTAL COMPREHENSIVE INCOME AFTER TAX
123.451.7110.1176.3113.5
DISTRIBUTION ADJUSTMENTS
(92.1)(17.3)(72.9)(137.5)(73.4)
ADJUSTED FUNDS FROM OPERATIONS
31.334.437.238.840.1
TOTAL ASSETS
1,121.81,242.11,358.91,522.71,687.3
TOTAL LIABILITIES
365.7399.2443.8468.7550.7
TOTALEQUITY
756.1842.9915.11,054.01,136.6
NET TANGIBLE ASSETS (CENTS PER SHARE)
160.7163.2177.7205.5220.9
LOAN-TO-VALUE RATIO (COVENANT: <50%)
30.1%30.8%30.3%28.2%30.0%
INTEREST COVER RATIO (COVENANT: >2.0X)
3.4x3.7x3.9x4.0x4.1x
NZX Retail
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Since inception PFI has delivered an average annual return of 11.31% and the last five years has seen strong
growth in rents and values whilst keeping gearing at low levels and maintaining a high ratio of interest cover
7

Our Recent
Results
Interim profit
after tax
Now 5.36 cents
per share
12.1
%
Now 4.71cents
per share
NZX Retail
Investor
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2021
MILLION
FFO
AFFO
24.3
%
273.5
Earnings growth:
8

14.5
%
NZX Retail
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2021
94 properties valued at the half year
240.3M
$
OR
22.9
%
50.5CENTS
OR
Our Recent
Results
Increase in net tangible assets per
share, now 271.4 cents per share
Valuation gains:
9

AKL
In our view yields
still have some
room to firm in
2021 given the
weight of capital
and liquidity from
the equity side.
“
CBREJUNE 2021
Auckland Market Outlook
Prime industrial’s
CBRE ranking
out of 12 property
classes in their
returns forecast
Prime industrial
forecast five-year
returns, comprising
4.2% income and
5.4% capital
Secondary
industrial’s CBRE
ranking out of 12
property classes in
their returns forecasts
Secondary
industrial forecast
five-year returns,
comprising 5.1%
income and 5.5%
capital
The Market We
Operate In
3
rd
1
9.6%
PA
st
10.6%
PA
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10

Market
Update
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▪E-commerce penetration has been accelerated by the COVID-19 pandemic,
with growth set to continue (top graph)
▪Online sales in New Zealand could grow from the current 11% to 17% (or
$9.3Bn) by 2025
2
, boosting tenant demand for well-located industrial property
close to key transport links
−Based on this growth in online sales alone, it is estimated an additional
230,000 sqm of warehouse space will be needed by 2025
▪Also supporting investor demand for industrial property:
−CBRE predict industrial market rental growth will average 3.8% over the
next 5-years (bottom graph)
−Continued low levels of vacancy
−Low interest rate environment
1
NZ Post Analysis;
2
CBRE “Auckland Property Market Outlook”, June 2021
250
300
350
400
450
500
550
600
650
JanFebMarAprMayJunJulAugSepOctNovDec
$m
NZ Post Total Online Spend
1
201920202021
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
20212022202320242025
Forecast Rental Growth
2
Prime IndustrialSecondary IndustrialPremium OfficeLFRRetail
11

Purpose,
Vision and
Strategy
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2021
12

Looking
Forward
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13

Our Current
Portfolio
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14

Core Generic
Holdings
▪Purchased for $39.0 million in January 2021
▪Located on a 2.8ha site, 250 metres from
North Western motorway
▪PFI already owned neighbouring sites on
Rosebank and Patiki Roads, together these
create a 8.6ha industrial estate, valued in
excess of $125 million
▪Opportunity to create value by integrating with
existing properties
Add photo of 670-
680 Rosebank Road
670-680 ROSEBANK ROAD, AVONDALE
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15

Brownfield
Opportunities
▪Large 3.9ha site in one of Auckland’s prime
industrial locations
▪Good links to Southern Motorway, dual access
from both Bowden Road and GabadorPlace
▪Versatile site that can accommodate large-
scale or multiple tenant designs
▪March 2023 lease expiry to provide PFI with a
significant redevelopment opportunity, which
could involve an investment of ~$50 million
30-32 BOWDEN ROAD, MTWELLINGTON
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Assets
Held For
Sale
▪Contracted divestment of Carlaw Park
expected to settle towards end of FY21
▪Shed 22 seismic strengthening works
underway, to be divested following the
completion of works
▪After planned divestments:
−Pro forma LVR of 25.4%;
−Portfolio will be 98.8% industrial;
−85.6% of portfolio will be located in
Auckland
JUNE 2021
CARLAW
PARK
DIVESTMENT
SHED 22
DIVESTMENT
PRO FORMA
INVESTMENT PROPERTIES &
AHFS
$2,025.3m-$110.0m▼-$11.4m▼$1,904.0m
TOTAL DRAWN BORROWINGS$605.4m-$110.0m▼-$11.4m▼$484.1m
CONTRACT RENT$96.3m-$6.8m▼-$0.9m▼$88.6m
LOAN-TO-VALUE RATIO 30.0%-3.7%▼-0.8%▼25.4%
AUCKLAND PROPERTY85.9%-0.8%▼+0.5%▲85.6%
INDUSTRIAL PROPERTY92.9%+5.3%▲+0.6%▲98.8%
NZX Retail
Investor
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2021
17

Review
and
Questions
NZX Retail
Investor
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2021
With an excellent
portfolio, a strong balance
sheet, and a favourable
outlook for industrial
property, we enter the
second half of 2021 well
positioned to deliver on
our purpose: Creating
strong, stable income
for investors and
generating prosperity
for New Zealand.
Earnings
growth
Valuation
gains
Strategy
refreshed and
progressed
Increased
dividend targeted
and revised
dividend policy
Questions?
H1
2021
HIGHLIGHTS
18

Disclaimer
NZX Retail
Investor
Webinar
2021
The information included in this presentation is
provided as at 19 October 2021.
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.
19

References
NZX Retail
Investor
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2021
20
SLIDE 3
OVERVIEW OF PFI
All Statistics as at 30 June
2021, aside from
occupancy, which is an
average of the last 10 years
(see slide 5).
SLIDE 4
PORTFOLIO
CHARACTERISTICS
All Statistics as at 30 June
2021.
SLIDE 8 & 9
OUR RECENT
RESULTS
All figures as at 30 June
2021. Funds From
Operations and Adjusted
Funds From Operations are
non-GAAP financial
information and are
common investor metrics,
which have been calculated
in accordance with the
guidelines issued by the
Property Council of
Australia.