Precinct Properties New Zealand Limited/Announcement

Precinct Annual General Meeting 2021

AGM3 November 2021PCTReal Estate

4 November 2021
Precinct
Annual General
Meeting

Welcome
and good morning
Craig Stobo,
Independent Director and
Chair

Online questions and voting
•Questions can now be
submitted through the
webcast
•Questions will be addressed
at relevant time in meeting
•Opening of voting

Board and Executive Team
Board of Directors
Craig Stobo
Independent Director and Chair
Graeme Wong
Independent Director
Anne Urlwin
Independent Director
Chris Judd
Independent Director
Nicola Greer
Independent Director
Mark Tume
Independent Director
Apology
Mohammed Al Nuaimi
Director
Executive Team
George Crawford
Deputy Chief Executive Officer
Scott Pritchard
Chief Executive Officer
Richard Hilder
Chief Financial Officer

Meeting agenda
•Review Precinct performance and activity
•Shareholder questions and discussion.
•Consider and vote on sixordinaryresolutionsand
one special resolution

Board composition and changes
•Welcome Nicola and Mark to the Board
−Launa Inman and Rob Campbell retired
•Majority of Independent Directors maintained
−Six of seven Directors independent

Director remuneration
•Director remuneration has been held constant
since 2018.
•Full transparency of Director fees
•Engaged independent advisors PwC to provide
New Zealand listed company benchmark data
•Regulatory landscape has continued to change

Focus on ESG
•ESG Committee
established at Board level
•Responding to our
material ESG risks and
opportunities
•Commitment to Precinct’s
Sustainable Debt
Framework dated 2020

Sustainability performance
•Measure and report against
global sustainability assessments,
frameworks and standards
•GRESB score of 82
−global average 73
−public disclosure level “A”

Offsetting
embodied carbon
Compensate for the
tonnes of CO2
equivalent to seek
carbon neutrality
i

Precinct’s
objective
Creating
sustainable value
through city centre
real estate
i
Photo credit: Simon Devitt

2021 results highlights
+3.0%
AFFO increase
+3.2%
DividendIncrease
7.7 year
WALT
98%
Occupancy
Photo credit: Simon Devitt

Precinct Internalisation
Agreement
•Evolution of the business
•Places Precinct in a strong
position for future growth
•Expected to provide significant
benefits to Precinct and its
shareholders
•Key management personnel
retained
Photo credit: Simon Devitt

6.70cps
FY22 Dividend guidance
3.1%
Year-on-year growth
10
th
December 2021
FY22 Q1 dividend payment
FY22 dividend

The high quality and
resilient nature of our
portfolio is driving
Precinct’s operating
and financial
performance
Quality delivers
resilience
Photo credit: Simon Devitt

Portfolio highlights
+$282.9m
Full year revaluation
Photo credit: Simon Devitt
$179.9m
Total comprehensive income after tax

Capital Management
•$250 million equity raised
•$150 million Green Bond issued
•Completed ANZ Centre sale
•New $250 million bank facility
Strong
balance
sheet
position

Our markets
•Strong leasing demand from high quality occupiers
•Solid demand for premium grade office space in
Auckland and Wellington
35,270sqm
Leasing transactions (including development leasing)

COVID-19 impacts and support
•Impact of prolonged lockdowns and restrictions on
our occupiers
- Auckland businesses heavily impacted
•Precinct will continue to provide support through
a range of relief packages
- Financial support provided totalling $10 million
since the pandemic started

Generator
Supporting
Precinct’s portfolio
leasing and long
term strategic
objectives

Wellington opportunities
•Strategically located
•Significant
redevelopment
opportunities
•Progressing well

Bowen Campus Stage 2
•Both projects remain
on programme and
on budget
•44 Bowen Street
100% leased

Deloitte Centre
87% pre-committed
(incl. hotel) following
commitment from
Deloitte

Conclusion and outlook
•Our business has demonstrated remarkable
resilience over the last 18+ months
•Encouraged by the increase in New Zealand’s
vaccination rate
•Leverage the quality of our portfolio
•Dividend guidance of 6.70cps for the FY22 year
maintained

Shareholder Q&A

Formal Business

Resolution 1
That Graeme Wong be re-
elected as a director of
Precinct
The Board unanimously
recommend that
shareholders vote in favour

Resolution 2
That Chris Judd be elected
as a director of Precinct
The Board unanimously
recommend that
shareholders vote in favour

Resolution 3
That Nicola Greer be
elected as a director of
Precinct
The Board unanimously
recommend that
shareholders vote in favour

Resolution 4
That Mark Tume be
elected as a director of
Precinct
The Board unanimously
recommend that
shareholders vote in favour

Resolution 5
That the directors be authorised to fix the
remuneration of the independent directors
of the Company from 4 November 2021
pursuant to the per position sums shown in
the “Proposed Remuneration” column of
the table shown in note 2 of the
explanatory notes.

Resolution 6
That the directors be authorised to fix the
remuneration of Ernst & Young as auditor
for the ensuing year.

Resolution 7
That the existing constitution of the
Company is revoked, and the constitution
presented at the meeting is adopted as
the constitution of the Company.

Voting and closure
•We will now proceed to a poll and conclude the
meeting
•The results will be announced to the NZX

Thank you
Thank you

---

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
NZX announcement – 4 November 2021
Precinct Properties New Zealand Limited Annual General Meeting
11:30am (New Zealand time), Thursday 4 November 2021
Online only attendance at https://meetnow.global/nz

Chairman’s opening address
Morena, Tena Koutou Katoa
Good morning and welcome everyone to the Precinct Properties 2021 Annual
General Meeting of shareholders. I’m Craig Stobo, Independent Director and Chair.
While we had planned for a hybrid meeting, due to the current uncertainty of the
COVID-19 situation in New Zealand, the on-going restrictions on gatherings in
Auckland and having regard to the health and safety of our stakeholders and people,
attendance at today’s meeting is being held online only via the Computershare
Online Meeting platform.
This allows Shareholders, Proxies and Guests to attend the meeting virtually. All
attendees can watch a live webcast of the meeting and read the company
documents associated with the meeting. In addition, shareholders and proxies have
the ability to ask questions and submit votes. We hope to be able to hold an in-person
meeting next year with you all. I now declare voting open on all items of business.
I would now like to introduce the members of the Board and executive team joining
us today. We have, Anne Urlwin, Graeme Wong, Nicola Greer, Mark Tume, Chris Judd,
Scott Pritchard, George Crawford and Richard Hilder.
Mohammed Al Nuami is unable to attend this year’s meeting and has given his
apology.
We also have present with us representatives from our auditors, Ernst & Young, tax
advisors, KPMG, legal advisors, Chapman Tripp and our registrar, Computershare.
Now moving to the agenda of today’s meeting

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
Meeting agenda
We will begin with reviewing the performance and activity of Precinct over the last
financial year. Following the conclusion of the presentation, we will then take any
questions you may have. We welcome any feedback.
The meeting will then proceed to the formal business where we have a number of
resolutions to consider. There are six ordinary resolutions and one special resolution put
forward for shareholder approval today.
This includes four ordinary resolutions relating to the re-election and election of
Independent Directors, one ordinary resolution to consider director remuneration and
one ordinary resolution that the Directors be authorised to fix the remuneration of Ernst
& Young as auditor for the ensuing year.
The last resolution to consider today is a special resolution. It proposes that the existing
constitution of the Company is revoked, and the constitution presented at the
meeting is adopted as the constitution of the Company.
Board composition and changes
Before we move to some of our highlights this year, I would first like to give a brief
update on how our Board succession plans have progressed. I will also provide a bit
more detail to you on the fifth ordinary resolution being considered with regards to
director remuneration. As you would have noticed, our Board composition has
changed since our last meeting. Earlier this year, Launa Inman and Rob Campbell
retired from the Precinct Board. Consequently, we are delighted to have appointed
Nicola Greer and Mark Tume as Independent Directors to our governance regime.
Both Nicola and Mark are capable and experienced professional directors who
further strengthen Precinct’s Board effectiveness and will ensure best practice
corporate governance is maintained.
In accordance with the NZX Code, a majority of Independent Directors is maintained
with six of our seven directors currently being independent.
Moving to the proposed changes to Director remuneration.

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
Director Remuneration
Following an annual review and independent benchmarking exercise undertaken by
PwC, the adjustments we are proposing to shareholders take into account the overall
performance of the Company and are also reflective of market conditions.
We continue to provide full transparency of director fees including committee
memberships. Importantly, the Company engaged independent advisors PwC to
provide New Zealand listed company benchmark data in considering the proposed
rates in resolution five.
In particular, PwC was requested to provide benchmark data for the newly-
established Environmental, Social & Governance Committee.
The Company also proposes to introduce a cap on the aggregate ad hoc fees that
can be paid in respect of Due Diligence Committees in any one year. Any Due
Diligence Committee fees in excess of the proposed annual cap would be put to
shareholders for approval.
The Board considers that alignment of Directors’ fees to market is important in order
for the Company to be able to continue to attract and retain high performing
Directors whose skills and experience are well-suited to the Company’s requirements.
Notably, Director remuneration has been held constant since the last approved at our
2018 Annual General Meeting. Since then, the regulatory landscape in which the
Company operates has continued to change. Increased regulatory risk and
obligations have resulted in increased demand on Directors’ time and broadening
their scope of responsibilities in monitoring and assessing legal and regulatory
compliance.
Focus on ESG
This is particularly true with respect to climate change and the establishment of the
Company’s green bond programme. Establishing a dedicated Environmental, Social
& Governance (ESG) Committee at a Board level reflects the increased importance
of this area to our Company. This reinforces the high priority Precinct places on our

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
material ESG risks and opportunities, and the long-term view we are taking. Nicola
Greer has been appointed Chair of this committee.
As a business, we continue to make good progress across our ESG performance. Let
me share some of our recent achievements in this space. As you know, Precinct
measures and reports on its performance against global sustainability assessments,
frameworks and standards. Ensuring Precinct is continuously aligned with international
best practice sustainability governance, management practices and disclosure
enables Precinct to review and evaluate its performance against industry peers and
global benchmarks.
During the year, we achieved a Global Real Estate Sustainability Benchmark (GRESB)
score of 83. Pleasingly, this was well above the global average of 70. GRESB is
considered the global standard for ESG benchmarking and reporting for real estate
and remains our core ESG indices performance benchmark. The Precinct team are
immensely proud of improving our GRESB score over the last four consecutive years.
Today, we are also able to share our most recent 2021 GRESB results which were
published globally last month. Precinct achieved a score of 82, again placing us
above the current global average of 73. I would also like to note Precinct was
recognised for its high level of public disclosure. This has improved from a GRESB ‘B’ to
an ‘A’ level which is well above the global average of ‘C’, and further reflects the
improvements our business has made in reporting and disclosure, particularly over the
last five years.
In addition to GRESB, Precinct received a score of ‘B-’ following its participation in the
Carbon Disclosure Project (CDP) during the year. Pleasingly, this was higher than both
the Oceania regional and Global average of C. Precinct has also been validated as
a Toitū carbonzero certified organisation for a second year.
Last year you may remember we shared that we would be offsetting the embodied
carbon from construction at our development project at 40 Bowen Street in
Wellington. Effectively this means we will compensate for the tonnes of CO2
equivalent embodied in the materials used and associated with construction to seek

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
carbon neutrality. We are delighted to report this has been achieved in partnership
with Toitū Envirocare through the purchase of carbon credits.
Including the cost to offset the embodied carbon within the project budget was a first
for Precinct and we continue to proactively progress this initiative. This year we
extended the initiative to our 44 Bowen Street project in Wellington.
Precinct considers the construction of a zero-carbon building to currently be
unfeasible both financially and physically, and believes carbon offsetting is an
appropriate tool. Going forward, we plan to include the cost to offset embodied
carbon in all our development feasibilities for future development projects, where
feasible.
As we continue to deliver on our business objectives and key priorities for FY22 and
beyond, we are focused on improving our operational performance further. The
requirement for climate-related financial risk reporting for listed corporates and
major financial institutions has now been passed by Parliament and, once it comes
into force, will further support a low-carbon future for Aotearoa New Zealand,
something Precinct is fully supportive of.
Before I hand over to Scott, I would like to take you through our 2021 results highlights
and cover the Internalisation Agreement which was reached this year before
declaring the first quarter dividend for FY22.
2021 highlights
Precinct’s strategy remains clear, and we are committed to our business objective of
creating sustainable value from city centre real estate. We remain focussed on
delivering exceptional spaces for our clients and communities, in which they can
thrive, whilst maximising long term returns to Precinct investors.
2021 has certainly been another unique year. We continue to navigate through the
challenges from COVID-19 and more recently the delta variant, which has seen New
Zealand be placed in various Alert levels of lockdown. As many of us have
experienced first-hand, Auckland in particular has been impacted heavily by the

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
recent lockdowns. So, like many other businesses our operations have also been
impacted. Scott will provide more of a deep dive into this and how we are responding
to these challenges.
Despite these challenges, our business has delivered a strong result for the FY21 period.
This illustrates the portfolio’s resilience and investor confidence which remains very
supportive for the Precinct business.
Pleasingly and in line with guidance, we have delivered further growth in our AFFO.
This has resulted in a 3.2% increase in our dividends for the FY21 year to you, our
shareholders. We are committed to growing value for Precinct investors, and we are
extremely pleased to have lifted our dividends every year since 2015.
We completed a significant amount of leasing in the period and maintained our high
portfolio occupancy at 98%, reflecting the premium quality of our portfolio, and active
management approach by the Precinct team. Our strong portfolio metrics reinforce
Precinct’s earnings security and the stable and secure income our portfolio generates.
During the year, we also completed several capital management initiatives which
have placed Precinct in a strong balance sheet position. These include our first green
bond issue, a $250 million equity raising and the sale of the remaining 50% of the ANZ
Centre in Auckland.
Precinct Internalisation Agreement
Earlier this year in March, the decision by the Independent Directors to internalise the
management of Precinct was a key moment in the evolution of our business. Precinct
was listed on the NZX in 1997 as an externally managed trust and has evolved
significantly since then. Particularly in the last 10 years as it has been corporatized,
rebranded, adopted a new strategy, and has now been fully internalised.
As the Independent Directors needed to act quickly and with certainty given
competing interests, 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.

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
Capital management
Turning to capital management. We have completed a number of initiatives which
have further strengthened our balance sheet position. This includes successfully
raising $250 million of equity through a Placement and Retail Offer in June 2021 to
provide funding for assets in Wellington. I will talk more about this shortly. We
received a high level of support from both local and offshore investors for this equity
raising reinforcing the investor confidence for our business and Precinct’s long-term
strategy. The offer structure was designed to provide an equitable treatment to all
our existing shareholders and we strongly believe this was achieved.
In addition, we issued a six-year secured, fixed rate green bond offer of $150 million
and continued to progress capital recycling opportunities with the divestment of the
remaining 50% of the ANZ Centre in Auckland for $177 million. These initiatives and
establishing a new $250 million bank facility have maintained a favourable gearing
level of 28.2% which is well under Precinct’s borrower covenant level of 50%.
Our markets
While the markets we are invested in, Auckland and Wellington, have been impacted
by COVID-19, despite the challenging backdrop of the pandemic, we have been
able to capitalise on strong office leasing demand throughout the year.
Precinct's portfolio continues to benefit from quality occupiers, a long WALT and high
occupancy levels.
Our observation is we have not seen a material change in the demand for premium
grade office space in New Zealand. The role of the office has shown its resilience,
reinforcing the importance occupiers are placing on office space being a critical
component to the success of their business.
For Precinct, we have seen significant demand for our assets, particularly those
located on the waterfront in Auckland or in seismically strong buildings in Wellington.

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
While recent extended lockdowns have of course meant more volatility, especially in
Auckland, it is clear that businesses are making the decision to lease high-quality
space in order to ensure that their workforce want to come back to the office.
In Wellington, occupier markets have been less impacted, and we continue to
observe solid demand particularly from central government.
COVID-19 impact and support
Since our annual results in August, the impacts of COVID-19 have been felt across New
Zealand with the country experiencing prolonged lockdowns and various levels of
restrictions. In particular, we are seeing how the extended lockdown and prolonged
Covid-19 restrictions are affecting our biggest city, Auckland. The extended lockdown
which began in mid-August to battle the Delta variant has without a doubt impacted
Auckland businesses. Businesses have had it tough; the length and uncertainty of the
lockdown and restrictions are resulting in heavy financial impacts and sadly, business
closures for some.
Precinct engaged with our occupiers early on with an approach of providing support
to those who are suffering significant losses and facing financial hardship. While
support has mainly been provided to our retailers and hospitality food and beverage
operators, Precinct will continue to support all occupiers in our portfolio who need it.
We understand just how stressful the immediate impacts have been and for many,
are still being felt.
Precinct have provided support through a range of relief packages including rental
abatements. Since the pandemic started, this has totalled financial support of circa
$10 million.
Throughout the lockdowns, we have also prioritised the mental health and wellbeing
of our own staff, ensuring support and services were available. Making sure we were
all staying connected and in regular contact as a business has been fundamental.
Before I talk more about each of our development projects, I would like to provide an
update on Generator.

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
Generator
Generator continues to provide a differentiating component to Precinct’s real estate
offering. It is supporting Precinct’s portfolio leasing and our long-term strategic
objectives.
Prior to the recent lockdown, occupancy and events bookings were showing a solid
recovery and we saw the demand for flexible workspace rebound. Pleasingly, over
the last quarter, we have achieved encouraging results which are inline with budget.
During the year, Generator also opened its brand-new meeting and events suites
located in the lobby of the HSBC Tower in Auckland.
We are also pleased to have further advanced our Generator offering in Wellington
with the completion of 30 Waring Taylor Street. This is Generator’s first Wellington-
based offering, and we are excited to welcome clients and businesses to this space.
Advancing Wellington opportunities
Now moving to our development assets. I will start with our projects in Wellington.
As mentioned earlier, raising $250 million of new equity this year has provided sufficient
funding for the acquisition of two Wellington office assets. As you can see from the
slide, Bowen House and the Freyberg Building are both strategically located in the
heart of the government precinct. These assets offer significant redevelopment
opportunities and we have progressed these since their purchase.
At Bowen House, the refurbishment and seismic upgrade works commenced in
August and continue to track well.
At the Freyberg Building, refurbishment options are currently being explored.
Bowen Campus
Moving to Stage two of Bowen Campus. Both projects at 40 and 44 Bowen Street
continue to advance, and we are tracking to programme and remain on budget.
Pleasingly, Precinct signed a 12 year term lease to Waka Kotahi NZ Transport Agency
at 44 Bowen Street. They will occupy 6 contiguous floors across the ground and levels

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 F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
1 to 5, totalling 8,660 sqm of space. This is a significant leasing deal to have secured
for this project as the building is now 100% pre-leased prior to expected practical
completion in 2023.
Notably, with only one and a half floors totalling 2,700 sqm remaining vacant at 40
Bowen Street, the aggregate pre-committed leasing across Stage Two now represents
87% of the combined office space with a weighted average lease term of over 11
years. A great result for this project.
Now moving to Auckland.
Deloitte Centre
Following the start of construction of our One Queen Street redevelopment project in
May of this year, we continue to achieve good progress at the site. Despite the recent
lockdowns we remain on track for all the upcoming critical dates for the project.
Securing a commitment earlier this year from Deloitte to lease all the remaining high
rise office space comprising levels 15 to 20, together with naming rights of the building
means there is only two and a half low rise floor plates which remain vacant.
Concluding this long-term commitment from a high quality business like Deloitte
ahead of project completion reflects the strong demand for prime inner city office
space and how businesses are valuing the benefits of being part of the wider
Commercial Bay community.
Following the commitment from Deloitte, we have advanced pre-committed leasing
at this project to 87%.
Conclusion and outlook
To conclude, our business has demonstrated remarkable resilience over the last 18+
months. While there is much uncertainty with regards to COVID-19, we are
encouraged by the increase in New Zealand’s vaccination rate.
Looking ahead, with the internalisation now complete, the management team, along
with Precinct's Board, is considering its strategic options and we expect to leverage

PCT upcoming 2021 AGM to be Online Only Event PCT Annual General Meeting – voting results

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