Interim Results and $174.1 million Entitlement Offer 25 February 2015 www.precinctrightsoffer.co.nz www.precinct.co.nz Disclaimer: Not for release or distribution in the United States Disclaimer This presentation has been prepared by Precinct Properties New Zealand Limited (Precinct). This presentation has been prepared in relation to the pro rata entitlement offer of new shares in Precinct (New Shares) to be made to: ■ Eligible institutional shareholders of Precinct (Institutional Entitlement Offer); and ■ Eligible retail shareholders of Precinct with a registered address in New Zealand or Australia (Retail Entitlement Offer), under clause 19 of Schedule 1 of the Financial Markets Conduct Act 2013 and Australian Securities & Investments Commission Class Order 00/183 (together, the Entitlement Offer). Information: This presentation contains summary information about Precinct and its activities which is current as at the date of this presentation. The information in this presentation is of a general nature and does not purport to be complete nor does it contain all the information which a prospective investor may require in evaluating a possible investment in Precinct or that would be required in a prospectus, investment statement or product disclosure statement for the purposes of the Securities Act 1978 or the Financial Markets Conduct Act 2013. The historical information in this presentation is, or is based upon, information that has been released to NZX Limited (NZX). This presentation should be read in conjunction with Precinct's other periodic and continuous disclosure announcements, which are available at www.nzx.com. NZX: The New Shares have been accepted for quotation by NZX and will be quoted on the NZX Main Board upon completion of allotment procedures. The NZX Main Board is a licensed market under the Financial Markets Conduct Act 2013. However, NZX accepts no responsibility for any statement in this presentation. Not financial product advice: This presentation is for information purposes only and is not financial or investment advice or a recommendation to acquire Precinct securities, and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and consult an NZX Firm, or solicitor, accountant or other professional adviser if necessary. Past performance: Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 2 Disclaimer Future performance: This presentation contains certain "forward-looking statements" such as indications of, and guidance on, future earnings and financial position and performance. Forward-looking statements can generally be identified by the use of forward-looking words such as, 'expect', 'anticipate', 'likely', 'intend', 'could', 'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast', 'estimate', 'target', 'outlook', 'guidance' and other similar expressions within the meaning of securities laws of applicable jurisdictions and include, but are not limited to, forecast EBITDA, operating cashflow, future effective tax rates, the company’s development program, distribution guidance, estimated asset life, the outcome and effects of the Entitlement Offer and the use of proceeds and property market forecasts. The forward-looking statements contained in this presentation are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of Precinct, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. There can be no assurance that actual outcomes will not materially differ from these forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including the risk factors set out in this presentation. Investors should consider the forward-looking statements contained in this presentation in light of those disclosures. The forward-looking statements are based on information available to Precinct as at the date of this presentation. Except as required by law or regulation (including the NZX Main Board Listing Rules), Precinct undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise. Indications of, and guidance on, future earnings or financial position or performance are also forward-looking statements. Investment risk: An investment in securities in Precinct is subject to investment and other known and unknown risks, some of which are beyond the control of Precinct. Precinct does not guarantee any particular rate of return or the performance of Precinct. Not an offer: This presentation is not a prospectus, investment statement or product disclosure statement or other offering document under New Zealand law (and will not be lodged with the Registrar of Financial Service Providers) or any other law. This presentation is for information purposes only and is not an invitation or offer of securities for subscription, purchase or sale in any jurisdiction (and will not be lodged with the U.S Securities Exchange Commission). Any decision to purchase New Shares in the Retail Entitlement Offer must be made on the basis of the information to be contained in a separate offer document to be prepared and issued to eligible retail shareholders. The retail offer booklet for the Retail Entitlement Offer will be available to eligible retail shareholders in New Zealand and Australia following its lodgement with NZX. Any eligible retail shareholder who wishes to participate in the Retail Entitlement Offer should consider the retail offer booklet in deciding to apply under that offer. Anyone who wishes to apply for New Shares under the Retail Entitlement Offer will need to apply in accordance with the instructions contained in the retail offer booklet and the entitlement and application form. This presentation does not constitute investment or financial advice (nor tax, accounting or legal advice) or any recommendation to acquire entitlements or New Shares and does not and will not form any part of any contract for the acquisition of entitlements or New Shares. This presentation may not be released or distributed in the United States. This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. Neither the New Shares nor the entitlements have been, or will be, registered under the U.S. Securities Act of 1933(the U.S. Securities Act) or the securities laws of any state or other jurisdiction of the United States. Accordingly, the entitlements and the New Shares may not be offered or sold, directly or indirectly, in the United States or to persons that are acting for the account or benefit of persons in the United States, unless they have been registered under the U.S. Securities Act, or are offered and sold in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and any other applicable state securities laws. Refer to slide 53 for information on restrictions on eligibility criteria to take up or exercise entitlements in the Offer. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 3 Disclaimer Financial data: All dollar values are in New Zealand dollars (NZ$ or NZD) unless otherwise stated. Investors should note that this presentation contains pro forma financial information. The pro forma financial information and past information provided in this presentation is for illustrative purposes only and is not represented as being indicative of Precinct's views on its future financial condition and/or performance. The pro forma financial information does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the United States Securities and Exchange Commission (SEC). Investors should be aware that certain financial data included in this presentation including EBIT, NPI are "non-GAAP financial measures" under Regulation G of the U.S. Securities Exchange Act of 1934. Investors are cautioned not to place undue reliance on any non-GAAP financial measures included in this presentation. Disclaimer: None of the underwriters, nor any of their or Precinct's respective advisers or any of their respective affiliates (including AMP Haumi Management Limited), related bodies corporate, directors, officers, partners, employees and agents, have authorised, permitted or caused the issue, submission, dispatch or provision of this presentation and, except to the extent referred to in this presentation, none of them makes or purports to make any statement in this presentation and there is no statement in this presentation which is based on any statement by any of them. For the avoidance of doubt, the underwriters and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents have not made or purported to make any statement in this presentation and there is no statement in this presentation which is based on any statement by any of them. To the maximum extent permitted by law, Precinct, AMP Haumi Management Limited, the underwriters and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents exclude and disclaim all liability, for any expenses, losses, damages or costs incurred by you as a result of your participation in the Entitlement Offer and the information in this presentation being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise. To the maximum extent permitted by law, Precinct, AMP Haumi Management Limited, the underwriters and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of information in this presentation and, with regards to each underwriter, their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents take no responsibility for any part of this presentation or the Entitlement Offer. The underwriters and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents make no recommendations as to whether you or your related parties should participate in the Entitlement Offer nor do they make any representations or warranties to you concerning the Entitlement Offer, and you represent, warrant and agree that you have not relied on any statements made by any of the underwriters, or any of their advisers, affiliates, related bodies corporate, directors, officers, partners, employees or agents in relation to the Entitlement Offer and you further expressly disclaim that you are in a fiduciary relationship with any of them. Statements made in this presentation are made only as the date of this presentation. The information in this presentation remains subject to change without notice. Precinct reserves the right to withdraw the Entitlement Offer or vary the timetable for the Entitlement Offer without notice. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 4 Agenda Highlights Page 6 Section 1 – Interim results and capital management Page 8 Section 2 – Market and portfolio overview Page 15 Section 3 – Development update Page 21 Section 4 – Equity Offer Page 34 Conclusion and outlook Page 44 Precinct Properties New Zealand Limited Scott Pritchard, CEO George Crawford, CFO Note: All $ are in NZD unless otherwise stated INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 5 Highlights Interim results $31.6m H1 FY15 net profit after tax +10.3% increase in net operating income1 $97m sale of SAP Tower settlement in February 2015 $98m US private placement $75m retail bond Equity issue announced today $174.1m 1 for 7 entitlement $1.15 Transformation of Precinct now underway Underwritten price INTERIM RESULTS AND ENTITLEMENT OFFER Note 1: Net operating income is an alternative performance measure which Page 6 adjusts profitOR after tax for a number non-cash items. NOT FOR net RELEASE DISTRIBUTION IN THE of UNITED STATES www.precinctrightsoffer.co.nz Page 6 (471?}: .1 7 - Financial performance For the 6 months ended Dec-2014 Dec-2013 ($m) Unaudited Unaudited D $62.1 m $58.8 m + $3.3 m ($0.8 m) ($0.9 m) $0.1 m ($1.3 m) $1.3 m Net property income Indirect expenses Performance fee - Base fees ($4.3 m) ($4.1 m) ($0.2 m) EBIT $57.0 m $52.5 m + $4.5 m ($16.9 m) ($16.6 m) ($0.3 m) $40.1 m $35.9 m + $4.2 m ($4.8 m) ($3.9 m) ($0.9 m) $35.3 m $32.0 m + $3.3 m - - Net interest expense Operating profit before tax Current tax expense Operating profit after tax Unrealised net gain / (loss) in value of investment properties Realised gain on sale of investment property Unrealised derivative financial instrument gain / (loss) $0.2 m - ($15.9 m) Deferred tax benefit / (expense) $1.4 m ($3.1 m) + $4.5 m Net profit after tax and unrealised gains $31.6 m $39.5 m ($7.9 m) Weighted number of shares on issue 1,059.7 m 1,033.8 m 25.9 m Net operating income before tax - gross (cps) 3.78 cps 3.47 cps + 0.31 cps Net operating income after tax - (cps) 3.33 cps 3.10 cps + 0.23 cps Dividend 2.70 cps 2.70 cps - 81% 87% (6%) NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 3.50 c 3.00 c 2.50 c $10.6 m INTERIM RESULTS AND ENTITLEMENT OFFER 4.00 c + $0.2 m ($5.3 m) Payout ratio EPS reconciliation to comparative period 2.00 c www.precinctrightsoffer.co.nz Page 8 Net property income H1 FY15 H1 FY14 D AMP Centre $4.5 $4.7 ($0.2) SAP Tower $3.6 $3.2 + $0.4 PwC Tower $8.0 $7.6 + $0.4 ANZ Centre $8.4 $8.4 $0.0 HSBC House $4.0 $3.6 + $0.5 Downtown Shopping Centre $3.3 $3.4 Zurich House $2.9 $2.8 + $0.0 Auckland total $34.7 $33.6 + $1.0 125 The Terrace $2.6 $2.5 + $0.1 171 Featherston Street $3.1 $2.9 + $0.2 Pastoral House $2.1 $2.3 Vodafone on the Quay $3.5 $3.5 + $0.1 State Insurance Tower $4.8 $3.6 + $1.2 Mayfair House $1.5 $1.4 + $0.1 80 The Terrace $1.2 $1.1 + $0.1 Deloitte House $1.9 $2.0 $0.0 Bowen Campus $3.3 $2.9 + $0.4 No 1 The Terrace $3.6 $3.2 + $0.3 Wellington total $27.5 $25.2 + $2.3 Total $62.1 $58.8 + $3.3 $m INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES ■ Overall net property income (NPI) was $3.3 million or 5.6% up ■ State Insurance Tower NPI was up $1.2 million, attributed to increased occupancy ■ HSBC House up $0.5 million reflecting leasing of vacancy on acquisition ($0.1) ($0.2) Reconciliation of movement in net property income www.precinctrightsoffer.co.nz Page 9 Taxation impacts ■ Tax expense increased by $0.9 million to $4.8 million ■ Higher tax charge: – Higher pre-tax profit – Prior period tax reduction relating to the sale of Chews Lane – Offset by feasibility deductions and prior period tax washup ■ Expectation FY15 effective tax rate will range between 12%-14% INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Tax expense reconciliation Reconciliation of tax expense Net profit before taxation $m $35.0 Less non assessable income Unrealised interest rate swap movement ($5.3) Realised gain on sale of investment property $0.2 Operating profit before Tax $40.1 Other deductible expenses Depreciation ($12.6) Other ($1.2) Feasibility deductions ($4.5) Taxable income $21.8 Prior period tax washup ($1.3) Current tax expense $4.8 Effective tax rate 12% www.precinctrightsoffer.co.nz Page 10 Balance sheet Financial Position as at Dec-2014 Jun-2014 $m Unaudited Audited D $1,641.8 m $1,632.5 m $9.3 m Deferred tax asset $2.4 m $0.9 m $1.5 m Fair value of swaps $4.3 m $6.0 m ($1.7 m) $108.0 m $108.1 m ($0.1m) $1,756.5 m $1,747.5 m $9.0 m Borrowings $579.4 m $572.0 m $7.4 m Deferred tax liability $42.3 m $42.2 m $0.1 m Fair value of swaps $12.9 m $9.4 m $3.5 m Other $12.1 m $17.1 m ($5.0 m) Total Liabilities $646.7 m $640.7 m $6.0 m $1,109.8 m $1,106.8 m $3.0 m 33.7% 33.8% (0.1%) 1059.7 m 1059.7 m $1.05 $1.04 Assets Property assets Other Total Assets Liabilities Equity Liabilities to Total Assets Shares on Issue (m) Net Tangible Asset per security INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES $0.01 www.precinctrightsoffer.co.nz Page 11 Capital management ■ Bank refinance in August delivered material savings & increased tenor ■ USPP and retail bond issues secured $173m for a term of 9.1 years – Demonstrates Precinct can access long term debt – Liquidity risks significantly lower ■ Quality of debt sources lifted to reflect the quality of assets ■ Since June 2014 the weighted average debt maturity profile has increased by 1.8 years – Resulted in no increase in overall funding cost ■ Weighted average cost of debt of 5.9%, consistent with 30 June 2014 Debt expiry profile (30 June 2014) $250 m $200 m $150 m $100 m $50 m FY15 FY16 FY17 NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES FY19 FY20 Beyond FY20 Bank debt Debt expiry profile (31 December 2014) $250 m $200 m $150 m $100 m $50 m FY15 FY16 FY17 USPP INTERIM RESULTS AND ENTITLEMENT OFFER FY18 FY18 NZ bond FY19 FY20 Beyond FY20 Bank debt www.precinctrightsoffer.co.nz Page 12 Capital management cont. ■ Non-bank borrowings provide valuable funding diversity as Precinct executes strategy – 28% of total borrowings ■ Gearing of 33.7% will reduce to: – 30% following the settlement of SAP Tower – Equity issue sees gearing fall to around 20% ■ Hedging cover of 62% will increase following sales and equity issue – c.$100 million of swaps restructured forward 2 years to match shift in funding requirements – $70 million of swaps closed out early and expensed in FY15 INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Key metrics 31 Dec 2014 Debt drawn $579m $572m Gearing - Banking Covenant 33.7% 33.8% Weighted facility expiry 4.9 yrs 3.1 yrs Weighted average debt cost (incl fees) 5.9% 6.0% Hedged 62% 67% Interest cover ratio 3.3 times 3.2 times Weighted average hedging 2.6 years 2.3 yrs $562m $482m Hedges notional value 30 June 2014 Debt Diversity Profile Dec 2014 Bank debt NZ Bond USPP June 2014 www.precinctrightsoffer.co.nz Page 13 0 Eu . Innovoiion Building Portfolio activity ■ 20 leasing transactions totalling 11,474sqm or $3.9 million in annualised rent ■ New office leases were secured at a 4.8% premium to valuation ■ Market events (leasing and reviews) compared to valuation were 5.2% up ■ Compared with previous contract rent settled market rent reviews were 6.3% higher in Auckland whilst Wellington remained flat INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Leasing Events New Leases Number Area m² Auckland 8 3,312 Wellington 7 3,202 Sub Total 15 6,514 Auckland 2 1,721 Wellington 3 3,239 Sub Total 5 4,960 Total Leasing 20 11,474 Rent Reviews Number Area m² Auckland 31 29,975 Wellington 22 12,766 Total Reviews 53 42,741 Lease Renewals and Extensions www.precinctrightsoffer.co.nz Page 15 Leasing successes ■ New Leasing transactions secured at a 6.0 year WALT ■ Regus at ANZ Centre secured December 2014 ■ Dental Council secured November 2014 at 80 The Terrace – Building now 100% occupied ■ Now only 300sqm of office vacancy in Auckland or 0.2% INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Major New leasing transactions during the six months Property Client Area m² Term years 80 The Terrace Dental Council 1,175 9.0 HSBC House Dun & Bradstreet 1,059 5.0 ANZ Centre Regus 1,054 10.0 State Insurance BNZ 1,048 3.0 Major Transactions 4,336 6.9 Other 2,177 4.0 Total New Leasing 6,514 6.0 www.precinctrightsoffer.co.nz Page 16 Portfolio metrics Lease expiry profile by Income 5.3years % of Income Weighted average lease term 98% Occupancy 11% Auckland Wellington 40% 30% 20% of Auckland portfolio has a market event in FY15 58% 10% 0% Vacant weighting to Auckland 15 16 17 18 19 20 Beyond Financial Year Occupancy INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Page 17 www.precinctrightsoffer.co.nz Page 17 Auckland CBD office market overview Forecast vacancy (CBRE, Dec 2014) Occupier Demand Supply ▲ Historically low vacancy for prime stock with strong forecasted CBD employment growth ► Stable with no core CBD office development underway in the next 2 years. Some fringe development underway Forecast net effective rent growth (CBRE, Dec 2014) Rental Growth Cap Rates ▲ Growth as face rents increase and incentive levels diminish ▼ Improving market conditions support firming of cap rates 25bps softer than 2007 peak levels INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Page 18 www.precinctrightsoffer.co.nz Page 18 Wellington CBD office market overview Forecast vacancy (CBRE, Dec 2014) ▲ Some growth in CBD employee numbers. Quality buildings expected to attract occupiers. ► Some new developments being considered albeit the required rents are 20% above market and require pre-commitments Rental Growth ► Some growth in net rentals attributable to a reduction in market operating expenses Cap Rates ► Capitalisation rates remain stable Occupier Demand Supply INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Page 19 Forecast net effective rent growth (CBRE, Dec 2014) www.precinctrightsoffer.co.nz Page 19 Section 3 Developmenf Update - 4' ,3 EastwegsiJcneWOY . Development overview ■ Developments provide the opportunity to transform the portfolio and enable Precinct to meet occupier demand for premium space ■ Targeted yield on cost ranges from mid to high 7%. Return on cost metrics determined by risk (pre-commitment levels) ■ Our approach is to minimise development risks by – Having a preference for owning yielding development opportunities – Ensuring developments are adequately pre-committed and funded – Managing construction risk through pre-construction due diligence, fixed price construction contracts and budgeting adequate contingencies ■ Precinct has secured control of strategic locations with the opportunity to develop prime CBD real estate – Prime CBD office real estate difficult to acquire ■ Macro-economic conditions support introduction of new supply – Strong population growth forecasts - supporting occupier markets ■ Construction cost inflation is a key market risk Note The information in this section is based on Precinct's current understanding of the development opportunities, and current estimates of costs and timing. It is not a guarantee of what will happen and involves known and unknown risks, uncertainties, assumptions and factors which may cause actual events to be materially different from this information. Refer also to the development risks in the appendix. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 21 Development pipeline overview Downtown project Wynyard Bowen Campus Existing net lettable area: 13,950sqm Nil 30,167sqm Acquisition (secured): 2012 2013 2012 City: Auckland Auckland Wellington Acquisition price: $91.7 million Determined on commitment $51.4 million Asset type: Income producing Development partnership Income producing Potential occupiers: Professional services / Financial / Legal Innovation Precinct (through ATEED) New Zealand Crown Expected pre-leasing: 50% (office) 50-100% 75-100% Indicative gross floor area: 73,000sqm 46,000sqm 32,000sqm Estimated incremental spend: $550m $80m (Stage 1) $110m Expected timing: 2016-2020 2015-2025 2017-2019 (see appendix for more detail) INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 22 Downtown project status ■ The Downtown development project remains on track to be a transformational project for the Precinct portfolio ■ Key milestones since previous update: – Conditional Development Agreement concluded with Auckland Transport on City Rail Link, including conditional acquisition of QE Square – Concept design complete ■ Auckland Transport (AT) is planning to start building the City Rail Link (CRL) from Britomart along Albert Street later this year INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 23 Conditional Development Agreement Approach ■ Provides Precinct with ability to proceed with development and reduces CRL costs for Auckland Transport Key Terms ■ CRL tunnel construction procured by Precinct, to Auckland Transport specifications and paid for by Auckland Transport ■ Payment to Precinct of compensation for tunnels volume and provision of East West pedestrian laneway through site - $9m ■ Payment of additional costs of office tower construction due to CRL tunnels - $10.6m ■ Improved rights over 200 carparks in Downtown Car Park out to 2099, terminable for redevelopment after 2048 ■ Remaining conditions (to be satisfied in the next 2 months) relate to approvals from Precinct’s banks and of final form of certain documents – all Precinct Board and Auckland Council approvals obtained ■ If Precinct does not proceed with the development in time to meet the CRL programme, Auckland Council may acquire the site at market value INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 24 Queen Elizabeth Square acquisition ■ Acquisition price of $27.2 million – Conditional on successful rezoning1 of land – Provides gross land area of around 1,900sqm – Settlement post – February 2018 at earliest2 ■ Provides significantly strengthened retail opportunity with 130m of Queen St frontage ■ Auckland Council will use funds to provide alternate public space ■ Agreement with Auckland Council to provide an east-west pedestrian laneway through the Downtown development, linking key transport infrastructure ■ Retail offer to increase significantly providing: – Potential to offer mini-major space to both local and international retailers – Increases length of ‘specialty runs’ in the centre – Increases critical mass through increased number of retailers Footnote 1: rezoning includes the road stopping process and effecting a plan change to allow commercial development on the site Footnote 2: rezoning condition is extendible by Precinct until 6 months after Proposed Auckland Unitary Plan becomes effective INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 25 Downtown next steps Prior to construction commitment the following milestones are required: ■ Consenting process – Resource consent – Building consent ■ Procurement of construction contract – Contractor engagement underway ■ Pre leasing for office tower required prior to approval ■ Precinct Board approval (currently expected late 2015) requires – Funding finalised – Contractor appointed – 50% pre-commitment of office tower ■ Construction commencement expected in mid 2016 INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 26 Downtown office progress Leasing update ■ Occupier demand is strong with high levels of interest from precommitment targets ■ Key pre-commitment target of 50% ■ Occupiers attracted to: – – – – Efficiency gains on new floor plate Design ambition of creating NZ’s best workplace destination Level of amenity and its waterfront location Around 10,000 workers in 5 office towers within 2 hectare block ■ Leasing of vacant space created from tower pre-commits is a priority CBD office market ■ Prime CBD Office vacancy remains close to historically low levels ■ Office based employment likely to grow on average at 2.0% per annum over the next five years ■ Increase in CBD workforce population since the GFC (+16,000 since 2010) ■ Shift in the core office CBD towards the waterfront INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 27 Downtown retail progress Leasing update ■ Presentations to potential retail clients have commenced – Positive initial responses ■ A proposed retail tenancy mix comprising of: – Number of prominent international and local mini major anchors – Mix of premium and high end apparel retailers – Attractive food and dining offer CBD retail market ■ Auckland CBD retail has experienced a significant resurgence in the past four years ■ Establishment of a collection of luxury brand retailers at the lower end of Queen Street ■ Britomart has become an established and proven retail offering ■ Topshop opening flagship store on Queen Street (under licenced arrangement) is a very positive sign, and could well be the catalyst for other global retailers INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 28 Downtown cost guidance ■ Previous guidance of $400-$500m ■ Following conclusion of concept design the revised incremental cost is estimated at $550 million ■ Incremental cost increase split between: Increased area – QE Square - Updated design and forecast cost to build out to maximise opportunity – Increase Tower net lettable area from 35,000sqm to 37,000sqm – Retail area consistent with previous guidance Cost – Better understanding of build specification and related costings – Significant construction cost escalation allowance INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 29 Wynyard Quarter status ■ Commercial terms agreed in principle for the launch of Stage 1 – Stage 1 comprises a new building for Grid AKL1 plus the refurbishment of the Mason Brothers Building – Grid AKL is the Innovation Precinct – Finalisation subject to Precinct, ATEED Board and Auckland Council governing body approvals ■ Demand for the remainder of Stage 1 is very strong with negotiations underway – Broader occupier interest in Wynyard is strong ■ Concept design completed October 2014 ■ Preliminary Design completed December 2014 – Implementation of Waterfront Auckland design requirements ■ Developed Design now underway ■ Future development potential remains Footnote 1: Grid AKL (Innovation Precinct) is an initiative of Auckland Tourism, Events and Economic Development (ATEED) and ATEED will be the lessee INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 30 Wynyard Stage 1 ■ Commercial terms agreed in principle ■ Stage 1 estimated at $80m total project cost ■ Grid AKL’s building, proposed 12 year lease over c.8,000sqm ■ Mason Brothers building, negotiation over 4,700sqm underway with potential occupiers ■ Construction expected to commence mid 2015 following finalisation of documentation Above: Innovation Building Below: Mason Brothers Key Metrics Net Lettable Area (NLA) Estimated project cost Expected Commencement Estimated Construction period Grid AKL lease term NLA Pre-commit % INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 13,200sqm $80m Mid 2015 24 months 12 years c.60% www.precinctrightsoffer.co.nz Page 31 Bowen Campus status ■ Shortlisted by the Crown as part of its Wellington office accommodation project1 – If successful likely to be predominantly precommitted by the Crown ■ Expectation successful parties will be informed late 2015 ■ Construction expected to commence Q1 2017 following vacant possession of the site ■ Works will include complete redevelopment of the existing improvements ■ The Bowen Campus precinct retains the potential for additional developable area Note 1: The Property Management Centre of Expertise (PMCoE) (hosted by the Ministry of Social Development) is running the Wellington Accommodation Project (WAP). The main goal of this project is to realise the goals of the Governments National Property Strategy. The Wellington Accommodation Project will see multiple agencies provided with accommodation solutions using a collective approach to the market. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Page 32 www.precinctrightsoffer.co.nz Page 32 Execution of 20:20 strategy ■ 20:20 Vision sees the business transformed through: – Three key developments – Continued commitment to sell non-core assets – Significant uplift in portfolio quality ■ 20:20 Vision strategy moving from establishment to execution phase Borrowing diversity and tenor – $98 million US Private Placement, $75 million retail bond issue and existing bank facilities creates a strong long term diversified borrowing platform Asset sales – $97 million sale of SAP Tower in Auckland – 80 The Terrace currently being marketed for sale Development opportunities – Development opportunities have progressed providing comfort on design, occupier demand, feasibility and capital requirements INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 34 Entitlement offer overview ■ Precinct to raise $174.1 million through an Accelerated Entitlement Offer – Precinct's largest shareholder, Haumi, has committed to take up its entitlements to maintain (but will not increase) its percentage shareholding in Precinct. – 1:7 share issue, underwritten (less Haumi’s participation) at issue price of $1.15 ■ Purpose – Precinct intends to use the net proceeds of the Offer to repay bank debt and reduce gearing – In addition to the proceeds of our anticipated non-core asset sales programme and after sourcing additional bank debt facilities in the future, we currently expect that the proceeds of the Offer should ensure we can fund our immediate development opportunities being Downtown Shopping Centre, Wynyard Stage 1 and Bowen Campus INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 35 Increased opportunity ■ Development opportunities have advanced. Key milestones: – Downtown - Development agreement signed, design significantly progressed and occupiers engaged in discussions – Wynyard – Commercial terms agreed for 8,000sqm; Stage 1 construction expected to commence in mid 2015 – Bowen Campus shortlisted ■ Overall opportunity increased by 60,000sqm of developable GFA or an estimated $280 million since September 2013 – Primarily due to Wynyard, Downtown tower scale and Queen Elizabeth Square Estimated funding capacity required Increased opportunity since September 2013 $600 m $500 m $400 m $300 m $200 m $280m $100 m Bowen Campus Downtown Shopping Centre INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Wynyard 2013 Equity issue SAP Tower Increased Opportunity www.precinctrightsoffer.co.nz Page 36 Funding bridge ■ Issue size sufficient to fund $280 million of investments in assets – Matches estimated funding gap from increased scale of opportunities ■ Current funding capacity of $200 million increases to $480 million – Gearing will reduce from 30%1 to around 20% following allotment of new shares ■ New equity provides flexibility around timing of non-core asset sales Medium term funding capacity – relative to 37.5% gearing level – example scenario Funding capacity $750 m $500 m $250 m ($250 m) Note: The graph presented above represents a hypothetical scenario only and should not be considered a budget, plan or forecast. There is no certainty that the asset sales, valuation movement, capital and development expenditure and retained earnings will occur as presented. 1 – Gearing as at 31 December 2014 was 33.7%. Following the settlement of SAP Tower gearing will fall to 30% INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 37 Equity issue rationale ■ Development opportunities have progressed providing more certainty to Precinct that a sound investment opportunity exists ■ Total development activity estimated to require around $740m over a 4-6 year period – A $174.1 million equity issue, further asset sales and new debt facilities to be secured, should ensure Precinct is fully funded to deliver the development opportunities ■ Remains committed to non-core asset sales ■ Enables portfolio transformation to be achieved ■ Entitlement offer will increase net tangible assets by 1% or 1 cps to $1.06 (31 Dec 14: $1.05) INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 38 The 20:20 pathway ■ Equity raise means gearing will reduce sooner than previously anticipated – FY15 earnings guidance of 6.1 cps – FY16 dividend expected to be maintained at 5.4 cps, fully funded from earnings ■ Longer term, the portfolio repositioning through undertaking developments and selling non-core assets is targeting delivery of the following benefits, relative to the status quo – earnings growth, which will become apparent as developments complete – growth in NTA as the value of developments on completion is expected to exceed cost – improvement in portfolio quality as demonstrated in chart below Portfolio transition 2014 20201 60% 70% Average asset age 26 years2 15 years Average quality A-Grade Premium 20% 15% Weighting to Auckland Government exposure Note 1: Management expectations based on development activity and asset disposals. Note 2: Average age as at 2020 based on the current portfolio. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 39 Offer structure - four parts Component Description Date Institutional Entitlement Offer The Joint Lead Managers will seek to approach Eligible Institutional Shareholders, who may take up all, part or none of their Entitlements. 25 – 26 February Institutional Bookbuild New Shares attributable to lapsed Entitlements of Eligible Institutional Shareholders and Ineligible Institutional Shareholders will be offered to Institutional Investors. 27 February Retail Entitlement Offer Eligible Retail Shareholders are sent an Offer Document together with a personalised Entitlement and Acceptance Form and may take up all, part or none of their Entitlements. 02 – 18 March Retail Bookbuild New Shares attributable to lapsed Entitlements of Eligible Retail Shareholders and Ineligible Retail Shareholders which will be offered to Institutional Investors. 20 March INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 40 Offer structure (continued) ■ The Offer structure has been seen previously in pro rata offers in New Zealand and is well accepted in Australia – Institutional component of the Offer (being the Institutional Entitlement Offer and the Institutional Bookbuild) is accelerated and occurs over three days immediately after the Offer is announced – No trading of Entitlements – Entitlements not taken up or attributable to ineligible shareholders will be offered to Institutional Investors through bookbuilds – Any premium achieved above the application price for the New Shares in the bookbuilds will be shared pro rata (with no brokerage costs deducted) between those shareholders who do not take up their entitlements or who are ineligible to do so ■ There will be a bookbuild for the Institutional Entitlement Offer (with any premium shared pro rata by eligible institutional shareholders not taking up all their entitlements and ineligible institutional shareholders) and a separate bookbuild for the Retail Entitlement Offer (with any premium shared pro rata by eligible retail shareholders not taking up all their entitlements and ineligible retail shareholders). The premium achieved, if any, in one bookbuild may be different from any premium achieved in the other INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 41 Offer terms Entitlement Ratio 1 for 7 Maximum New Shares to be Issued 151.4 million Application Price NZ$1.15 Discount to last close price1 (NZ 1.225) (6.1%) Discount to theoretical ex-Entitlements price2 (5.4%) Total equity raised NZ$174.1 million Ranking Equally with Existing Shares. New Shares will be entitled to any second-quarter dividend paid Eligible Shareholders Institutional Entitlement Offer – open only to Institutional Investors who are a Shareholders with a registered address in New Zealand, Australia and other jurisdictions as described in the Offer Document as at 5.00pm on the Record Date Retail Entitlement Offer – open only to Shareholders with a registered address in New Zealand or Australia as at 5.00pm on the Record Date and who are not Institutional Investors Broker stamping fees 1 24 0.5% (capped at NZ$300 per Shareholder) for each stamped acceptance form from NZX Firms (subject to a maximum aggregate stamped acceptances of NZ$100,000) February 2015 theoretical ex-Entitlements price of $1.216 is calculated based on Precinct’s closing price on 24 February 2015 of NZ$1.225 2 The INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 42 Offer timetable Results and intention to raise capital 25 February 2015 Institutional Entitlement Offer Trading halt commences and Institutional Entitlement Offer opens 25 February 2015 Institutional Entitlement Offer closes 26 February 2015 Institutional Bookbuild 27 February 2015 Trading halt lifted 02 March 2015 Settlement of Institutional Entitlement Offer and Institutional Bookbuild and commencement of trading of allotted New Shares on the NZX Main Board 04 March 2015 Retail Entitlement Offer Record Date 27 February 2015 Expected despatch of this Offer Document and Entitlement and Acceptance Forms 02 March 2015 Retail Entitlement Offer opens 02 March 2015 Retail Entitlement Offer closes 18 March 2015 Retail Bookbuild (Trading Halt) 20 March 2015 Settlement of Retail Entitlement Offer and Retail Bookbuild and commencement of trading of allotted New Shares on the NZX Main Board 25 March 2015 INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 43 Conclusion and outlook ■ Transformation of Precinct and execution of strategy underway; – Sale of SAP Tower, – Borrowing diversity and tenor, – Progressing developments, with Wynyard Stage 1 expected to commence mid 2015 ■ $174.1 million equity issue plus debt matches the estimated increase in opportunity ■ Pro forma 31 December 2014 gearing reduces from 30% to 20% ■ Precinct remains committed to non-core asset sales ■ FY15 earnings guidance of 6.1cps (pre performance fees) and dividend of 5.4 cps INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 44 5m .. I. ll 5-. Appendices ff. Wynyard Site plan Stage 1 Building 5A (GridAKL) Future stages Mason Brothers INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 46 Auckland Downtown area INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 47 Development risks ■ Development projects are inherently subject to uncertainties as they are entered into on the basis of assumed future costs, values and income levels. Actual outcomes may vary from those assumptions, and development risks are risks that could adversely impact the cost, value and/or income levels at the completion of a property development project ■ Key factors that may cause changes to the assumptions made by Precinct are: – Project delays and holding cost risks, – Any difficulties in securing the additional debt facilities required for the development projects on acceptable terms, – Any difficulties in securing the construction contractors required for the development projects on acceptable terms, – Any difficulties in selling non-core assets in time to assist with the required funding for the development projects, and at an acceptable price, and – Changes in the broader investment market. ■ Other factors that may cause outcomes to be different from Precinct’s assumptions include: – Contractor counterparty and receivership risk, changes in exchange rates, overall design and viability risk, contractor shortages, unforeseen development costs, industrial disputes, insufficient project governance, planning disputes and delays, insufficient human resource, labour and material shortages, development funding risk, economic environment, adverse changes in credit market conditions, regulatory environment, adverse weather conditions and natural disasters, the local property market. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 48 Auckland Property Portfolio Page 49 01. 02. 03. 04. (Sold settlement Feb 2015) 05. 06. PwC Tower Occupancy 99% WALT 5.3 years Clients PwC, Buddle Findlay, Hesketh Henry, Jones Lang LaSalle ANZ Centre Occupancy 100% WALT 10.8 years Clients ANZ National Bank, Chapman Tripp, Mighty River Power, Vero, First NZ Capital AMP Centre Occupancy 100% WALT 5.3 years Clients AMP Financial Services, Aon, AJ Park, QBE Insurance, Southern Cross, Thales New Zealand SAP Tower Occupancy 99% WALT 3.7 years Clients SAP, Marsh, Colliers International Zurich House Occupancy 100% WALT 4.4 years Clients Zurich, Willis New Zealand, CBRE, NZ Funds Management, Guardians of NZ Superannuation Downtown Shopping Centre Occupancy 96% WALT 1.6 years Clients The Warehouse, Burger King, McDonald's, ASB Quay Street, Auckland Albert Street, Auckland Customs Street West, Auckland Queen Street, Auckland Queen Street, Auckland Customs Street West, Auckland The PricewaterhouseCoopers Tower is one of New Zealand’s most sought after office addresses. Completed in 2002 with state-ofthe-art building technology, the 29-level tower is set in a first-class location in Auckland’s waterfront precinct and features some of the country’s largest floor plates, a hotel-style lobby and high-speed lifts, along with 11 retail premises and 358 car parks. Topped by a unique geodesic dome, the ANZ Centre is one of New Zealand’s tallest and most recognisable buildings at 39 levels, occupying a key site on Auckland’s Albert Street. It features a distinctive polished Spanish granite façade and full-height windows, providing generous natural light and expansive views of Auckland city and the Waitemata Harbour. The ANZ Centre has undergone a major upgrade. The AMP Centre is a 25-level building with excellent views to Viaduct Harbour and the Hauraki Gulf. It occupies a prominent site adjoining the PwC Tower in Auckland’s waterfront precinct, and has large flexible plates, making it attractive to organisations requiring extensive areas of efficient working space. Located in the heart of Auckland’s Queen Street, this prime office building comprises 21 levels of high-quality office accommodation, as well as two levels of retail and a health club that includes a tennis court and swimming pool. SAP Tower was built in 1989 to a striking design, and its distinctive architecture has made it an Auckland landmark. The building’s rectangular shape, together with the positioning of the service core, provides a high level of flexibility of use. Zurich House was redeveloped by Precinct to a 5-Star Green Star rating, achieved by incorporating highly innovative energy-efficient and environmentally-friendly materials while recycling some of the existing building structure and using sustainable business practices. The building features 15 levels of high-quality office accommodation, with a twostorey entrance gallery and lobby. The entire façade of Zurich House is clad in energy-efficient glazing to maximise natural light. First opened in 1975, the Downtown Shopping Centre has a land area of approximately 6,500 square metres and existing resource consent for a 71,000 sqm (GFA) mixed-use office and retail development. With excellent access to public transport and positioned by Auckland’s waterfront, this property has to be one of New Zealand’s best long term investment opportunities. Jones Lang LaSalle Valuation As at 30 June 2014 $263.0 million Total NLA 31,296 sqm Typical Office Floor 1,350 sqm CBRE Valuation As at 30 June 2014 $256.0 million Total NLA 33,351 sqm Typical Office Floor 1,000 sqm Jones Lang LaSalle Valuation As at 30 June 2014 $122.4 million Total NLA 25,265 sqm Typical Office Floor 1,097 sqm CBRE Valuation As at 30 June 2014 $95.6 million Total NLA 17,630 sqm Typical Office Floor 762 sqm Colliers International Valuation As at 30 June 2014 $91.5 million Total NLA 14,445 sqm Typical Office Floor 912 sqm CBRE Valuation As at 30 June 2014 $101.0 million Total NLA 13,950 sqm INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 49 Auckland Property Portfolio Page 50 07. HSBC House Occupancy 100% WALT 3.8 years Clients HSBC Bank, NZTA Limited, Baldwins Limited, Auckland Transport Queen Street, Auckland HSBC House comprises a 21 level commercial office tower situated on a prime waterfront CBD site. This is a landmark building occupying one of the most prominent and sought after positions in the Auckland CBD. The building enjoys excellent natural light on all sides together with virtually uninterrupted harbour views. CBRE Valuation As at 30 June 2014 $108.0 million Total NLA 19,2224 sqm Typical Office Floor 1,060 sqm INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 50 Wellington Property Portfolio Page 51 01. 02. 03. 04. 05. 06. State Insurance Tower Occupancy 97% WALT 5.1 years Clients IAG, Air New Zealand, AJ Park, Buddle Findlay, Hudson Global Resources Vodafone on the Quay Occupancy 82% WALT 4.2 years Clients Vodafone, Russell McVeagh, Microsoft, Fonterra, Rabobank No. 1 The Terrace Occupancy 100% WALT 7.6 years1 Clients The Treasury, Ministry of Health, Parliamentary Services 171 Featherston Street Occupancy 100% WALT 6.7 years Clients Bell Gully, First NZ Capital, Cameron & Partners, ANZ 125 The Terrace Occupancy 98% WALT 4.6 years Clients Minter Ellison Rudd Watts, New Zealand Qualifications Authority, Canadian High Commission Pastoral House Occupancy 100% WALT 2.2 years Clients Ministry of Primary Industries, Bank of New Zealand Willis Street, Wellington Lambton Quay Street, Wellington The Terrace, Wellington Featherston Street, Wellington The Terrace, Wellington The Terrace, Wellington One of New Zealand’s best-known office buildings, located in the corporate precinct of the Wellington CBD, State Insurance Tower was completed in 1984. The building is adjacent to Willis Street and Lambton Quay and is a short stroll from Frank Kitts Park and the Wellington harbour waterfront. The office floors enjoy excellent harbour views and natural sunlight from all cardinal points. The property also offers one level of street-level retail, one-and-ahalf levels of car parking and an enclosed subterranean retail level. Vodafone on the Quay is a landmark property in the heart of Wellington fronting Midland Park. The building has a distinctive presence on Lambton Quay, with its integrated architectural styles and green-tinted glazing. Vodafone on the Quay is close to the Courts, Parliament and Treasury. The office floors have panoramic views of the harbour and inner city, and provide column-free office space and efficient floor layouts. No. 1 The Terrace occupies the prestigious corner location of The Terrace and Bowen Street in Wellington, in the heart of the parliamentary precinct. After redevelopment in 2006, it is an 18-level building with an adjoining low-rise annex featuring some of the largest CBD floor plates in New Zealand. 171 Featherston Street is the office tower component of a 26-level dual office/hotel complex occupying a key Wellington waterfront location, with uninterrupted views of the harbour. The office tower comprises the upper 13 levels, the three basement levels of car parks and part of the ground floor. The building features distinctive bronze-tinted glass cladding and strong vertical lines and offers a premium Wellington business address. 125 The Terrace is in the heart of Wellington’s central business and retail district and enjoys some of the region’s highest measured pedestrian traffic flows. The building comprises 13 levels of prime office accommodation, two levels of retail and four levels of car parks. The blue laminated reflective glass and distinctive blue granite exterior finishes merge to create an attractive landmark that provides some of Wellington’s best-appointed office accommodation. Pastoral House is an 18-level Agrade building comprising 17 levels of office accommodation and one ground floor retail level. It has dual frontages to The Terrace and Lambton Quay, and offers easy access to Government departments, Parliament and transport hubs. The property has an excellent aspect with harbour views and the Lambton Quay frontage enjoys good retail pedestrian exposure. Precinct completed a refurbishment of Pastoral House in 2005. Bayleys Valuation As at 30 June 2014 $75.8 million Total NLA 11,352 sqm Typical Office Floor 915 sqm CBRE Valuation As at 30 June 2014 $63.8 million Total NLA 12,069 sqm Typical Office Floor 869 sqm CBRE Valuation As at 30 June 2014 $49.5 million Total NLA 15,522 sqm Typical Office Floor 800 sqm Note 1: Includes No.3 The Terrace. No.3 The Terrace relates to the freehold title in respect to Precinct’s leasehold interest. Colliers International Valuation As at 30 June 2014 $136.7 million Total NLA 26,641 sqm Typical Office Floor 1,050 sqm Bayleys Valuation As at 30 June 2014 $108.0 million Total NLA 16,756 sqm Typical Office Floor 1,001 sqm INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Colliers International Valuation As at 30 June 2014 $72.5 million Total NLA 18,851 sqm Tower 768 sqm, Podium 2,080 sqm www.precinctrightsoffer.co.nz Page 51 Wellington Property Portfolio Page 52 07. 08. 09. 10. 05. 06. Bowen Campus Occupancy 100% WALT 1.8 years Clients Ministry of Social Development Deloitte House Occupancy 99% WALT 2.9 years Clients Deloitte, Medsafe, Real Estate Agents Authority Mayfair House Occupancy 100% WALT 4.4 years Clients Department of Corrections 80 The Terrace Occupancy 100% WALT 5.5 years Clients New Zealand Fire Service, Transport Accident and Investigation Commission, NZ Medical, AECOM PwC Tower Occupancy 87% WALT 6 years Clients PwC, Buddle Findlay, Hesketh Henry, Jones Land LaSalle PwC Tower Occupancy 87% WALT 6 years Clients PwC, Buddle Findlay, Hesketh Henry, Jones Land LaSalle Bowen Street, Wellington Featherston Street, Wellington The Terrace, Wellington The Terrace, Wellington Quay Street, Auckland Quay Street, Auckland Bowen Campus encompasses approximately one hectare of land and is situated in the heart of the parliamentary precinct next to the Beehive. This includes the 10storey Bowen State Building and the 15-storey Charles Fergusson Tower which were built between the early 1960s and mid-1970s. The property offers a redevelopment opportunity with resource consent currently in place for 60,000 sqm of office space. Deloitte House is located in the heart of the Wellington corporate precinct and enjoys triple frontages to Brandon and Featherston Streets and Customhouse Quay. Originally built in 1983, the building was extended and refurbished in 2005/07 and now comprises 16 office floors, ground floor retail and a basement car parking level. There is good natural light for all levels and unobstructed harbour views from level five and above. Mayfair House was constructed in 1986. It is well-located, enjoying a favourable aspect at the northern end of The Terrace, close to the parliamentary precinct and close to key Government departments. It comprises 13 office floors, being some of the largest and most efficient plate sizes in the area. The property includes 251 car parks. 80 The Terrace is located on The Terrace, conveniently positioned near Government offices, car parks, bus and rail transport links, with nearby on- and off-ramps to the urban motorway. The set-back frontage and motorway to the rear ensure good natural light to all levels and harbour views from the upper floors. Completed in 1987, the building comprises 14 levels of office accommodation on top of four levels(eight split levels) of car parks. The PricewaterhouseCoopers Tower is one of New Zealand’s most sought after office addresses. Completed in 2002 with state-ofthe-art building technology, the 29-level tower is set in a first-class location in Auckland’s waterfront precinct and features some of the country’s largest floor plates, a hotel-style lobby and high-speed lifts, along with 11 retail premises and 358 car parks. The PricewaterhouseCoopers Tower is one of New Zealand’s most sought after office addresses. Completed in 2002 with state-ofthe-art building technology, the 29-level tower is set in a first-class location in Auckland’s waterfront precinct and features some of the country’s largest floor plates, a hotel-style lobby and high-speed lifts, along with 11 retail premises and 358 car parks. Colliers International Valuation As at 30 June 2014 $49.0 million Total NLA 30,167 sqm BS 1,485 sqm, CFT 802 sqm Colliers International Valuation As at 30 June 2014 $50.6 million Total NLA 12,972 sqm Typical Office Floor 775 sqm CBRE Valuation As at 30 June 2014 $37.5 million Total NLA 12,332 sqm Typical Office Floor 1,100 sqm Colliers International Valuation As at 30 June 2014 $36.6 million Total NLA 10,682 sqm Typical Office Floor 780 sqm CBRE Valuation As at 30 June 2012 $222.4 million Total NLA 31,314 sqm Typical Office Floor 1,350 sqm CBRE Valuation As at 30 June 2012 $222.4 million Total NLA 31,314 sqm Typical Office Floor 1,350 sqm INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 52 Disclaimer International selling restrictions This presentation does not constitute an offer of entitlements or New Shares of Precinct in any jurisdiction in which it would be unlawful. In particular, this presentation may not be distributed to any person, and the entitlements and New Shares may not be offered or sold, in any country outside New Zealand except to the extent permitted below. Australia This document and the offer of New Shares are only made available in Australia to persons to whom an offer of securities can be made without disclosure in accordance with applicable exemptions in sections 708(8) (sophisticated investors) or 708(11) (professional investors) of the Australian Corporations Act 2001 (the “Corporations Act”). This document is not a prospectus, product disclosure statement or any other formal “disclosure document” for the purposes of Australian law and is not required to, and does not, contain all the information which would be required in a "disclosure document" under Australian law. This document has not been and will not be lodged or registered with the Australian Securities & Investments Commission or the Australian Securities Exchange and the issuer is not subject to the continuous disclosure requirements that apply in Australia. Prospective investors should not construe anything in this document as legal, business or tax advice nor as financial product advice for the purposes of Chapter 7 of the Corporations Act. Investors in Australia should be aware that the offer of New Shares for resale in Australia within 12 months of their issue may, under section 707(3) of the Corporations Act, require disclosure to investors under Part 6D.2 if none of the exemptions in section 708 of the Corporations Act apply to the re-sale. Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the "SFO"). No action has been taken in Hong Kong to authorise or register this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the New Shares have not been and will not be offered or sold in Hong Kong other than to "professional investors" (as defined in the SFO). No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors (as defined in the SFO and any rules made under that ordinance). No person allotted New Shares may sell, or offer to sell, such securities in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such securities. The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you should obtain independent professional advice. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 53 Disclaimer Japan The New Shares have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the "FIEL") pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the New Shares may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires New Shares may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of New Shares is conditional upon the execution of an agreement to that effect. Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA. This document has been given to you on the basis that you are (i) an existing holder of the Company's shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined in section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this document immediately. You may not forward or circulate this document to any other person in Singapore. Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly. United Arab Emirates Neither this document nor the New Shares have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or any other governmental authority in the United Arab Emirates, nor has the Company received authorization or licensing from the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or any other governmental authority in the United Arab Emirates to market or sell the New Shares within the United Arab Emirates. No marketing of any financial products or services may be made from within the United Arab Emirates and no subscription to any financial products or services may be consummated within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services relating to the New Shares, including the receipt of applications and/or the allotment or redemption of New Shares, may be rendered within the United Arab Emirates by the Company. No offer or invitation to subscribe for New Shares is valid in, or permitted from any person in, the Dubai International Financial Centre. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 54 Disclaimer United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA")) has been published or is intended to be published in respect of the New Shares. This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the New Shares may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connecti on with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to the Company. In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. United States This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Any securities described in this document have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws. INTERIM RESULTS AND ENTITLEMENT OFFER NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES www.precinctrightsoffer.co.nz Page 55