Stride Property Group (NS) Annual Results For the year ended 31 March 2018 30 May 2018
Agenda and Contents Page Welcome Highlights 3 Strategy 5 Philip Littlewood Chief Executive Officer Financial Performance 10 Capital Management 15 Jennifer Whooley Chief Financial Officer Portfolio Overview 18 REIM Business 23 Philip Littlewood Chief Executive Officer Conclusion 26 Appendices 28 2
Highlights 3
Highlights On 10 June 2016, Stride Property Limited (SPL) issued an Explanatory Memorandum as a part of its restructuring into a stapled group. The following is a comparison of the prospective financial information in the Explanatory Memorandum to Stride Property Group s actual results for the year ended 31 March 2018 (FY18) Distributable profit 1 after current income tax of 10.63 cps, up on forecast Financial Performance Net rental income of $57.6m ($58.2m) Management fees income (incl SPL fees) of $21.0m, up Management fee income of $21.0m ($18.8m) (incl SPL fees) Corporate expenses of $13.8m ($13.1m) Profit before other income and income tax of $40.7m ($41.3m) on forecast Profit after income tax of $95.3m ($35.7m) Distributable profit 1 after current income tax of $38.8m or 10.63cps ($38.1m or 10.44cps) Combined 9.91cps cash dividend for Stride Property Group (Stride) for FY18 Profit after income tax of $95.3m, up Dividend Reinvestment Plan remains suspended on forecast 1. Distributable profit is a non-gaap financial measure adopted by Stride Property Group (Stride) to assist Stride and investors in assessing Stride s profit available for distribution. It is defined as net profit/(loss) before income tax, adjusted for non-recurring and/or non-cash items, share of profits in associates, dividends received from associates and current tax. Further information, including the calculation of distributable profit and the adjustments to net profit before income tax, is set out in note 8 of the consolidated financial statements for the year ended 31 March 2018. 4
Strategy Vision To be the best performing listed real estate investment and management company in New Zealand Strategy Stride is developing a real estate investment management (REIM) business for the long term, with each step towards growth deliberate and carefully considered We use our expertise to invest in and manage quality real estate portfolios that attract the highest demand and deliver market-leading returns to our investors We believe that by creating value for our investors we will continue to create sustainable growth opportunities for Stride s shareholders Strategic pillars 5
Delivery of Strategy (Compared to Prospective Financial Information for FY18 figures in brackets) Our commitment Net property valuation increase 1 We target investments that show high, long-term demand with consistently strong returns We will continue to grow our high performing and sustainable investment management business NTA per share Our delivery Net 5.6% investment property portfolio valuation increase¹, taking SPL s loan to value ratio (LVR) to 34.1% 2 Net Tangible Assets (NTA) backing per share to $1.82 (excludes value of management contracts) Profit after income tax of $95.3m ($35.7m), up $59.6m Distributable profit after current income tax of $38.8m or 10.63cps ($38.1m or 10.44cps) up $0.7m or 0.19cps Management fee income grown to $21.0m, including SPL fees, ($18.8m), compared with $13.1m for FY17 Profit after income tax Management fee income (incl SPL fees) 1. Investment property portfolio valuation increase excludes $0.8m arising from the elimination of the development fees charged by SIML to SPL and includes $9.5m fair value uplift from the restructure of the Bunnings leases. The investment property portfolio excludes the valuation of NorthWest Two, which is classified as inventory in the financial statements. As at 31 March 2017, the investment property portfolio was valued at $859m. 2. The LVR calculation includes the value of inventory of $36.3m in the value of properties and ignores the value of the investments in the managed funds. 6
Delivery of Strategy Appointment of new Chief Executive Officer Philip Littlewood Appointment of new Director Philip Ling Our commitment We are committed to building our capability to deliver a full range of services from asset management to property development, from finance to corporate services and investment management Our delivery Appointment of new Chief Executive Officer Philip Littlewood Appointment of new Director Philip Ling Development team Led by Mark Luker Corporate Services team Led by Louise Hill Newly established Development team, led by Mark Luker, with overall responsibility for property development across all property sectors Newly established Corporate Services team, led by Louise Hill, with responsibility for governance, compliance, risk, health and safety and in-house legal 7
Delivery of Strategy (Prior period FY17 for SPL figures in brackets) 15 Rockridge Avenue, Auckland Our commitment We leverage our investment management, development and leasing expertise to select property investments that deliver market leading returns Our delivery Divestments - three Bunnings operated properties sold to Investore Property Limited for $78.5m, following a lease restructure, equating to a $9.5m fair value uplift on 31 March 2017 values, including associated costs and incentives Developments 15 Rockridge Ave, Auckland - 9,000m2 new warehouse completed at a yield on cost of 7.1% (including land) 11 Springs Road, Auckland - New $43m facility with 25-year lease to Waste Management at an initial net rental of $3.9m pa. Possible expansion of scope of works by up to $23m with associated increase in rental. Completion targeted for second half of 2019 calendar year Leasing 282 lease transactions over 267,320m2 for a total annual rental of $54.8m, taking FY19 lease expiries to 8.7% and FY20 lease expiries to 10.1% of the portfolio contract rental1 Occupancy at 96.7% (96.8%). Subsequent to balance date, portfolio occupancy increased to 98.8% Weighted average lease term of 5.1 years (4.9 years) Retail Sales - total sales at NorthWest Shopping Centre and NorthWest Two increased by +14.4%2, with specialty sales3 alone increasing by +13.5% to $8,075 pm2. Total sales4 at Silverdale Centre increased by +4.4% 11 Springs Road, Auckland 1. Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL by that tenant under the terms of the relevant lease as at 31 March 2018, annualised for the 12 month period on the basis of the occupancy level for the relevant property as at 31 March 2018, and assuming no default by the tenant. 2. Total retail sales is the annual sales on a rolling 12-month basis (excluding GST). 3. Like-for-like specialty sales only includes sales from those tenancies who have traded for the past 24 months and includes commercial services categories. 4. Sales data is not collected for all tenants at Silverdale Shopping Centre. Some tenants are not obliged to provide sales data under the terms of their lease. 8
Delivery of Strategy Portfolio valuation owned and managed properties as at 31 March 2018 Our commitment We create and manage sustainable, single sector focused investment products for our investors We co-invest in our products to ensure we have a long-term alignment with our investors Our success is aligned to the success of our products Our delivery Portfolio composition by value 1 Net rental income of $44.5m, up $0.6m on forecast 2 Profit after income tax $46.2m, up $27.0m on forecast 2 $100m six year Bond issued at 4.40% in April 2018 Disposed of two assets for $32.6m, 11% premium to book value Successful delivery of H&M development at Queensgate, on time and on budget Significant development pipeline, including Queensgate rebuild 335 leasing transactions completed reflecting an increase of +13.0% over previous rentals 39 leasing transactions completed reflecting an increase of +2.7% over previous rentals 1. Includes NorthWest Two, Auckland, which is classified as inventory in the consolidated financial statements. 2. Values above are calculated based on the audited numbers in the financial statements for 2018 and the forecast numbers contained in the Product Disclosure Statement issued by Investore Property Limited (Investore) on 10 June 2016 and associated information published on the online register maintained by the Companies Office and the Registrar of Financial Service Providers on 10 June 2016 in connection with Investore s initial public offering. 9
Financial Performance 10
Financial Performance Stride Property Group - Consolidated 2018 Actual $m 2018 Prospective Base Case $m Change $m % Net rental income 57.6 58.2 (0.6) (0.9) Management fee income 13.3 12.9 +0.4 +3.0 Corporate expenses (13.8) (13.1) (0.7) (5.3) Profit before net finance expenses, other income and income tax 57.1 57.9 (0.9) (1.5) Net finance expenses (16.3) (16.6) +0.3 +1.8 Profit before other income and income tax (refer Appendix 2) 40.7 41.3 (0.6) (1.4) Other income 1 60.1 5.0 +55.1 +1,110.7 Profit before income tax 100.8 46.3 +54.5 +117.9 Income tax expense (5.5) (10.6) +5.0 +47.7 Profit after income tax attributable to shareholders 95.3 35.7 +59.6 +167.0 Values in the table above are calculated based on the numbers in the financial statements for each respective financial year and may not sum accurately due to rounding. On 10 June 2016, SPL issued an Explanatory Memorandum for the purposes of a special meeting of shareholders. The table above and the tables on pages 12-13 are a comparison of the prospective financial information in the Explanatory Memorandum to Stride Property Group s actual results for the year ended 31 March 2018. 1. Actual 31 March 2018, other income includes net change in fair value of investment properties of $48.3m. Prospective Financial Statements, other income includes net change in fair value of investment properties of $1.1m. 11
Distributable Profit 1 Stride Property Group - Consolidated 2018 Actual $m 2018 Prospective Base Case $m Change $m % Profit before income tax 100.8 46.3 +54.5 +117.9 Non-recurring and non-cash adjustments: - Net change in fair value of investment properties (48.3) (1.1) (47.2) (4,129.3) - Share of profit in associates (9.4) (3.8) (5.6) (147.2) - Dividend income from associates 4.3 3.9 +0.4 +9.8 - Net rent free incentives (0.1) 0.2 (0.3) (132.6) - Net lease contribution incentives 0.5 0.5 - (6.8) - Spreading of fixed rental income amortisation - 0.5 (0.5) (102.2) - Share based payment expense 0.5 0.6 (0.1) (16.6) - Depreciation and amortisation expense 0.3 0.2 0.1 65.8 - Refinancing cost amortisation 0.1 0.1 - - - Fee income 1.2-1.2 100.0 - Other income insurance recoveries (1.6) - (1.6) (100.0) Distributable profit before current income tax 48.4 47.4 +1.0 +2.1 Current tax expense (9.6) (9.3) (0.3) (3.2) Distributable profit after current income tax 38.8 38.1 +0.7 +1.9 Basic distributable profit after current income tax per share - weighted 10.63cps 10.44cps Weighted average number of shares (million) 365.0 364. Values in the table above are calculated based on the numbers in the financial statements and Prospective Financial Statements and may not sum accurately due to rounding. 1. Distributable profit is a non-gaap financial measure adopted by Stride to assist Stride and investors in assessing Stride s profit available for distribution. It is defined as net profit/(loss) before income tax, adjusted for nonrecurring and/or non-cash items, share of profits in associates, dividends received from associates and current tax. Further information, including the calculation of distributable profit and the adjustments to net profit before income tax, is set out in note 8 of the financial statements for the year ended 31 March 2018. 12
AFFO Distributable Profit Stride Property Group - Consolidated 2018 Actual $m 2018 Prospective Base Case $m Change $m % Distributable profit after current income tax 38.8 38.1 +0.7 +1.9 Adjustments to funds from operations: - Maintenance capital expenditure (5.5) (4.0) (1.5) (36.5) Adjusted Funds From Operations (AFFO) 33.3 34.0 (0.8) (2.2) AFFO basic distributable profit after current income tax per share - weighted 9.12cps 9.33cps Values in the table above are calculated based on the numbers in the financial statements and Prospective Financial Statements and may not sum accurately due to rounding. 13
Financial Summary Stride Property Group - Consolidated As at 31 Mar 18 As at 31 Mar 17 Property value 1 ($m) 902.2 895.3 Bank debt drawn ($m) 307.7 347.5 Bank loan to value ratio 2 (LVR) 34.1% 38.8% Equity ($m) 667.1 607.9 Shares on issue (million) 365.0 364.9 NTA per share (refer Appendix 2) $1.82 $1.67 Adjusted NTA per share 3 $1.84 $1.68 1. Includes NorthWest Two, Auckland, which is classified as inventory in the financial statements. 2. The LVR calculation includes the value of inventory of $36.3m in the value of properties and ignores the value of the investments in the managed funds. 3. Excludes the after tax fair value of interest rate derivatives. 14
Capital Management 15
Capital Management Debt Facilities Stride Property Limited Key Transactions: Debt facilities As at 31 Mar18 As at 31 Mar17 Lease incentive - $18m paid to Bunnings ($13m net of tax) Disposals - Three Bunnings operated properties to Investore for $78.5m (pre disposal costs) Bank facility limit (ANZ, BNZ, CBA, Westpac) $400m $400m Bank debt drawn $308m $348m Weighted maturity of facility 2.2 years 3.2 years Debt covenants Debt maturity profile $240m $200m $160m LVR (Bank Debt / Property Values 1 ) Covenant: 50% ICR (EBIT / Interest and Financing Costs) Covenant: 1.75 x Weighted Average Lease Term 2 Covenant: > 3.0 years 34.1% 38.8% 3.1x 2.9x 4.9 years 4.8 years $120m $80m $40m - $200m $200m Bank Facility: $92m of banking facility headroom as at 31 March 2018 Bank debt refinancing is planned to occur during FY19 1. The LVR calculation includes the value of inventory of $36.3m in the value of properties and ignores the value of the investments in the managed funds. 2. The Weighted Average Lease Term in a property or portfolio, assuming it is fully leased. This is weighted by the income applicable to each lease and a current market rental with nil term for vacant space. 16
Capital Management Cost of Debt Stride Property Limited Key Transactions: Expired hedging - $85m swaps, with rates ranging from 3.3% - 5.0% Post balance date $100m of swaps terminated, with average 2.8 years duration and an average rate of 4.1%, for a cost of $4.0m New $120m swaps entered into with average 5.2 years duration and an average rate of 2.8% Cost of debt Weighted average cost of debt (incl. margins & line fees) Weighted average interest rate on current swaps (excl. margins & line fees) Weighted average hedging duration (incl. forward starting swaps) As at 31 Mar 18 As at 31 Mar17 5.04% 4.85% 3.84% 3.96% 2.7 years 2.7 years % of drawn debt hedged 83% 75% Hedging profile 1 $300m 4.50% $250m $200m $150m $100m $50m 4.00% 3.50% 3.00% 2.50% Notional value of active swaps Notional value of active swaps as at 30 April 2018 Weighted average interest rate on active swaps (excl. margin and line fees) Weighted average as at 30 April 2018-31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22 31-Mar-23 2.00% 1. Due to the material change to Stride s hedging profile post balance date, the above chart has been updated to illustrate Stride s revised interest rate hedging profile from 30 April 2018 onwards. 17
Portfolio Overview 18
Portfolio Summary Stride Property Limited Overview As at 31 Mar 18 As at 31 Mar 17 Properties (no.) 26 29 Lease expiry profile 2 by Contract Rental 1 Tenants (no.) 379 380 Net Lettable Area (m 2 ) 251,953 304,714 WALT (years) 5.1 4.9 Occupancy Rate (by area) 96.7% 96.8% Portfolio Valuation 3 ($m) 902.2 895.3m Portfolio location by Contract Rental 1 1. Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL by that tenant under the terms of the relevant lease as at 31 March 2018, annualised for the 12 month period on the basis of the occupancy level for the relevant property as at 31 March 2018, and assuming no default by the tenant. 2. Represents the scheduled expiry for each lease, excluding any rights of renewal that may be granted under each lease, for the entire portfolio as at 31 March 2018, as a percentage of Contract Rental. 3. Includes NorthWest Two, Auckland, which is classified as inventory in the financial statements. 19
Major Lease Transactions Completed Stride Property Limited Tenant Property Lease Commencement Area (m 2 ) Term (years) Annual Contract Rental 1 ($000) Tasman Liquor Company 22 Ha Crescent, Auckland July 2018 8,757 3 795 Checkpoint NZ 15 Rockridge Avenue, Auckland August 2018 3,505 10 505 Bed Bath & Beyond 61 Silverdale Street, Auckland May 2018 2 684 6 283 AMP Capital Investors 33 Customhouse Quay, Wellington May 2018 782 8 375 New Zealand Post 15 Ride Way, Auckland September 2017 6,027 6 644 Westpac (NZ) Investments 1 Grey Street, Wellington May 2018 1,096 9 322 3 National Glass 8 Reg Savory Place, Auckland September 2017 4,025 6 490 Meridian 33 Customhouse Quay, Wellington September 2019 2,933 12 1,301 Jacobs New Zealand 1 Grey Street, Wellington August 2018 1,584 7 578 SIML completed 282 lease transactions for SPL during FY18: 217 rent reviews over 178,276m 2 for a total annual rental of $39.8m; 33 lease renewals over 27,172m 2 for a total annual rental of $4.9m; and 32 new lettings completed over 61,872m 2 for a total annual rental of $10.2m. 1. Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL by that tenant under the terms of the relevant lease as at 31 March 2018, annualised for the 12 month period on the basis of the occupancy level for the relevant property as at 31 March 2018, and assuming no default by the tenant. 2. Subject to completion of landlord works. 3. Rental still subject to review. 20 2 0
Remaining Lease Expiries FY19 & FY20 Stride Property Limited FY19 Property Tenant Net Lettable Area (m 2 ) % of Contract Rental 1 Johnsonville Shopping Centre (50%), Wellington Various 3,163 1.72 1 Grey Street, Wellington Westpac (NZ) Investments 1,586 0.97 7-9 Fanshawe Street, Auckland IAG 667 0.43 460 Rosebank Road, Auckland DHL 2,617 0.34 Silverdale Shopping Centre, Auckland North Beach 629 0.32 Balance 8,739 4.90 Total 17,403 8.68 As at 31 March 2018, 8.68% of Contract Rental 1 expiries remain in FY19 (8.72% as at 31 March 2017). FY20 Property Tenant Net Lettable Area (m 2 ) % of Contract Rental 1 30 Airpark Drive, Auckland DHL 13,733 2.18 80 Greys Avenue, Auckland DDB NZ 3,653 1.77 Johnsonville Shopping Centre (50%), Wellington Various 1,972 1.04 25 O'Rorke Road, Auckland AA Insurance 1,716 0.42 33 Customhouse Quay, Wellington Wagamama 320 0.36 Balance 6,837 4.29 Total 28,231 10.05 As at 31 March 2018, 10.05% of Contract Rental 1 expiries remain in FY20 (17.48% as at 31 March 2017). Totals may not sum accurately due to rounding. 1. Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to SPL by that tenant under the terms of the relevant lease as at 31 March 2018, annualised for the 12 month period on the basis of the occupancy level for the relevant property as at 31 March 2018, and assuming no default by the tenant. 21
Portfolio Occupancy 96.7% (by area) Stride Property Limited Post balance date, remaining vacancy at 15 Rockridge Avenue, Auckland, was leased increasing portfolio occupancy to 98.8% Property Occupancy (%) 31 Mar 18 Vacancy (m 2 ) 31 Mar 18 Total Area (m 2 ) 31 Mar 18 Occupancy (%) 31 Mar 17 21-25 Teed Street, Auckland 97.9 86 4,090 97.9 22 The Terrace, Wellington 100.0-4,781 100.0 Other 100.0-39,766 100.0 Office Total 99.8 86 48,637 99.8 460 Rosebank Road, Auckland 100.0-12,265 45.8 15 Rockridge Avenue, Auckland 39.0 5,486 8,991 n/a Other 100.0-79,595 100.0 Industrial Total 94.6 5,486 100,852 94.1 Corner Mt Wellington Highway & Penrose Road, Auckland 97.1 259 9,011 96.7 Johnsonville Shopping Centre (50%), Wellington 90.3 675 6,924 96.1 61 Silverdale Street, Auckland 98.9 244 22,951 99.1 65 Chapel Street, Tauranga 100.0-16,592 100.0 NorthWest Shopping Centre, Auckland 96.2 1,040 27,465 99.2 NorthWest Two, Auckland 92.0 636 7,920 73.0 Retail Total 96.9 2,854 90,864 96.6 Large Format Retail Total 100.0-11,601 100.0 Total 96.7 8,426 251,953 96.8 Totals in the table above may not sum accurately due to rounding. 22
REIM Business 23
Portfolio Valuation: Owned and Managed Properties Value of Investment Properties 1 Number of Investment Properties Investment in Managed Entities $902m 2 26 3 $738m 40 19.9% held by SPL $538m 4 3 2.0% held by SPL Total $2,178m 69 3 1. Independent valuations as at 31 March 2018. 2. Includes NorthWest Two, Auckland, which is classified as inventory in the financial statements. 3. Includes Johnsonville Shopping Centre, Wellington, which is owned 50/50 by SPL and Diversified NZ Property Trust. 24
REIM Fee Income Investor alignment The performance of Stride s investment management business is highly aligned with the investors in each of SIML s managed products. The performance of Stride s investment management business is derived from three main sources: Underlying performance of the managed products, including return on investment from SPL holding in each product, and performance fees Activity based SIML fee revenue income, primarily driven from capital and leasing activity Base fee revenue, aligned to the size of the underlying business Real estate investment management fee income ($m) Managed Portfolios composition by value 1 1. Independent valuations as at 31 March 2018. 25
Conclusion 26
Conclusion (Compared to Prospective Financial Information for FY18 figures in brackets) Execution of strategy Significant steps have been taken around Stride s four strategic pillars of Performance, People, Places and Products REIM platform well established Execution of strategy across four P s Performance, People, Places, Product Outperformance of distributable profit after current income tax of $38.8m or 10.63cps ($38.1m or 10.44cps) Combined 9.91cps cash dividend for Stride Property Group for FY18 Looking ahead Stride has made a strong start in its first two years of operations Over time, seeking to establish a group of sector-specific commercial property products, with Stride co-investing Over the short to medium term, Stride will look to use its balance sheet to acquire assets that may ultimately be used in the establishment of these products Targeting a combined 9.91cps cash dividend for Stride Property Group for FY19 REIM platform established Targeting a combined cash dividend for Stride Property Group for FY19 of 27
Appendices 28
Appendix 1 31 Mar 18 Revaluation Revaluation Market Cap Market Cap Stride Property Limited Valuation Movement 1 Movement 1 Rate 2018 Rate 2017 Address City $m % $m % % 33 Corinthian Drive Auckland 47.4 1.2 0.5 6.30 6.30 7-9 Fanshawe Street Auckland 9.8 (20.3) (1.9) 10.25 10.50 80 Greys Avenue Auckland 19.7 (1.5) (0.3) 7.00 7.13 21-25 Teed Street Auckland 21.7 2.1 0.4 7.00 6.88 35 Teed Street Auckland 21.1 3.5 0.7 6.25 6.50 33 Customhouse Quay Wellington 33.9 1.7 0.5 6.75 7.25 1 Grey Street Wellington 52.8 6.0 3.0 7.50 7.75 22 The Terrace Wellington 17.3 8.9 1.4 7.88 8.25 OFFICE TOTAL 223.6 2.0 4.4 7.07 7.26 30 Airpark Drive Auckland 22.6 3.5 0.8 6.63 6.75 22 Ha Crescent Auckland 13.6 28.0 3.0 6.13 6.65 8 Reg Savory Place Auckland 7.7 16.6 1.1 6.00 6.63 20 Rockridge Avenue Auckland 14.7 4.2 0.6 6.63 6.75 460 Rosebank Road Auckland 16.1 3.8 0.6 6.88 7.50 25 O'Rorke Road Auckland 64.0 9.6 5.9 5.88 6.09 415 East Tamaki Road Auckland 17.1 2.0 0.3 6.38 6.38 15 Ride Way Auckland 11.2 12.7 1.3 5.75 6.25 34 Airpark Drive Auckland 7.2 6.9 0.5 4.88 5.00 15 Rockridge Avenue Auckland 21.5 167.9 4.2 5.63 n/a INDUSTRIAL TOTAL 195.7 11.0 18.2 6.10 6.41 Cnr Mt Wellington Highway & Penrose Road Auckland 36.3 (3.0) (1.1) 6.75 6.75 Johnsonville Retail Wellington 30.7 0.2 0.1 7.75 7.05 Silverdale Retail Centre Auckland 98.4 9.3 8.4 6.50 6.75 65 Chapel Street Tauranga 41.5 1.8 0.7 7.63 7.63 NorthWest Shopping Centre Auckland 176.0 0.5 0.9 6.38 6.38 NorthWest Two Auckland 36.3 n/a n/a n/a n/a RETAIL TOTAL 419.1 2.4 9.1 6.69 6.70 1.Revaluation movement includes capital expenditure, capitalised lease incentives and fixed rental income. It excludes $0.8m arising from the elimination of the development fees charged by SIML to SPL. 2.Total revaluation movement calculation excludes the value of NorthWest Two, which is classified as inventory in the financial statements. As at 31 March 2017, the portfolio was valued at $895.3m. 3.Totals in the table may not sum accurately due to rounding. 4.This calculation excludes land and development. 2 Carr Road Auckland 42.8 15.5 5.7 5.13 5.50 BULK RETAIL TOTAL 42.8 15.5 5.7 5.13 5.50 11 Springs Road Auckland 21.1 6.0 1.2 n/a 7.75 LAND/DEVELOPMENT TOTAL 21.1 6.0 1.2 n/a 7.75 TOTAL PORTFOLIO (as at 31 March 2018) 902.2 4.8 2 38.6 2 6.57 4 6.76 Bunnings portfolio six month revaluation movement n/a 0.5 0.3 n/a n/a Fair value uplift from restructure of Bunnings leases n/a 18.6 9.5 n/a n/a TOTAL PORTFOLIO (incl disposals during the year) 5.6 2 48.3 2 29 29
Appendix 2 Profit before Other Income and Income Tax $4.7m $0.5m $3.5m $40.7m $34.1m ($0.4m) $0.1m ($1.8m) Year ending 31 Mar 2017 Net rental loss from divestments Net rental increase from existing portfolio Increase in management fee income Lower net finance expense Higher corporate expenses One-off project costs incurred FY17 Year ending 31 Mar 2018 65 $62.6m Net Contract Rental 60 55 ($4.6m) $1.6m ($0.9m) $1.0m $0.5m ($2.1m) $0.2m ($1.3m) ($0.3m) $56.7m 50 45 40 As at 31 Mar 2017 Disposals New leases and renewals Expiries Rent reviews Development completion Transfer to development 30 30 Casual leasing Non-recoverable ground rental Other nonrecoverable opex As at 31 Mar 2018
Appendix 2 (continued) Investment Properties (excludes the value of inventory of $36.3m) $859.0m $18.0m $48.3m $866.0m $18.6m $0.5m ($78.4m) As at 31 Mar 2017 Lease restructure expenditure Disposals Capital expenditure, lease incentives & fixed rental income amortisation Transfers from work in progress Net change in fair value As at 31 Mar 2018 $0.13 NTA per share $0.11 ($0.02) ($0.10) $ 0.02 $0.01 $1.82 $1.67 As at 31 Mar 2017 Operating profit before tax Net change in fair value of investment properties Income tax expense Dividends paid Share of profit in associate Other income - insurance recoveries As at 31 Mar 2018 31 31
Thank you Important Notice: The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the performance of Stride Property Group for the year ended 31 March 2018. Please refer to Stride Property Group s Annual Report 2018 for further information in relation to the year ended 31 March 2018. The information in this presentation does not purport to be a complete description of Stride Property Group. In making an investment decision, investors must rely on their own examination of Stride Property Group, including the merits and risks involved. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any acquisition of securities. No representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates or opinions or other information contained in this presentation, any of which may change without notice. To the maximum extent permitted by law, each of Stride Property Limited, Stride Investment Management Limited (together, the Stride Property Group) and their respective directors, officers, employees, agents and advisers disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence on the part of Stride Property Group, its directors, officers, employees and agents) for any direct or indirect loss or damage which may be suffered by any recipient through use of or reliance on anything contained in, or omitted from, this presentation. This presentation is not a product disclosure statement or other disclosure document. Level 12, 34 Shortland Street Auckland 1010, New Zealand PO Box 6320, Wellesley Street Auckland 1141, New Zealand P +64 9 912 2690 W strideproperty.co.nz