Stride Property Group · NZX:SPG
Stride Property — DNZ Property Fund — H1 FY2011 Earnings Presentation
27 slides from Stride Property's earnings presentation, Nov 11, 2010
Slide 1: DNZ Property Fund Limited Interim Results FY11
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Slide 2: Contents
2 Contents Overview Financial Performance Capital Management Property Portfolio Outlook
Slide 3: DNZ Property Fund Limited Interim Results FY11
DNZ PROPERTY FUND LIMITED INTERIM RESULTS FY11
Slide 4: Overview
4 Overview Successful IPO and capital raise of $45 million NZX listing on 16 August 2010 Positive share price growth September quarter cash dividend of 2 cents in line with previous guidance Completion of the asset sales programme Solid portfolio performance 105 lease transactions completed WALT of
Slide 5: Financial Performance
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Slide 6: Financial Performance
6 Financial Performance Distributable profit $9.8m Net profit before one off items and tax $8.1m Net loss after tax $112.8m Listed PIE from 1 July 2010 resulting in a deferred tax liability of $86.3m One off payment for termination of management contract $31.8m September quarter cash dividend confir
Slide 7: Financial Performance
7 Financial Performance 30 Sept 10 30 Sept 09 Period Ended ($ millions) ($ millions) Net rental income 25.9 27.8 Management fee income 0.3 - Loss on disposal of investment properties (0.2) (0.1) Corporate expenses (30 Sept 2010 includes corporate overheads, CEO option scheme, IPO and restructure cos
Slide 8: Distributable Profit
8 Distributable Profit 30 Sept 10 30 Sept 09 Period Ended ($ millions) ($ millions) Net loss before tax (26.0) (11.0) NZ IFRS and other adjustments - Termination payment for manager 31.8 - - Impairment of fixed life intangible 3.6 0.2 - Net change in fair value of Investment Property (0.1) 23.4 - Ne
Slide 9: Financial Summary
9 Financial Summary 30 Sept 10 30 Sept 09 As at ($ millions) ($ millions) Property Values 669.6 729.9 Bank Debt 291.1 347.3 1 Bank Loan to Value Ratio 43.9% 48.7% Shareholder Equity 314.3 389.6 Shares on Issue 244.9 471.2 2 NTA Backing per Share $1.28 $0.82 3 2 IFRS Adjusted NTA Backing per Share $1
Slide 10: Capital Management
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Slide 11: Capital Management
11 Capital Management Renegotiated debt facilities to 30 September 2013 $45 million capital raise $150m of swaps entered into during the period Asset sales programme completed $31.3m gross 7-19 Croftfield Lane, Auckland ($7.85m) Cnr Cambridge Terrace & Hollands Crescent, Lower Hutt ($8.35m) 266 High
Slide 12: Banking
12 Banking DNZ well within banking covenants Loan to value ratio 43.9% Interest times cover ratio 2.08x $150m of swaps entered into during the period (including $40m forward swap starting Feb 2011) New swaps terms of 3-4 years New swaps hedged at an average rate of 4.22% (excluding margin and line f
Slide 13: Banking Covenants
13 Banking Covenants As at Covenant Covenant 30 Sept 2010 Gearing Ratio (Bank Debt / Property Values) < 50% 43.9% Interest Cover Ratio > 1.75 x 2.08x (EBIT / Interest and Financing Costs) Fully Leased Unexpired Term > 3.5 years 4.16 years
Slide 14: Property Portfolio
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Slide 15: Portfolio Summary
15 Portfolio Summary Properties 54 Tenants 279 Net Lettable Area (sqm) 379,934m2 Net Contract Rental $55.7m WALT (years) 4.40 Occupancy rate (by area) 96.1% Portfolio Value $669.6m Note: Portfolio Summary excludes O’Rorke Rd Laminex Development
Slide 16: Portfolio Overview
16 Portfolio Overview Portfolio occupancy 96.1% Portfolio underpinned by WALT of 4.4 years Strong portfolio performance Rent reviews 53 rent reviews over 109,013m2 for a total rental of $18.1m, of the remaining 55 rent reviews to be concluded prior to 31 March 2011, 24 are CPI based, 28 are market r
Slide 17: Diversified Portfolio
Diversified Portfolio Bulk Retail 20% Retail 15% Industrial 25% Fund Sector Diversification (by Contract Rental) Fund Location Diversification (by Contract Rental) South Island 5% Auckland North Island 40% 23% Wellington 32%
Slide 18: Top 10 Tenants
Top 10 Tenants 10% ES 9%] 8.60% c Zz 8% b & 7% 7.09% S 6% 5.67% g 5% 4.70% {4% ‘6 ® 39 3.33% 3.23% 3.05% 2.99% 8 2.31% 2.22% © 2% : 1% ee acs mn Al ee 2 Ae a d ) "4. Hn Da oD 0% ti . S PR\2 oe (So ew > oo = ao ee ee) we wr oe
Slide 19: Major Lease Transactions
19 Major Lease Transactions Contract Tenant Area m2 Term Rental New Leases Fletcher Steel, Penrose 5,978 9 years $477,000 Reyrolle Pacific Switchgear, Lower Hutt 3,978 6 Years $439,048 Beam Global, Newmarket 818 6 Years $276,009 Colorite, Auckland 2,271 6 Years $321,000 Renewals Briscoes, Tauranga 2
Slide 20: Lease Expiry Profile
20 Lease Expiry Profile Management is addressing the major lease expiries in 2012
Slide 21: Development
21 Development Development activity is only undertaken with appropriate levels of risk mitigation Tenant pre-commitment Appropriate investment returns Less than 2% of the total portfolio value is represented by development land (Penrose and Tauranga)
Slide 22: Fletcher Building Laminex Group
22 Fletcher Building Laminex Group The new 12,000m² warehouse and 1,800m² office building are nearing completion at O’Rorke Rd in Penrose consolidating Laminex Group’s operations Practical completion scheduled for 19 November 2010 New 12 year lease commencing from this date
Slide 23: Fletcher Building Laminex Group
23 Fletcher Building Laminex Group Built by Fletcher Construction three weeks ahead of schedule Various design/build opportunities for the residual 2.28 hectares of the site
Slide 24: Property Market Overview
24 Property Market Overview The office market remains the most challenging of the property sectors Auckland high level of quality surplus office space Wellington market continues to feature the government sector centralising Despite the challenging retail climate proactive leasing strategies are mai
Slide 25: Outlook
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Slide 26: Outlook
26 Outlook Maintain high occupancy levels Prudent capital expenditure Value add opportunities Identify low risk design/build opportunities within portfolio Recycling of assets Maintain earnings per share
Slide 27: DNZ Property Fund Limited contact and important notice
Property » DNZ Property Fund Limited Level 4, 80 Greys Avenue Auckland 1010 HAN K Y | | PO Box 6320, Wellesley Street, Auckland Tel: +64 9912 2690 Fax: +649 912 2693 Important Notice: This presentation has been prepared by DNZ Property Fund Limited. The details in this presentation provide general i