Annual Results For the year ended 31 March 2016 Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 26 May 2016 Agenda & Contents Page Tim Storey – Chairman Welcome Peter Alexander – Chief Executive Highlights 3 Financial Performance 6 Capital Management 10 Portfolio Overview 12 Development Projects 17 Acquisitions 19 Strategy Overview & Proposed Restructure 21 Tim Storey – Chairman Conclusion 26 Peter Alexander – Chief Executive Appendices 28 Jennifer Whooley – Chief Financial Officer Peter Alexander – Chief Executive Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 2 Highlights Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 3 Highlights (Prior period 31 March 2015 figures in brackets) Financial Performance • Net rental income of $69.3m ($57.2m) • Corporate expenses of $8.4m ($6.1m) • Operating profit before other income and income tax of $44.7m ($39.6m) • Net profit after income tax of $92.4m ($68.8m) • Distributable profit¹ before income tax of $46.3m ($40.3m) • Distributable profit after income tax of $37.1m or 11.22 cps ($32.1m or 10.80 cps) • 10.75 cps cash dividend for the year ended 31 March 2016 (FY16) • • 2.75 cps cash dividend for the fourth quarter with 0.3555 cps imputation credits attached • Dividend Reinvestment Plan remains suspended for FY16 fourth quarter dividend Loan to value ratio (LVR) 41.7% (35.1% as at 31 March 2015) Net profit after income tax 2 Distributable profit after income tax FY16 annual cash dividend 10.75 cps +34.2% +15.6% +4.9% Distributable profit is a non-GAAP financial measure adopted by Stride Property Limited (Stride) to assist Stride and investors in assessing Stride’s profit available for distribution. It is defined as a net profit/(loss) before income tax adjusted for non-recurring and/or non-cash items and current tax. Further information, including the calculation of distributable profit and the adjustments to net profit after income tax, is set out in note 6 to the audited financial statements for the year ended 31 March 2016. 2 Net profit after income tax includes net change in fair value of investment properties of $59.9m. 1 Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 4 Highlights (Prior period 31 March 2015 figures in brackets) Portfolio • • • • • • • Net 5.2% property portfolio valuation increase¹ Net Tangible Assets (NTA) backing per share increased to $1.97 ($1.81) 200 lease transactions over 278,075m2 for a total annual rental of $44.3m FY17 lease expiries down from 13.04% (31 March 2015) to 4.78% of the portfolio contract rental² FY18 lease expiries at 9.99% of the portfolio contract rental Occupancy at 99.6% (96.6%) Weighted Average Lease Term (WALT) 7.9 years (5.1 years) Net valuation increase +5.2% Developments and Divestments • • • • NorthWest Shopping Centre opened 1 October 2015 NorthWest Two development on track to be completed by October 2016 Divested 51 Corinthian Drive, Auckland, for $15.2m & 170-180 Taradale Road, Napier, for $4.3m Unconditional on sale of 20-22 Pollen Street, Auckland, for $8m and Lot 83 Tauriko Industrial Estate, Tauranga, for $0.5m Acquisitions • • • Raised $115m through placement to eligible shareholders and investors & $15m through SPP Additional bank facility tranche of $160m for a 3 year term REIM Growth • • 1 Oct 2015 Acquired 35 Teed Street, Auckland, for $17m Acquired 19 Large Format Retail properties for $287m Capital Management • NorthWest Shopping Centre opened 19 Large Format Retail properties acquisition Diversified NZ Property Fund, managed by Stride, to acquire two shopping centres in a restructured fund resulting in an increased fund size of $550m (+$445m) Proposal to create a new stapled shareholding structure to enable growth 1 The valuations of all properties disposed of during the 12 months from 1 April 2015 have been disregarded in this calculation. As at 31 March 2015, the portfolio was valued at $872.4 million. ² Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to Stride by that tenant under the terms of the relevant lease as at 31 March 2016, annualised for the 12 month period on the basis of the occupancy level for the relevant property as at 31 March 2016, and assuming no default by the tenant. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 5 Financial Performance Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 6 Financial Performance Consolidated Group Change Actual 31 Mar 2016 ($ millions) Actual 31 Mar 2015 ($ millions) $ millions % 69.3 57.2 12.0 21.0 1.8 1.5 0.3 23.7 Corporate expenses (8.4) (6.1) (2.3) (36.8) Operating profit before net finance expenses, other income and income tax 62.7 52.6 10.1 19.3 (18.0) (13.0) (5.0) (38.2) Operating profit before other income and income tax (refer Appendix 1) 44.7 39.6 5.2 13.1 Other income1 57.5 37.7 19.8 52.4 Net profit before income tax 102.2 77.3 24.9 32.3 Income tax expense (9.8) (8.5) (1.4) (16.2) Net profit after income tax attributable to shareholders 92.4 68.8 23.6 34.2 Net rental income Management fee income Net finance expenses 1 Actual 31 March 2016, other income includes net change in fair value of investment properties of $59.9m and impairment of intangible asset ($3.0m) Actual 31 March 2015, other income included net change in fair value of investment properties of $38.4m Values in the table above are calculated based on the numbers in the financial statements for each respective financial year and may not sum accurately due to rounding. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 7 Distributable Profit Consolidated Group Change Actual 31 Mar 2016 ($ millions) Actual 31 Mar 2015 ($ millions) $ millions % 102.2 77.3 24.9 32.3 (59.9) (38.4) (21.5) (55.9) (0.3) 0.2 (0.5) (204.9) 3.0 0.0 3.0 100.0 (0.3) 0.5 (0.8) (168.0) - Net rent free incentives 0.1 - - 48.6 - Net lease contribution incentives 0.2 0.1 0.1 149.0 - Fixed rental income 0.7 0.4 0.2 53.8 - Other adjustments 0.6 0.1 0.5 409.5 Distributable profit before income tax 46.3 40.3 6.1 15.1 Less: current tax expense (9.2) (8.1) (1.1) (13.0) Distributable profit after income tax 37.1 32.1 5.0 15.6 11.22 cps 10.80 cps 330.8 297.2 Net profit before income tax NZ IFRS and other adjustments: - Net change in fair value of investment properties - Net change in fair value of other investments - Impairment of intangible asset - (Gain) / loss on disposal of investment properties Basic distributable profit after income tax per share - weighted Weighted average number of shares (millions) 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 a net profit/(loss) before income tax adjusted for non-recurring and/or non-cash items 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 6 to the audited financial statements for the year ended 31 March 2016. 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. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 8 Financial Summary As at 31 Mar 2016 As at 31 Mar 2015 1,274.8 872.4 532.2 305.9 41.7% 35.1% Equity ($ millions) 719.4 541.5 Shares on issue (millions) 364.4 297.2 NTA per share1 (refer Appendix 2) $1.97 $1.81 Adjusted NTA per share2 $2.00 $1.82 Property value ($ millions) (refer Appendix 1) Bank debt drawn ($ millions) Bank loan to value ratio 1 2 Excludes intangibles. Excludes intangibles and the after tax fair value of interest rate derivatives. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 9 Capital Management Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 10 Capital Management Loan to Value Ratio (Bank Debt / Property Values) Interest Cover Ratio (EBIT / Interest and Financing Costs) Fully Leased Unexpired Term1 Covenant As at 31 Mar 2016 ≤ 50% 41.7% ≥ 1.75 x 3.01x > 3.0 years 7.9 years - Raised $115m through placement to eligible shareholders and investors As at 31 Mar 2016 As at 31 Mar 2015 Bank facility limit (ANZ, BNZ, CBA, Westpac) $560m $400m Bank debt drawn $532m $306m Weighted average cost of debt (incl. margins & line fees) 4.72% 5.60% Weighted average interest rate on current swaps (excl. margins & line fees) 3.86% 4.28% Weighted maturity of facility 2.6 years 3.6 years Weighted average hedging duration (incl. forward starting swaps) 3.1 years 2.9 years 65% 74% - Raised $15m through Share Purchase Plan - Additional bank facility tranche of $160m for a 3 year term % of drawn debt hedged 1 The unexpired leased term in a property or portfolio, assuming the property or portfolio is fully leased. This is weighted by the income applicable to each lease and a current market rental with nil term for vacant space. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 11 Portfolio Overview Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 12 Portfolio Summary Overview As at 31 Mar 2016 As at 31 Mar 2015 Properties 59 41 415 281 432,337 334,694 7.9 5.1 99.6% 96.6% $1,274.8m $872.4m Tenants Net Lettable Area (m2) WALT (years) Occupancy Rate (by area) Lease Expiry Profile2 Portfolio Value As at 31 March 2016 (by contract rental1) Top Ten Tenants3 As at 31 March 2016 (by contract rental1) Portfolio by Location Portfolio by Sector As at 31 March 2016 As at 31 March 2016 1 Contract Rental is the amount of rent payable by each tenant, plus other amounts payable to Stride by that tenant under the terms of the relevant lease as at 31 March 2016, annualised for the 12 month period on the basis of the occupancy level for the relevant property as at 31 March 2016, and assuming no default by the tenant. 2 Based on Contract Rental for all properties leased to individual tenants and their affiliates as at 31 March 2016. The numbers on each bar represent the number of properties leased by the tenant. 3 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 2016, as a percentage of Contract Rental. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 13 Major Lease Transactions Completed Annual Contract Rental ($000) Commencement Area (m2) Term (years) 33 Corinthian Drive, Auckland Oct-16 10,936 9 2,800 The Warehouse 35 MacLaggan Street, Dunedin Aug-15 6,433 6 819 Tasman Liquor Company 22 Ha Crescent, Auckland Jul-15 8,757 3 727 Fletchers 650 Great South Road, Auckland Aug-15 1,311 10 months 435 NZ Post 65 Chapel Street, Tauranga Apr-15 2,947 6 417 Northern Regional Alliance 650 Great South Road, Auckland Apr-16 1,271 3 367 IPFX 7-9 Fanshawe Street, Auckland May-16 744 4 293 Research & Education Advanced Network 22 The Terrace, Auckland Apr-16 517 6 189 Perdana Holdings (PappaRich) 1 Grey Street, Wellington Apr-16 263 10 158 Tenant Property ASB Stride completed 200 lease transactions during the year ended 31 March 2016 • 118 rent reviews over 226,152m2 for a total annual rental of $32.85m • 46 lease renewals over 33,284m2 for a total annual rental of $7.8m • 36 new lettings completed over 18,639m2 for a total annual rental of $3.6m Stride Property Limited — Annual Interim Results Presentation for the six yearmonths ended ended 31 March 30 September 2016 – 30 May 2015 2016 – 12 November 2015 14 Remaining Lease Expiries FY17 & FY18 FY17 Property Tenant Net Lettable Area (m2) % of Contract Rental Johnsonville Shopping Centre, Wellington Various 3,003 1.39 460 Rosebank Road, Auckland Croxley 12,263 0.94 20-22 Pollen Street, Auckland (sold – settlement due 18/08/2016) Colorite 2,271 0.46 650 Great South Road, Auckland Fletchers 1,311 0.47 4,254 1.52 23,102 4.78 Balance As at 31 March 2016, 4.78% of contract rental expiries remained in FY17 (13.04% as at 31 March 2015). FY18 Net Lettable Area (m2) % of Contract Rental NZ Wines 21,349 2.06 Cnr Te Irirangi Dr & Bishop Dunn Place, Auckland Mitre 10 12,124 1.62 20 Rockridge Ave, Auckland NZ Merchants 10,239 0.90 650 Great South Road, Auckland IRD 2,093 0.64 15 Ride Way, Auckland Express Couriers Limited 6,027 0.64 8 Reg Savory Place, Auckland National Glass 4,025 0.51 22 The Terrace, Wellington Department of Internal Affairs 1,077 0.38 12,992 3.24 69,926 9.99 Property Tenant 11 Springs Road, Auckland Balance As at 31 March 2016, 9.99% of contract rental expiries remain in FY18 (16.03% as at 31 March 2015). Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 15 Portfolio Occupancy 99.6% (by area) Occupancy (%) 31 Mar 2016 Vacancy (m2) 31 Mar 2016 Total Area (m2) 31 Mar 2016 Occupancy (%) 31 Mar 2015 650 Great South Road, Auckland 100.0 - 8,335 84.3 1 Grey Street, Wellington 100.0 - 10,472 98.2 22 The Terrace, Wellington 91.1. 425 4,780 89.2 Other 100.0 - 33,394 100.0 99.1 425 48,646 96.5 22 Ha Crescent, Auckland 100.0 - 8,757 - Other 100.0 - 104,450 100.0 Industrial Total 100.0 - 113,207 92.5 Cnr Mt Wellington Highway & Penrose Road, Auckland 98.9 69 9,011 100.0 Johnsonville Shopping Centre, Wellington 98.2 127 6,972 98.4 61 Silverdale Street, Auckland 99.8 51 22,961 99.8 65 Chapel Street, Tauranga 99.6 59 16,290 98.7 NorthWest Shopping Centre, Auckland 98.0 559 27,531 N/A Retail Total 98.9 892 82,766 98.8 100.0 - 168,993 100.0 Total Investment Properties 99.7 1,317 413,612 96.6 Total Non Current Assets held for sale 98.0 378 18,726 Total Portfolio 99.6 1,695 432,337 Property Office Total Large Format Retail Total 96.6 Totals in the table above may not sum accurately due to rounding. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 16 Development Projects Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 17 Development Projects NorthWest Shopping Centre NorthWest Two • Opened 1 October 2015 • Due to open by October 2016 • GFA 34,000m² / NLA 27,000m² • Will comprise four separate buildings offering 7,700m² of retail, dining • Features 100 retail stores, 1,100 car parks, a 8,000m² Farmers flagship store and a 4,200m² Countdown supermarket • Value at 31 March 2016, $175m Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 and office space • 100% of the food & beverage space and 51% of office accommodation committed 18 Acquisitions Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 19 Acquisitions 35 Teed St, Auckland Antipodean Portfolio • Purchase price of $17.0m, providing a yield of 7.0% • Settled 30 June 2015 catchment areas with exposure to the non-discretionary take-home food, • Occupies a high profile site on the corner of Teed Street and packaged liquor and groceries sector Gillies Avenue, and is located immediately adjacent to Stride’s • • Nationwide portfolio of 19 Large Format Retail properties in strong High quality tenant in General Distributors Limited, the operator of property at 25 Teed Street Countdown supermarkets in New Zealand and an ultimate subsidiary of • Eight year lease to Heartland with fixed reviews Woolworths Limited¹ accounts for 96% of gross portfolio income² • Provides opportunities to add value over the medium to long term • Long WALT of 18 years • These properties deliver very dependable income streams, an aggregate of $18.7m net passing yield³, due to the long lease term and the creditworthiness of the tenant • Limited on-going incentives and associated re-leasing costs • Nationally recognised tenant and long-term WALT supports higher leverage at a lower cost of capital • Settled in November 2015 1 General Distributors Limited is a subsidiary of Progressive Enterprise Limited, which is a subsidiary of Woolworths Limited. The remaining gross income is comprised of The Warehouse (3%) and a restaurant and bar (1%). 3 Excluding life-cycle costs. 2 Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 20 Strategy Overview & Proposed Restructure Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 21 Strategy Overview Investment Strategy • Stride is building a portfolio of places with enduring demand, that attract the highest demand in all market conditions, because it meets the needs of our customers, their staff, their visitors and our customers’ customers. • Stride identifies attributes that drive strong investment performance from investment property. Those attributes vary depending on the sector and the market, but it is a combination of accessibility, amenity, functionality and a value proposition that is compelling. • Stride owns a portfolio diversified across the three core property sectors - office, retail and industrial. Each sector has slightly different fundamentals, and investing across all three sectors allows Stride to diversify exposure to a wider cross section of the economy, to different property market supply cycles and provides flexibility to invest in a range of opportunities in a tightly held market. • Within the bounds of our adopted strategy, we will continue to take development opportunities which are well founded and can be completed with an adequate/acceptable risk/return profile. • In order to deliver on our strategy, we are focused on developing and applying our expertise in four core competencies: • • • • Stock Selection Capital Management Informed Decision-making Skilful Management Real Estate Investment Management Strategy • Stride is the manager of Diversified NZ Property Fund Limited. This entity has entered into an agreement to acquire the Westfield Queensgate Shopping Centre, Wellington, and the Westfield Chartwell Shopping Centre, Hamilton, for $445 million. The acquisition is subject to the approval of the Overseas Investment Office. Settlement is expected to occur in a restructured investment vehicle, which will continue to comprise the existing investors and be managed by Stride. • The acquisition of the 19 Large Format Retail properties adds to Stride’s investment portfolio, and provides scale and opportunity for Stride to further its strategy to grow its Real Estate Investment Management business. Stride sees this portfolio as an opportunity to establish a new, specialist investment product with a higher than average leverage and income yield. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 22 Proposed Restructure Stride is pleased to announce its plan to progress a proposal to create a new stapled shareholding structure What is the purpose? • The intention of the proposed restructuring is to: • Provide greater flexibility for its investment structure and facilitate and enable growth in its real estate investment management (“REIM”) business • Ensure Stride is “fit for purpose” to deliver on its strategy, while retaining its PIE status • Stride is considering the potential to establish a specialist investment vehicle focused on Large Format Retail properties where Stride would retain the management rights. If this were progressed, the restructuring is necessary to ensure Stride retains its PIE status What is the proposal? • The proposal involves separating Stride’s REIM business from its property ownership business • Stride would retain the property investment portfolio • The REIM business that was transferred to the subsidiary Stride Investment Management Limited (“SIML”) on 30 April 2016 would be separated • SIML shares would be distributed to Stride shareholders on a 1:1 basis and would be “attached” to a Stride share to create a “stapled” structure. This structure is similar to the Stapled Structures of real estate companies in Australia • Stride will enter into a management agreement for SIML to manage Stride’s property portfolio What approvals are required? • In order to implement the structure, Stride will seek shareholder approval to amend Stride’s constitution (by special resolution) at a shareholder’s meeting to be scheduled in due course • • The Board will provide shareholders with more details in the coming weeks Stride has sought and received an IRD binding ruling that the proposed stapling of Stride (PIE) to SIML (non-PIE) is not a tax avoidance arrangement to circumvent loss of PIE status for Stride Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 23 Overview of Proposed Stapled Structure • Stride shareholders will receive 1 SIML share for every 1 Stride share they hold • The below structure provides an illustrative example of the changes that would occur to the shareholding of a shareholder with 1,000 shares Current shareholding Shareholding following proposed restructuring NZX Listing NZX Listing 1,000 Shares 1,000 Shares Shares stapled and transferable together 1 1,000 Shares Stapled structure The Group holding all of Stride’s properties and REIM business Stride Property REIM business (SIML) 1 REIM business (SIML) Property owning company holding all of Stride’s properties “PIE” “PIE” Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 Management contract REIM business managing Stride properties and other property portfolios “NON - PIE” 24 What are the practical impacts of the Stapling structure? • Under the restructuring, shareholders will retain existing Stride shares and receive the same number of shares in SIML and retain the same proportionate interest in the Stapled Group as they currently have in Stride • Stride shareholders will continue to own Stride and SIML as a stapled security • The key effect of Stapling is that Stride shares will not be able to be transferred without a corresponding transfer of the SIML shares to which they are stapled (and vice versa) • Stapling will not affect: • Shareholders’ rights to receive distributions from Stride and SIML • The right to share equally in the proceeds of Stride or SIML if either is liquidated • Shareholders’ rights to vote as a holder of Stride shares or SIML shares, as the case may be • No consideration is required to be paid or provided by shareholders under the distribution (i.e., SIML shares will be distributed to shareholders for free). No New Zealand tax consequences are expected as a result of the distribution on the basis Stride is a listed PIE • Any future dividends received from Stride will continue to receive PIE tax treatment, so investors should see no difference in the tax treatment of their Stride shares • Any future dividends received from SIML will be taxable to NZ investors at their marginal tax rates, with a credit for any imputation credits attached to, or withholding tax deducted on, the dividends • An Explanatory Memorandum (EM) will be released to shareholders within the next month. The EM will provide detail around the proposal and dates for approvals and implementations • The board of directors for SIML will be the same as for Stride Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 25 Conclusion Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 26 Conclusion Execution of Strategy • A 4.9% increase in annual cash dividend from 10.25 cps for FY15 to 10.75 cps for FY16 • NorthWest Shopping Centre opened 1 October 2015 • NorthWest Two development on track to be completed by October 2016 • Capital raising initiatives undertaken for the acquisition of 19 Large Format Retail properties (Antipodean portfolio) • Revenue from NorthWest Shopping Centre and the Antipodean portfolio increased earnings in the second half of the financial year • Proposed new stapling structure to enable the expansion of our Real Estate Investment Management (REIM) activity, whilst retaining the PIE status of our investment business • Stride will update its dividend guidance when it releases further details regarding the proposed new stapling structure, but in the meantime confirms its previously released guidance for Stride in its current form of at least 11.25 cps for FY17 NorthWest Shopping Centre opened 1 Oct 2015 Expanding our REIM Activity Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 Proposal to create new stapled shareholding structure 27 Appendices Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 28 Appendix 1 Address 31 Mar 16 Valuation VALUATION SUMMARY Revaluation Movement1 Revaluation Movement1 Market Cap Rate 2016 Market Cap Rate 2015 Address $m % % (0.40) 9.50 9.00 446 Te Rapa Road, Hamilton 18.40 1.9 0.34 8.13 8.13 Cnr Tremaine Avenue & Railway Road, Palmerston North 14.70 (9.1) (1.47) 9.80 8.35 26-48 Old Taupo Road, Rotorua 16.70 0.2 0.03 8.25 8.25 230-240 Fenton Street, Rotorua 14.20 5.2 0.70 7.63 8.13 78 Courtenay Street, New Plymouth 25.00 18.2 3.86 6.50 7.40 9 Gloucester Street, Napier 14.75 21.2 2.58 6.25 7.35 2 Carr Road, Mt Roskill, Auckland 31.50 5.3 1.58 6.50 6.88 Cnr Te Irirangi Drive & Bishop Dunn Place, Auckland 17.20 0.6 0.10 7.50 8.25 48 Miramar Avenue, Wellington 11.30 12.2 1.23 6.25 7.25 35 MacLaggan Street, Dunedin 9.50 39.6 2.69 8.25 10.50 24 Anzac Avenue, Auckland 20.70 (0.8) (0.16) 6.00 6.00 326 Great South Road, Auckland 29.00 (0.8) (0.22) 6.00 6.00 35a St Johns Road, Auckland 21.40 (10.9) (2.62) 6.13 6.13 507 Pakuranga Road, Auckland 17.40 2.8 0.47 6.00 6.00 3 Averill Street, Auckland 16.40 3.3 0.53 7.00 7.00 Cnr Church & Selwyn Streets, Auckland 10.10 (1.4) (0.14) 6.25 6.25 6.50 (0.7) (0.05) 6.25 6.25 47 Bay Road, Wellington 11.50 (0.8) (0.09) 6.25 6.25 91 Johnsonville Road, Wellington 20.80 2.7 0.54 6.50 6.50 13-19 Queen Street, Upper Hutt 9.60 (0.8) (0.07) 6.63 6.63 9.00 (0.8) (0.07) 6.63 6.63 % 6.38 7.88 Cnr Anglesea and Liverpool Streets, Hamilton 7-9 Fanshawe Street, Auckland 12.20 (11.0) (1.49) 9.75 9.75 15.9 2.57 7.50 8.25 9.2 1.76 6.75 7.13 35 Teed Street, Auckland 17.20 0.6 0.11 7.00 7.00 33 Customhouse Quay, Wellington 34.00 1.8 0.59 7.00 7.25 1 Grey Street, Wellington 49.75 1.8 0.88 7.63 7.88 22 The Terrace, Wellington 15.70 4.0 0.60 8.25 8.50 209.45 6.0 11.89 7.30 7.83 30 Airpark Drive, Auckland 20.35 5.3 1.03 7.00 7.25 22 Ha Crescent, Auckland 10.30 22.4 1.82 7.00 8.00 OFFICE TOTAL 8 Reg Savory Place, Auckland 20 Rockridge Avenue, Auckland 460 Rosebank Road, Auckland 11 Springs Road, Auckland 25 O'Rorke Road, Auckland 415 East Tamaki Road, Auckland 15 Ride Way, Auckland 34 Airpark Drive, Auckland INDUSTRIAL TOTAL Cnr Mt Wellington Highway & Penrose Road, Auckland Johnsonville Shopping Centre, Wellington (50%) 61 Silverdale Street, Auckland 6.60 9.8 0.59 6.38 7.00 12.30 17.0 1.81 7.25 7.50 12.00 20.00 57.18 16.25 8.65 31.6 (5.1) 17.5 21.8 7.1 2.87 (1.07) 8.35 2.89 0.57 7.75 7.88 6.33 6.38 6.75 8.50 8.25 6.84 7.50 7.25 5.70 26.8 1.21 5.25 6.50 169.33 13.6 20.06 6.79 7.39 Market Cap Rate 2015 % % 6.88 20.80 Market Cap Rate 2016 (6.0) $m 20.2 19.00 Revaluation Movement1 $m % 40.80 21-25 Teed Street, Auckland Revaluation Movement1 6.30 $m 33 Corinthian Drive, Auckland 80 Greys Avenue, Auckland 31 Mar 16 Valuation 66 Studholme Street, Morrinsville 37.20 2.3 0.84 6.88 7.13 32.94 (3.5) (1.19) 8.29 8.54 Russell Street, Upper Hutt 85.50 3.5 2.92 6.75 7.00 261 High Street, Lower Hutt 17.20 5.3 0.87 6.13 6.13 38.70 8.0 2.82 7.63 8.00 51 Arthur Street, Blenheim 11.50 (0.8) (0.09) 6.25 6.25 NorthWest Shopping Centre, Auckland 175.00 7.4 8.31 6.88 7.00 87-97 Hilton Street, Kaiapoi 12.10 (0.7) (0.09) 6.25 6.25 RETAIL TOTAL 369.34 4.6 13.70 7.05 7.31 219 Colombo Street, Beckenham 18.40 (0.8) (0.15) 6.00 6.00 8.60 (0.8) (0.07) 6.25 6.25 64 Gorge Road, Queenstown 10.30 (0.7) (0.07) 5.75 5.75 309 Cumberland Street, Dunedin 18.50 2.6 0.47 6.25 6.25 172 Tay Street, Invercargill 18.00 1.2 0.22 6.50 6.50 BULK RETAIL TOTAL 466.55 65 Chapel Street, Tauranga Cnr Victoria & Browne Street, Timaru 1 Revaluation movement includes capital expenditure, capitalised lease incentives and fixed rental income. 2.3 10.45 6.71 6.85 Totals in the table may not sum accurately due to rounding. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 29 Appendix 1 31 Mar 16 Valuation Revaluation Movement1 Revaluation Movement1 Market Cap Rate 2016 Market Cap Rate 2015 $m % $m % % 15 Rockridge Avenue, Auckland 2.10 10.5 0.20 - - LAND/DEVELOPMENT 2.10 10.5 0.20 - - 1,216.76 5.1 56.31 6.93 7.22 39 Corinthian Drive, Auckland 5.91 3.3 0.19 - - Lot 85 Tauriko Industrial Estate, Tauranga 0.69 41.4 0.20 - - Lot 83 Tauriko Industrial Estate, Tauranga 0.53 24.9 0.11 - - 20-22 Pollen Street, Auckland 8.00 53.8 2.80 - - Cnr Ward, Bryce and Tristram Streets, Hamilton 13.43 (3.5) (0.49) - - 650 Great South Road, Aucklandt 29.50 2.9 0.82 8.00 8.50 NON-CURRENT ASSETS HELD FOR SALE 58.05 6.7 3.63 1,274.81 5.2 59.94 Address TOTAL INVESTMENT PROPERTIES TOTAL PORTFOLIO 1 VALUATION SUMMARY 8.00 6.95 8.50 7.25 Revaluation movement includes capital expenditure, capitalised lease incentives and fixed rental income. Totals in the table may not sum accurately due to rounding. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 30 May 2016 30 Appendix 2 Stride Property Stride PropertyLimited Limited —— Interim Annual Results Results Presentation Presentation for the forsix themonths year ended ended31 30March September 2016 2015 – 30 May – 12 2016 November 2015 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 for the twelve months ended 31 March 2016. The information in this presentation does not purport to be a complete description of Stride. In making an investment decision, investors must rely on their own examination of Stride, 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, Stride, its directors, officers, employees, agents and financial advisers disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence on the part of Stride, 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 prospectus, investment statement or disclosure document. Stride Property Limited — Annual Results Presentation for the year ended 31 March 2016 – 26 May 2016 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