NZRPG Shares FMC Act Presentation Joint Lead Managers

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2 Disclaimer NZ Retail Property Group Limited ("NZRPG") is considering making an offer of shares ("Shares"). No money is currently being sought in relation to any offer of Shares, and Shares cannot currently be applied for or acquired. If an offer of Shares is made, it will be made in accordance with the Financial Markets Conduct Act 2013 ("FMC Act"). This presentation ("Presentation") is not a product disclosure statement, prospectus, investment statement or other document required by law in any jurisdiction, and is for preliminary information purposes only and has not been, and will not be, filed with or approved by any regulatory authority in any jurisdiction. No part of this Presentation shall form the basis of, or be relied upon, in connection with any contract, obligation or commitment whatsoever in relation to any offer of Shares. Nothing in this Presentation constitutes an invitation to subscribe for or acquire, or an offer of, shares, securities or financial products to any person, whether in New Zealand or in any other country. The information in this Presentation is given in good faith and has been obtained from sources believed to be reliable and accurate at the date of its preparation, but its accuracy, correctness and completeness cannot be guaranteed. Some of the information contained in this Presentation may constitute forward looking statements that are subject to various risks and uncertainties. Nothing in this Presentation is a promise or representation as to the future. Statements or assumptions in this Presentation as to future matters may prove to be incorrect. No person makes any representation or warranty as to the accuracy of such statements or assumptions. You acknowledge that circumstances may change and the contents of this Presentation may become outdated as a result. You also acknowledge that no audit or review has been undertaken by an independent third party of the assumptions, data, results, calculations and forecasts contained in or referred to in this document. This Presentation does not constitute a recommendation by NZRPG, Forsyth Barr Limited or Deutsche Craigs Limited (together, the "Joint Lead Managers"), or any of the directors, officers, employees or agents of NZRPG, or the Joint Lead Managers to subscribe for, or acquire, any of the Shares. None of NZRPG (except as required by law), the Joint Lead Managers, nor any of their respective directors, officers, employees or agents accept any liability whatsoever for any loss arising from this document or its contents or otherwise arising in connection with any offer of the Shares. The information set out in this Presentation does not constitute investment advice as to whether you should acquire Shares and does not take into account your specific financial, investment, taxation or other circumstances. You should consult your own advisers before making any financial decision. 2

3 Presenting today Paul Duffy, Independent Chairman 35+ years experience in property management Current Chairman, Augusta Capital Director, NPT Former CEO, DNZ Property Fund Mark Gunton, Founder and CEO Formed NZRPG in 1992 Led the development of Westgate and Fraser Cover Shopping Centres Led the acquisition and refurbishment of Milford and Highbury Malls Campbell Barbour, Property Director Joined NZRPG in 2004 Responsible for the direction of NZRPG s property portfolio Previously a principal in an Auckland based valuation and consultancy practice 3

4 Contents Overview: Business highlights Snapshot Opportunity The company: The history on NZRPG Functions of the business Portfolio Westgate Milford Highbury Fraser Cove 4

5 Overview 5

6 Business highlights Direct exposure to the Auckland story, New Zealand s hub of economic and residential growth Unique integrated property investment, development and management platform Strong established property portfolio backed by solid macro thematics and robust fundamentals Significant consented transformational development opportunities Experienced Board and strong in-house management capability to execute the vision 6

7 Business snapshot NZ Retail Property Group (NZRPG) is one of New Zealand s largest retail ownership, management and development companies. Established in 1987, NZRPG has been owning, managing and developing property for 30 years. Portfolio of high quality, strategic, income producing assets with an aligned development pipeline, making it unique in the New Zealand property sector. The portfolio consists of holdings in three prime Town Centres located in Auckland (New Zealand s economic hub) and a Shopping Centre in Tauranga (one of New Zealand s fastest growing cities). The current portfolio is anchored by blue chip Australasian retail tenants including Countdown, The Warehouse, JB Hi-Fi, and Noel Leeming. Based on current valuations (a), NZRPG is expected to have approximately $575m of assets in its property portfolio, including rights to acquire additional assets. Approximately 40% of its total property assets (including the assets to be acquired) are development in nature. (a) Current property valuations are draft only and subject to change Westgate Milford Highbury Fraser Cove 7

8 A defined path to portfolio growth NZRPG has been at the forefront of planning for the urban intensification required to provide a credible outcome for Auckland s growth aspirations (and supported by the Auckland Unitary Plan). It is focused on the strategic development of its existing retail centres into planned town environments and mixed use assets. This is expected to include the provision of residential overlays to all its town centre properties which will enhance the retail performance and allow for capital to be recycled into the core business. Retail (Investment) Commercial, community, services provisioning (Investment) Residential (Recycling of capital back to investment portfolio) Strong tailwinds from supportive macro thematics including: Auckland population growth, in part driven by positive net migration; and Auckland housing underbuild. $ $ 8

9 People per household Excess building consent supply/(demand) (000s) 3m MA, annualised, (000's) 3m MA, annualised, (000's) CAGR (%) Key drivers of Auckland property market Auckland retail and residential market is being supported by attractive macro thematics. Strong net migration growth and a shortage of new build. Particular growth in North-West Auckland the location of NZRPG s new town centre at Westgate. Robust levels of net migration are driving population growth Net migration (LHS) Arrivals (RHS) Departures (RHS) Source: Statistics New Zealand New housing in NZ has not kept pace with population growth New Zealand Australia Source: Statistics New Zealand Westgate catchment area population growth is expected to outperform 4.0% 3.0% 2.0% 1.0% 0.0% 3.7% Westgate primary catchment area Source: JLL, Statistics New Zealand 1.8% Auckland Growing housing supply shortage, particularly in Auckland % New Zealand Source: Statistics New Zealand Note: Westgate primary catchment area includes adjoining suburbs Auckland Rest of NZ 9

10 The company 10

11 History of NZRPG 11

12 30 Years of developing and managing mixed use assets. Property management and leasing: All day to day operational aspects of the retail properties within the portfolio e.g. tenancy mix, rent reviews and general care of the properties. Overall forward strategic direction of the centres. Facilities management: Technical services relating to the property assets e.g. maintenance of lifts, air conditioning and fire safety systems. Soft services e.g. security and cleaning. Logistics services e.g. Information Technology and signage. Marketing: Promoting the centres to attract shoppers, delivering the residential projects to market, through to building the business profile across the industry. Construction management: Manages the contracting of works to independent contractors. Track record of large format retail style construction having built the original Westgate Shopping Centre and more recently it has just completed the Westgate Lifestyle precinct for Kiwi Property Group, the M10/Palmers Planet and Resene/Dulux builds in the Trade Based Retail Zone. Development: Identifies opportunities at the raw land stage. Undertakes successful town planning processes. Development of land including the provision of the required core infrastructure. 12

13 The Properties 13

14 Portfolio - Westgate The Westgate area is part of one of the six transformation projects targeted by Auckland Council to support the growth of Auckland and is the culmination of 14 years of planning between Auckland Council and NZRPG. The original Westgate retail development was undertaken in 1997 with subsequent land acquisitions made to accumulate some 57 ha (of contiguous land) to provide for the creation of a Master Planned town centre servicing the Northwest. Notwithstanding significant third party investment in Westgate as a result of selling bare land to Stride Property and a completed S&G Construction development to the Kiwi Property Group (Zone 7), NZRPG is in control of the balance of the undeveloped land in this new town. Its existing holdings have a strong and stable cashflow, and are well positioned to build on organically as demand materialises. NZRPG has 28 hectares of ready to build land at Westgate (in addition to its existing built form footprint) which consists of Town Centre and Employment Zoned land. 14

15 Westgate Town Centre Westgate is already one of Auckland s largest retail offerings. NZRPG and Auckland Council have developed a plan for the town to see it fulfil its role as the region s central focus of commerce and retail activities with an integrated mix of street-based retail, internal retail, commercial business, and public areas. The plan provides for a genuine town environment as a central focus for the community whilst delivering a commercially successful venture. It primarily serves the northern and western catchments of Auckland. However, its appeal will see it enjoy good reach into secondary and tertiary catchments through its strong motorway connections (adjacent to Auckland s North-Western motorway with its own exit) which has been significantly enhanced by the recent opening of the Waterview connection. The undertaking of the Westgate Town Centre development provides significant opportunities to lift the current rent roll in the original Westgate Precinct by way of relocation, renovation and re-tenanting of the retail offer. Enabling works are complete and provide for roading, parkland and utility reticulation. 15

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20 Portfolio - Milford NZRPG acquired the Milford Centre in 2006, securing the opportunity to unlock the property s potential. Milford enjoys strong property fundamentals, comprising of c.3ha of land with relatively low building site coverage offering expansion/development opportunities. NZRPG is undertaking a three step process to unlock Milford s potential: 1. A significant mall upgrade with changes to the retail tenant composition. 2. The provision of a retail expansion to add additional specialty floor space to a shopping centre with two significant anchors. 3. A residential overlay to provide high quality apartment accommodation taking advantage of the property s enviable locational characteristics. NZRPG successfully executed the first stage in 2010 and has pursued land use planning outcomes to enable stages 2 and 3. It launched a 20 plus store retail expansion, mall ambience upgrade and a 115 residential apartment project in 4Q The vision for Milford is anticipated to result in a substantially enlarged retail offering, enjoying a sustainable niche position in the Auckland retail market. 20

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23 Luxury apartments in Milford 23

24 Luxury apartments in Milford There is a significant opportunity for high quality residential accommodation on the site. NZRPG has developed a master plan (with Auckland Council approving planning consents) which is expected to deliver a sequence of high quality apartment buildings which will offer a level of apartment residential living which is unrivaled in a suburban Auckland setting. The delivery of large scale apartment buildings over the retail centre will provide for a captured affluent residential catchment which is expected to deliver meaningful retail performance benefits. The successful delivery of the apartment projects will generate solid capital returns to be recycled into the wider business. Importantly, NZRPG s Milford project is expected to provide a strong platform to make progress in the residential apartment delivery market. 24

25 Portfolio - Highbury NZRPG has a large scale vision for Highbury s redevelopment. It anticipates it will not only transform its own property, but be the catalyst for an acceleration of the ongoing regentrification of the Birkenhead town centre. The development agenda for the site is expected to comprise a retail repositioning and a cluster of residential apartment buildings which it expects will give the ridgeline a skyline. NZRPG s patience in holding Highbury until the time is right for it to reach its full potential, combined with the indisputable property fundamentals, have created the opportunity for a significant redevelopment. This is anticipated to cement Highbury s retail position in a thriving town centre and deliver significant capital returns from apartment residential development. 25

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27 Highbury development potential 27

28 Portfolio - Fraser Cove In 2001, post its development of Westgate in Auckland, NZRPG identified a brownfields development opportunity in Tauranga and a gap in the city s retail network. It set about delivering a regionally significant large format retail centre to service the rapidly expanding Tauranga market. NZRPG s established model is a hybrid of leading large format New Zealand brands combined with a range of smaller service and specialist outlets. The centre is anchored by the largest Countdown supermarket in Tauranga and The Warehouse store, together with an established line-up of leading New Zealand brands. The convenient car parking, open air ambience and relaxed feel has seen it become established as one of the key retail centres in Tauranga. NZRPG expects that the centre s strong fundamentals will see it maintain its profile within the rapidly developing Tauranga market which is buoyed by continued population growth. The site s large land area and low site coverage mean that it retains future development potential to further build on what has been a successful formula to date. 28

29 Portfolio Fraser Cove 29

30 Business highlights Direct exposure to the Auckland story, New Zealand s hub of economic and residential growth Unique integrated property investment, development and management platform Strong established property portfolio backed by solid macro thematics and robust fundamentals Significant consented transformational development opportunities Experienced Board and strong in-house management capability to execute the vision 30

31 Appendix 31

32 The Board Paul Duffy Independent Chairman Sean Joyce Independent Director Mark Gunton Executive Director Bruce Cotterill Independent Director 32

33 Management Team Andrew Kingstone Chief Financial Officer Tom Hammond GM, Property Paul Tanday General Manager Revenue Campbell Barbour Property Director Greg Douglas General Manager of Construction Sarah Johnson GM, Marketing & Communications 33