Macquarie ProLogis Trust Acquisition of North American industrial portfolio mêçiçöáë=m~êâ=fjonm=aáëíêáäìíáçå=`éåíéê=@ni=oá~äíçi=`~äáñçêåá~ ^éêáä=ommr
Overview Macquarie ProLogis Trust (MPR) has acquired an interest in nine high quality properties in North America, recently developed by ProLogis Purchase price of US$134.4 million, reflecting initial yield of 7.4% 100% occupancy with average lease expiry of 7.0 years High quality customers and market positions Funded using 1st instalment proceeds of SHEDS 1 raised in March 2005 1st tranche of intended acquisitions during 2005 Total SHEDS proceeds ($150 million) expected to partially fund acquisitions with an aggregate price of approx. US$240 million and an average initial yield of approx. 7.75% to 8.0% Underpins expectations of potential increase in earnings resulting from SHEDS issue Growth continues with strong property fundamentals Opportune time for acquisitions as US industrial property market recovery gains traction and exchange rate at historic highs Reinforces benefit to unitholders of ProLogis development pipeline For more detail on US warehouse markets, please see ProLogis latest published research report at: http://ir.prologis.com/downloads/uspropertymktreview_305.pdf 1 Step-up Hybrid Exchangeable Distributing Securities, issued by Macquarie ProLogis Income Trust (a member of the MPR group) 2
Portfolio details Property Market Region Acquired Area (Sq ft) Appraised Valuation (US$M) Acquisition Price (US$M) (%) (1) West Chester Commerce Park #4-B Cincinnati, OH Mid-West 31,800 1.80 1.80 8.1 Capital Park South Distribution Center #11 Columbus, OH Mid-West 749,952 28.50 28.50 7.7 Dallas Corporate Center #11 Dallas, TX Central 128,276 5.30 5.30 8.8 ProLogis Park I-210 Distribution Center #1 Los Angeles, CA Pacific 882,230 54.50 54.50 6.0 Memphis Industrial Park #200 & #300 Memphis, TN Southeast 536,900 19.80 19.80 8.2 Crossroads Corporate Center #4 Salt Lake City, UT Pacific 149,800 6.16 6.16 9.4 Gateway Distribution Center #1 Washington, D.C. Northeast 65,202 7.00 7.00 7.3 Tijuana Industrial Center #1 Tijuana, MX Mexico 131,110 6.80 6.35 10.2 Tijuana Industrial Center #9 Tijuana, MX Mexico 90,000 5.30 4.95 10.1 Total / Average 2,765,270 135.16 134.36 7.4 NK _~ëéç=çå=~åèìáëáíáçå=éêáåé= 3
Impact on MPR portfolio as at 31 March 2005 Total Building Area (sf) No of Properties Geographic Markets Total portfolio value (US$m) Average Building Size (sf) 261,734 307,252 267,522 Office Content (%) 1 5.0 3.4 4.8 Average Age (years) 2 5.6 3.3 5.4 Average Site Area (acres) Average Site Coverage (%) 40.9 42.7 41.0 Average Lease Expiry Date 3 Nov 2009 Mar 2012 Jan 2010 Leased (%) Pre Acquisition 28,267,294 108 30 1,258.1 14.4 98.8 March 2005 Portfolio 2,765,270 9 8 134.4 15.6 100.0 Post Acquisition 31,032,564 116 (4) 31 1,392.5 14.5 98.9 Notes 1. Weighted by square feet 2. Weighted by appraised valuation 3. Weighted by income 4. West Chester Commerce Park #4 A B is counted as one property 4
Lease expiry profile As at 31 March 2005, by current income Extends average lease expiry by 2 months to January 2010 (4.8 years) No significant lease expiry until FY 2007 (17.7%, down from 18.8% at December 2004 and 25.9% at IPO) 40% 35% 30% 25% 20% 15% 10% 5% 0% 30.5% 17.7% 15.6% 12.2% 11.0% 5.0% 5.6% 2.4% FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012+ 5
20% 15% 10% 5% 0% Improved diversification Strengthens MPR s presence in existing markets Further tenant diversification 67% of rent in new acquisitions represented by S&P-rated credit companies Geographic Distribution by Market (by Appraised Value) Geographic Distribution by Region (by Appraised Value) 15.6 % Mexico 12.0% Mid-West 16.9% Pacific 21.1% Northeast 9.8% 7.3% 6.0% 5.8% 5.3% 4.8% 4.6% 3.9% 3.7% 3.6% 3.6% 3.5% 3.2% 2.9% 2.8% 2.8% 2.6% 2.4% 2.2% Central 17.2% 1.9 % 1.8 % 1.7 % 1.3 % 1.3 % 1.3 % 1.2 % 0.9% Southeast 22.9% 0.6% 0.5% 0.5% 0.4% 6 Los Angeles Dallas Memphis Columbus Eastern PA Tijuana Atlanta San Antonio Reynosa St. Louis Baltimore Houston Chicago Monterrey Reno Northern New Jersey El Paso Louisville Charlotte Washington, D.C. Cincinnati Broward County Nashville Orlando San Francisco Southern New Jersey Tampa Juarez Portland Denver Salt Lake City
New Market Salt Lake City, Utah Salt Lake City has emerged as a regional warehouse market due to proximity to West Coast via Interstate 80, servicing the Intermountain West market comprising of Idaho, Wyoming, Utah and Montana. Strong infrastructure network, including recently expanded International Airport. Metropolitan area has a population in excess of 1.4 million. Job growth of 2.9% in 2004 exceeded national average of 1.6%. Cost of living is 4% below the national average Significant drop in industrial vacancy rates points to solid recovery Vacancy rates declined from 10.5% to 8.5% during 2004 Increased activity reflected by 10% rise in completed transactions in 2004 7
Crossroads Corporate Center #4 Salt Lake City, Utah Located in the Interstate 240/ Southeast market, 6 miles from Memphis International Airport (hub for FedEx) and 13 miles from Memphis CBD Located 1.5 miles south of Salt Lake City International Airport, and 4 miles west of the Central business district Leased to three customers for an average of 5 years remaining term Keebler Company, occupying 50% of the property, is owned by Kellogg (S&P rated BBB+), and the lease term runs through December 2012 Market is stable, with very little new construction in last 3 years Key statistics Independent Valuation Building Area Value psf Occupancy Average Lease Expiry Tenants Year Built Site Coverage % Office Clear Height 10 Year IRR Average Net Market Rent Average Net Passing Rent US$6,160,000 149,800 SF $41.12 100% March 2010 Keebler Co. US Container Co. Northwest Tire Factory 2000 47.1% 5.0% 28ft 9.4% 9.5% $3.30psf $3.88psf 8
West Chester Commerce Park #4B Cincinnati, Ohio Remaining portion of condo building contributed in 2004 Total building 81,000 SF valued at US$4.9 million, 100% occupancy, initial yield 8.5% High visibility location within 1 mile of Interstate 75 and Union Centre Boulevard interchange Leased to two customers for an average of 3.4 years remaining term Key statistics Independent Valuation Building Area Value psf Occupancy Average Lease Expiry Tenants Year Built Site Coverage % Office Clear Height 10 Year IRR Average Net Market Rent Average Net Passing Rent US$1,800,000 31,800 SF $56.60 100% August 2009 Rite Rug Co. Protégé Delivery 2001 23.9% 15.6% 20ft 8.1% 9.3% $4.66psf $4.70psf 9
Capital Park South Dist. Center #11 Columbus, Ohio Brand new, state of the art larger bulk building complements other MPR holdings at Capital Park South Excellent location within I-270 Southwest submarket - fronts I-270 at State Route 62 exit Leased to three strong credit customers with an average remaining lease term of 7.8 years: Bacou Dalloz and Nippon are public companies Nippon and Relizon are S&P rated A- and BB- respectively. Key statistics Independent Valuation Building Area Value psf Occupancy Average Lease Expiry US$28,500,000 749,952 SF $38.00 100% January 2013 Tenants Year Built Bacou-Dalloz USA. Nippon Express USA The Relizon Co. 2004 Site Coverage 41.8% % Office 1.4% Clear Height 32ft 7.7% 10 Year IRR 8.8% Average Net Market Rent $2.67psf Average Net Passing Rent $2.96psf 1 NK 10 fååäìçéë=êéåí=çñ=amkpu=éëñ=êéä~íáåö=íç=~äçîé=ëí~åç~êç=íéå~åí=áãéêçîéãéåíë=
Dallas Corporate Center #11 Dallas, Texas State of the art bulk distribution facility developed by ProLogis in 1999 Excellent location in Dallas Corporate Center, ProLogis premier industrial park in Dallas, at intersection of Interstates 35 and 635 Dallas market continues to lag the broader U.S. economic recovery, although investor demand for product remains strong No expiry until 2009 Key statistics Independent Valuation Building Area Value psf Occupancy Average Lease Expiry Tenants Year Built Site Coverage % Office Clear Height 10 Year IRR Average Net Market Rent Average Net Passing Rent US$5,300,000 128,276 SF $41.32 100% September 2009 Midway Home Ent. Walker & Zanger Otis Elevator Co. 1999 52.1% 9.1% 24ft 8.8% 9.0% $3.40psf $3.54psf 11
ProLogis Park I-210 Dist Center #1 Los Angeles, California Brand new state of the art 30-foot clear distribution facility Located in the Inland Empire East submarket, one of the fastest growth submarkets in the US, within one quarter mile of the newly expanded Interstate 210, allowing direct access to the LA Basin West Access provides for rapid distribution to greater L.A. area as well as the Western US via Interstates 10,15 and 40 Leased to Solo Cup, S&P rated B+, on a 10-year term Key statistics Independent Valuation Building Area Value psf Occupancy Average Lease Expiry Tenant Year Built Site Coverage % Office Clear Height 10 Year IRR Average Net Market Rent Average Net Passing Rent US$54,500,000 882,230 SF $61.78 100% May 2015 Solo Cup Co. 2004 51.2% 0.8% 30ft 6.0% 8.2% $3.72psf $3.72psf 12
Memphis Industrial Park #200 & #300 Memphis, Tennessee Recently expanded ProLogis-developed facility, driven by customer expansion Located in the Interstate 240/ Southeast market, 6 miles from Memphis International Airport (hub for FedEx) and 13 miles from Memphis CBD Market activity increasing with numerous large projects and active leasing Key statistics Independent Valuation Building Area Value psf Occupancy Average Lease Expiry Tenants Year Built Site Coverage % Office Clear Height 10 Year IRR Average Net Market Rent Average Net Passing Rent US$19,800,000 536,900 SF $36.88 100% June 2009 Menlo Logistics USF Processors Stuart Medical 2001 and 2004 45.5% 2.9% 30ft and 32ft 8.2% 9.0% $2.96psf $3.06psf 13
Gateway Distribution Center #1 Washington, D.C. Situated just north of Dulles International Airport, in the Interstate 66/Dulles submarket, providing access throughout the Northern Virginia region Leased at below market rents to three customers for an average 3.5 years remaining lease term Kuehne & Nagel, occupying 50% of the property, is a public company that has been in business for 119 years, with $6 billion in sales and $.8 billion net worth. Market is showing signs of strength:overall ProLogis occupancy is 93.3%; MPR occupancy is 100% Key statistics Independent Valuation Building Area Value psf Occupancy Average Lease Expiry Tenants Year Built Site Coverage % Office Clear Height 10 Year IRR Average Net Market Rent Average Net Passing Rent US$7,000,000 65,202 SF $107.36 100% September 2009 Kuehne & Nagel Dunbar Armored Potomac Floor Covering 1998 26.1% 18.4% 24ft 7.3% 8.8% $8.50psf $7.85psf 14
Tijuana Industrial Center #1 Tijuana, Mexico Brand-new, state of the art facility Excellent location close to other MPR assets in Tijuana Leased by Bose Corporation since 1999 Market continues to show signs of strength. MPR stabilized portfolio in Tijuana is 96.7% leased. Leases in process for remaining 42,368 SF vacancy will bring total occupancy to 100% Key statistics Independent Valuation Building Area Value psf Occupancy Average Lease Expiry Tenant Year Built Site Coverage % Office Clear Height 10 Year IRR Average Net Market Rent Average Net Passing Rent US$6,800,000 131,110 SF $51.86 100% March 2008 Bose Corp. 1998 50.6% 8.0% 24ft 10.2% 11.4% $5.30psf $5.31psf 15
Tijuana Industrial Center #9 Tijuana, Mexico Brand-new, state of the art facility Excellent location close to other MPR assets in Tijuana Leased to two customers for an average of 4.8 years remaining term Market continues to show signs of strength: MPR stabilized portfolio in Tijuana is 96.7% leased. Leases in process for remaining 42,368 SF vacancy will bring total occupancy to 100% Key statistics Independent Valuation Building Area Value psf Occupancy Average Lease Expiry Tenant s Year Built Site Coverage % Office Clear Height 10 Year IRR Average Net Market Rent Average Net Passing Rent US$5,300,000 90,000 SF $58.89 100% January 2010 Uni US de Mexico. Tobutsu de Mexico. 2004 45.9% 14.7% 24ft 10.1% 11.6% $5.86psf $5.93psf 16
Rent review profile Following acquisition of the March 2005 Properties, the financial year rent review profile of MPR s portfolio as at 31 March 2005 is as follows: Financial year 2005 2006 2007 2008 2009 2010 % rent subject to expiry (1) 2.8 6.2 17.5 12.7 8.8 15.5 % rent subject to no review (1) 72.4 63.4 56.6 46.6 70.1 60.3 % rent subject to fixed review (1) 24.7 30.4 25.9 40.6 21.1 24.2 Total 100.0 100.0 100.0 100.0 100.0 100.0 For those leases with a fixed review (2) : Weighted average fixed review % 3.8 3.8 6.0 6.4 3.5 6.4 (1) Represents the percentage of the relevant year s contracted rent (2) Represents the average fixed increase of those leases subject to a fixed rent review in the relevant period. Please note that this profile relates to existing leases only, and makes no assumptions about rent on new or renewal leases. NOI growth is generally generated by a combination of fixed rent reviews and any increase (or decrease) in rents arising from new or renewal leases upon expiry (including any associated downtime). 17
Macquarie ProLogis Trust This presentation has been prepared by Macquarie ProLogis Management Limited (MPML) for general information purposes only, without taking into account any potential investors personal objectives, financial situation or needs. Before investing in MPR, you should consider your own objectives, financial situation and needs or obtain independent financial, legal and/or taxation advice. Past performance information provided in this presentation is not a reliable indication of future performance. Due care and attention has been exercised in the preparation of forecast information, however, forecasts, by their very nature, are subject to uncertainty and contingencies many of which are outside the control of MPML. Actual results may vary from forecasts and any variation may be materially positive or negative. MPML is entitled to receive fees for operating MPR, which are calculated by reference to the value of the assets and performance of MPR. Entities within the Macquarie Bank Group may also provide resources to MPR. For further information on fees relating to MPR, refer to MPR's latest annual report. Investments in MPR are not deposits with or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL) or of any Macquarie Bank Group company and are subject to investment risk, including possible delays in repayment and loss of income or principal invested. None of MBL, MPML or any other member company of the Macquarie Bank Group guarantees the performance of MPR or the repayment of capital from the fund or any particular rate of return. This information contained herein is current as at the date of this presentation. Macquarie Group