Precinct Properties NZ Ltd & Precinct Properties Investments Ltd (PCT) Earnings Call Transcript

[Foreign Language] Good morning, and welcome to Precinct Properties 2025 Annual Meeting of Shareholders. I'm Anne Urlwin, Independent Director and Chair. We're delighted to be in Precinct Flex's, Toroa Meeting Suite again this year. It is wonderful facility, and it's a pleasure to see so many of you, our shareholders in attendance today. So similar to previous years, today's meeting is a hybrid format. In addition to the in-person meeting being held, shareholders, proxies and guests can attend the meeting via the online -- Computershare online meeting platform. Shareholders and proxies attending virtually will also have the opportunity to ask questions and submit votes online. So for those online participants, if you have a question to submit during the live meeting, please select the Q&A tab on the right half of your screen at any time. Type your question into the field and press submit and your question will be immediately submitted to the moderator. But should you require any assistance, one of the Computershare team will be able to assist you via the chat function and reply to your query. Alternatively, you can call Computershare on 0800-650-034. Please note that while for those online, you can submit questions at any time from now, I won't address them until the relevant time in the meeting at the end of the presentations. And please also note that your questions may be moderated or if we receive multiple questions on one topic, amalgamated together. And while we will try to get through as many questions as possible, we do apologize in advance for any questions submitted online that we are unable to answer today due to time constraints. And in that case, the questions will be followed up by e-mail after the meeting. So voting today will be conducted by way of poll on all items of business. In order to provide you with enough time to vote, I will shortly open the voting for all resolutions. For those of you attending virtually, if you are eligible to vote at this meeting, you will be able to cast your vote online under the vote tab. Once the voting has been opened, the resolutions and voting options will allow voting. And to vote, simply click on the vote tab, select your voting direction from the options shown on the screen. Your vote has been cast when the tick appears. And to change your vote, simply select change your vote. You have the ability to change your vote up until the time I declare that voting has closed. So I now declare voting open on all items of business. And for those physically attending today, the Board and the executive team look forward to engaging with you directly, and we hope you will all stay and join us for some light refreshments after the meeting has concluded. I would now like to introduce the members of the Board and executive team joining us here today and perhaps just ask them to give a [wee] wave as I call out their names. So we've got Alison Barrass, and Nicola Greer, Chris Judd, Chris Meads, Mark Tume, Scott Pritchard and Richard Hilder. Taurua Grant also joins us here today. He is a future Director through the Future Directors Program of the Institute of Directors. And also present with us today are representatives from our auditors, Ernst & Young; our tax advisers, KPMG; our legal advisers, Chapman Tripp and our registrar Computershare. So now moving to the agenda of today's meeting. So it is outlined on the slide in front of us here. And we will begin with reviewing the performance and activity of Precinct over the last financial year. Following the conclusion of the presentation, there will be an opportunity for shareholders attending either in-person or using the virtual meeting platform to ask questions. And we will start with any in-person questions before moving to any online questions received. And to encourage shareholder participation, we have also invited those unable to attend today to submit questions ahead of the meeting via e-mail or by post. We welcome any feedback, and we'll consider any other matters that may properly be brought before the meeting today. The meeting will then proceed to the formal business. And today, we will consider 5 ordinary resolutions, which are being put forward for shareholder approval. There are 4 ordinary resolutions for Precinct Properties New Zealand Limited and 1 ordinary resolution for Precinct Properties Investments Limited. And as detailed in the notice of meeting sent to shareholders last month, the first resolution is to consider my own reelection as a director. The second resolution is to consider the reelection of Chris Meads as a Director. The third resolution will consider proposed changes to the director remuneration with the fourth and fifth resolutions to consider the fixing of remuneration of Ernst & Young as auditor for the ensuing year for each of Precinct Properties New Zealand Limited and Precinct Properties Investments Limited. But before voting begins, both Chris Meads and I will deliver brief reelection speeches, and you'll also have the opportunity to ask questions about each resolution before casting your vote. Welcome. So before we turn to Precinct's performance and highlights over the last year, I'd like to begin with a brief overview of our Board composition and a bit more detail on Resolution 3, which considers proposed changes to Director Remuneration. As you'll be aware, the People and Performance Committee is responsible for managing the Board's succession planning, and it regularly reviews the skills required for the Precinct boards. This means ensuring that the Boards of Precinct are composed of individuals with a wide range of appropriate skills, knowledge and experience that are well aligned to Precinct strategy. Importantly, and in accordance with the NZX code, a majority of independent directors is maintained. So moving to the proposed changes to director remuneration. As detailed in the notice of meeting that which you have received, Precinct's policy is to engage an external review of director remuneration every 2 years. And at the 2023 Annual Shareholders Meeting, shareholders approved an increase in directors' fees, excluding the chair, acknowledging the rising regulatory risk, expanding scope of responsibilities and increased time demands on directors. Precinct has subsequently reengaged PwC to update the New Zealand listed company benchmark data at last provided in 2023. This review includes the roles of Chair, Committee Chairs, Committee Members and base non-executive director fees. The Board has also asked PwC to propose a Chair's fee that includes committee membership fees rather than the chair receiving committee membership fees as well as the chair fees, which is currently the case. This better reflects market practice. So the Board is conscious of its obligation to ensure that directors' fees are set and managed in a way that is fair, flexible and transparent. At the same time, the Board seeks to ensure that directors' fees are set at an appropriate level to assist Precinct and Precinct investments to secure and retain the skills, knowledge and experience at Board level necessary to govern the business and which are well aligned with Precinct's strategy. So in line with this commitment, the Board has reviewed the current directors' fees and considers that the proposed changes relating to Resolution 3 be those modest adjustments that are aligned with market benchmarks. So in order to create value for our clients, partners and you, as shareholders, over the longer term, Precinct has evolved into a broader real estate developer, investor manager, focusing on central city environments and targeting developments and ownerships of mixed-use assets of scale. Notably, Precinct has developed over $2.6 billion in premium grade real estate since 2017. And now manages around $1.6 billion of capital partnerships which Scott will cover in more detail later in the presentation. Precinct launched its capital partnering and its living sector strategies in 2022, which have since become core components of our business. Entry into the living sector marks a strategic shift and to an adjacent opportunity set from Precinct's core commercial office portfolio. Since then, Precinct has also extended its living strategy to include purpose-built student accommodation, which reflects a natural extension of Precinct's expertise in creating high-quality, mixed-use urban Precincts. Precinct has continued to progress its strategic initiatives, which includes advancing our living strategy projects with the announcement last month to commence a 201,638 beds student accommodation at 256 Queen Street here in Auckland. I also wanted to provide some comments regarding the recent equity raise, which consisted of an underwritten placement and a non-underwritten share purchase plan. While the equity raise was not structured as a rights issue, it was designed and it was implemented in a manner that is consistent with the Board's objective of ensuring fairness for all shareholders. While Precinct targeted raising $25 million through the share placement plan, around $52 million of applications were received and $15 million of oversubscriptions were accepted in accordance with the terms of the SPP. In Precinct's acceptance of the oversubscriptions recognizes the strong support from retail shareholders and the desire to, as far as practicable allows shareholders to maintain their proportionate ownership following the equity raise. And importantly, the outcome meant that 99.5% of investors received either pro rata or 100% of their application. I'd like to move now to an update on Precinct sustainability efforts. Precinct's integrated sustainability strategy ensures compliance firstly, but positions us as an industry leader. This alignment enables effective partnerships with stakeholders to advance shared ESG goals while improving environmental performance and reducing operational costs. And today, we are pleased to share with you our most recent 2025 Global Real Estate Sustainability Benchmark, what's known as GRESB score. So Precinct has achieved an increased GRESB survey score of 91 out of 100. That's up from 89 last year. And we are extremely proud to have Precinct in the top 20% of funds globally, reflecting a 5-star top leadership. Precinct has also published its second climate statement in accordance with the XRB climate standards. And our annual report is available -- which is available on the website along with the annual report. And that provides a quite detailed information on our sustainability initiatives. I encourage you to read it if you haven't already done so. So before handing over to Scott and declaring the first quarter dividends for financial year '26, I will provide an update and overview of Precinct's dividend policy update, which was communicated in August alongside 2025 annual results. So during the year, Precinct undertook a comprehensive review of its dividend policy to ensure that it aligns with best practice and the evolving business model. The review identified that the previous policy, which was based on a 100% payout of adjusted funds from operations, what we call FO, was to rigid for Precinct's evolving business model and may lead to dividend volatility. So following this review, Precinct has adopted a revised dividend policy, which is based on a payout range of 80% to 95% of funds from operations, what we call FFO. FFO better reflects Precinct's evolving business operations, including active income streams like the recognition of development profits relating to fund through structures. Basing dividends on FFO, which is a more stable measure than FO means Precinct can offer shareholders more predictable returns. Consistent with the previous policy, the primary goal of the revised policy is to provide stable, sustainable dividends with prudent long-term growth. Importantly, profits from build-to-sell residential projects will be recognized on a cash basis on settlement and the business remains focused on ensuring dividends will be cash covered over the medium term. And the benefit to shareholders of this approach is that it will provide a more predictable, stable and less rigid dividend that is based on operating earnings. So as we execute our strategy, we do anticipate moving to the lower end of this dividend payout range. So I will now declare the first quarter dividends for financial year 2026. The Board expects total combined cash dividends for Precinct Properties New Zealand Limited and Precinct Properties Investment Limited for the 2026 financial year to be $0.0675 per stapled security to be paid to shareholders. The record date for both Precinct Properties New Zealand Limited and Precinct Properties Investment Limited is 25th of November 2025 and payments will be made on the 12th of December 2025. So just to wrap up this part is that on behalf of my Board colleagues, thank you all very much for joining us here today. Now Mihi Nui, and I will now hand over to Scott.

[Foreign Language] Good morning, everyone, and welcome to the 2025 Annual Meeting of Shareholders. I am Scott Pritchard, Precinct's Chief Executive Officer and it's a privilege to be here with you today. In terms of what our plan is, we're going to give you an overview of Precinct's recent activity and our performance. Precinct's financial performance for the FY '25 period was robust with operating income before direct -- indirect expenses increasing by 1.2% on the prior year. Despite the lower average occupancy in the period and a challenging economy, the Auckland and Wellington office portfolio showed resilience with funds from operations from the investment portfolio increasing by 3.7%. After adjusting for lower occupancy, the Auckland office portfolio delivered like-for-like rental growth of 2.5%, while Wellington generated growth of around 6%. Underlying funds from operations, which includes our property and operating investments, combined with our management business rose by 6.7% to $161.4 million. We're really pleased with our funds from operations result, which reflects the removal of depreciation as a tax deduction in the period. Now this change impacted us by around 36 basis points. So landing our AFFO at $0.0654 per share really does demonstrate the resilience of our business. We're also really pleased with the operational performance over the past 12 months. The quality in strategic locations of our assets combined with a proactive management approach and increased market demand, particularly for high-quality properties has underpinned the performance of our investment portfolio. We increased the occupancy of our investment portfolio back to 97% in the second half and secured really quite significant leasing spreads over the financial year with around 19,000 square meters of leasing completed. While Wellington remains subdued, as expected, we remain very encouraged by the continued demand for premium grade office space in Auckland, which continues to surprise on the upside. Our portfolio is well positioned with under renting at 7%. And notably, our team has secured an exceptional 17% uplift on new leases in the year and outperformed valuation rents by over 5%. Before I provide an overview of the current development project commitments, I would like to touch on our approach to capital allocation and provide a bit more detail on the recent equity raising. Across our strategic initiatives, we are particularly pleased with the progress made advancing our living sector projects. We announced in August our commitment to our very first student accommodation facility at 22 Stanley Street in Auckland, which we believe to be the largest student accommodation project undertaken in New Zealand. More recently, we announced our second project for students at 256 Queen Street, a 32-level facility located close to the University of Auckland and AUT between these 2 projects, we now have over 1,600 beds under development. The Stanley Street project has been delivered in partnership with a Singapore investor Keppel with Precinct acting as the developer and development manager. While Precinct has committed to 256 Queen Street outright. It is our intention to introduce third-party capital into this project during the construction phase, and we are planning to commence a process to secure that capital very shortly. Student accommodation is an attractive investment sector globally, and we are confident that the strong Auckland market fundamentals that we see will also be attractive to capital partners. On our residential platform, Precinct is managing 3 active apartment projects on behalf of capital partners which are in varying stages of construction. The Domain Collection, a new market, which is being built by GN Construction, Fabric Stage 2 under construction and Onehunga, which is being built by Kalmar, and York House in Parnell, which is also being built by Kalmar and is due for completion in 2027. Precinct does not have any equity invested in these projects, but does earn fee income for development management services. Precinct has, however, used its balance sheet to acquire a pipeline of new residential opportunities. Over the last 18 months or so, we have secured sites in Mt Eden and Wynyard Quarter, and in College Hill in Auckland where we have recently launched Pillars, a boutique offering of 20 premium apartments on a ridge line overlooking St Mary's Bay. As we secure consents in presales and move into construction, we will look to bring capital partners to fund construction alongside our investment from Precinct. We continue to believe that the residential pipeline represents some of the very best sites within Auckland, and we are excited about the opportunities here as the residential market starts to improve. Moving now to our capital partnering strategy. Investing and value-add opportunities alongside Capital Partners leverages Precinct's expertise and repositioning, re-leasing and realizing value, delivering high returns on invested capital through what we think is a moderate risk profile. As you can see from the diagram on the right-hand side of the slide, our capital partnering strategy is set for growth as we target allocating around 20% of our balance sheet into capital partnering. We have originated $1.9 billion in capital partnerships since we launched this strategy just 3 years ago. This approach means our development equity funding is now sourced primarily from capital partners with 70% of our developments funded by third-party investors as at the end of our financial year. This weighting will move around a little bit and slightly reduce with our commitment to 256 Queen Street, but as I've already mentioned, our expectation is to introduce a capital partner for this project shortly. An improving investment market, stabilizing valuation environment continues to provide opportunities for Precinct to execute on further capital partnering initiatives. Precinct is also seeking to establish a capital partnership for PwC Tower, the building that we're in today here at Commercial Bay. We remain at an early stage, but the number and quality of parties expressing interest in the asset is consistent with our view that this tower is the very best in New Zealand. We might be a little bit biased. This process will enable the recycling of capital to support Precinct strategic growth opportunities and most importantly, into the Downtown Carpark development project, while growing its capital partnerships over the medium term. This is an exciting phase for our business, and we remain optimistic that we are very well placed to take advantage of an ensuing economic recovery. Regarding our recent equity raise, we are delighted with the strong investment demand and support shown through this process from our existing shareholders as well as new institutional investors that we welcome to our share register. Precinct targeted a $310 million raise, comprising $285 million underwritten placement and a $25 million share purchase plan. As Anne noted, the SPP, the share purchase plan received valid applications totaling approximately $52 million and Precinct accepted $15 million of oversubscriptions. This outcome or the outcome of this process, which raised $325 million in total provides us with ongoing confidence that our strategy is well supported by you, our shareholders as we continue to execute our growth strategy and position our business for sustained earnings growth. While the proceeds have been initially used to repay bank debt, it will allow Precinct to progress its $3.7 billion pipeline of growth opportunities consisting of premium office and living sector exposures alongside our capital partners. It has also allowed us to commence our second PBSA or student accommodation facility at 256 Queen Street, which I mentioned earlier. Further, the raise allows Precinct to optimize the timing and approach to capital partnering to ensure value for Precinct shareholders has maximized while maintaining a balanced approach to gearing and liquidity management. Before I hand back to Anne for the formalities of the meeting, I'll take you through our other development priorities, including in providing some concluding remarks. Our development at Molesworth Street in Wellington is nearing completion. When finished, it will be fully leased on a 21-year weighted average lease term and will deliver a yield on cost above 5% with fixed annual rental growth. This is an outstanding asset, and we're incredibly proud of it. completed during a very challenging period of cost escalation, but will be delivered later this year to allow it occupiers the Ministry for Foreign Affairs and Trade to begin moving in, in the new year. Downtown Carpark has been a major focus in the period with design advancing, negotiations with office occupiers progressing and pleasingly, an increasing interest from main contractors who are expressing strong interest in this project. We have commenced discussions with a range of potential builders, both here in New Zealand and in Australia, and we're very encouraged about the level of interest being shown. The composition of the tower -- of the towers is now finalized and in particular, the smaller tower, Tower 2, now has a 5-star hotel, which has been introduced at the base, was built to sell luxury apartments located on the upper levels. We believe the inclusion of the hotel will further enhance this world-class mixed-use project. Our expectation is that Stage 1, including the demolition, basement construction works, the podia and office tower will be the first commitment with the second stage committed at a later date. We are encouraged by the level of interest for this transformational project. Our current expectation is they're subject to adequate precommitment from office occupiers subject to funding and of course, construction procurement. And of course, our own board approval that we hope to be in a position to start the first stage in the fourth quarter of next year. Now before Anne takes us through the formalities of the meeting, I would like to finish with some concluding remarks. There's no doubt that the New Zealand -- that New Zealand's economy, particularly in Auckland and Wellington has been challenging. Despite this, Precinct has remained very active and has continued to attract capital partners and has continued to start new projects. Property valuations have stabilized and the conditions for an improvement in the investment market are now in place. There is a growing spread between investment yields and the cost of debt. And this is expected to generate further improvement in investment market activity. For the office sector, the Australian market continues to show returning investor confidence, particularly in Sydney. Further, we see the return to office as a prevailing theme with high utilization rates observed across our assets. People are coming back to the office. Leading businesses continue to prioritize premium office spaces and well located amenity-rich Precinct's to attract and retain their talent. And Precinct's market-leading office portfolio positions the company favorably to benefit from this positive trend. We believe that we are very well placed to now take advantage of an economic recovery, which we expect to occur over the near term. With a $3.7 billion development pipeline and a core investment portfolio that continues to outperform, we are excited about the next phase of our strategic rollout. Consistent with last year, our forecast dividend for the next 12 months is $0.0675 per share, following a review of our dividend policy to ensure that our future dividends are sustainable. Before I finish, I'd just like to make a couple of things. Firstly, to the team at Precinct, you have put in an enormous shift in the last 12 months and challenging economic environment, and I thank you immensely for all of your efforts. And to the Board, thank you for your continued support. Our management team is incredibly grateful to have such a supportive Board and I think for you as shareholders, you're very fortunate to you such a wonderful board. [Foreign Language] Thank you.

Thank you, Scott, very much. Now I will turn to questions. As we have not had any questions sent through via e-mail prior to the meeting, we will now open up the floor to any in-person questions and address those first before we turn to any online questions received today. So I would like now to give any shareholder present in-person here, the opportunity to ask questions of the Board, of management, of our auditors, or our legal representatives. And directors and management are also, of course, happy to answer questions from shareholders here more informally during refreshments to be held at the end of this meeting. But when asking questions, can you please state your name and advise whether you are a shareholder? And there are a couple of roving mics coming around as well. So I would now like to open the floor for any questions or comments.

Yes. We've got a microphone here, please? Thank you.

Yes. I'd just like to point out a little bit more information with regards to the capital partnerships and the -- in terms of the development margin and development risk, how you -- how we split that, if there's cost overruns or unexpected problems during the development, who's carrying that risk? And equally, obviously, if the development margin, are we carrying the upside or is it shared?

Thanks, sir. And I'll hand over to Scott to answer that question. Thank you.

That's working. Thank you. Great question. And of course, we've launched our capital partnerships 3 years ago. And so we've been engaging with capital partners and trying to understand their risk appetite and also the return requirements. And it varies is the short answer. There are some occasions where we hold the construction risk, in which case, if there is an increase in cost that we bear that. But in those instances, we generally hold all of the exposure to profit. There are other occasions where, of course, a capital partner will come in alongside us and they will share the construction risk and then they will share the development profit. So it really does vary depending on the type of capital partner that we had. Their risk appetite and also the appetite for returns. I would say to date, what we are finding is that we are enhancing generally our returns out of our projects when we're introducing capital partners. Because we're getting access to the profits, but we're also getting paid fees for service for the development management function that we're providing.

Thank you. Very good question. Thank you, Scott. Any other questions here in the room? Sir.

Hi. My name is [Saji Chen], a recent shareholder. So regarding the capital raise, recently. Because if the results appear so well, how necessary is the capital raise and because of the dilution effects on the share price, and the shareholders' value on the shares. Do you find -- do you think it's more appropriate to have a special meeting and then vote for such resolution?

Scott or Richard, would you like to...

Great. Thank you. I'll answer that. So look, whenever we are considering how we fund our development pipeline, we're always considering how we use our own capital, and we cherish our capital. At the moment, we have equity capital within the business, if you think about it this way of around $2 billion. And in front of us, we have a development pipeline of about $3.7 billion. So simple math would suggest that we don't have enough money within our sort of equity holding right now to be able to undertake those development opportunities. But what we know is that the $3.7 billion of development pipeline that we have offers us returns, which are materially ahead of our cost of capital. And so the way we think about that is we will source capital from within our portfolio. So we will recycle. We'll sell out of some assets if we're not going to meet our return expectations. But where we think we need new capital, we'll go to shareholders. And so it's a trade-off between where we source that capital from and the dilutionary impacts. Now in this instance, we think the dilution in terms of earnings per share for issuing new shares is about 30 or 40 basis points. We take that very seriously, but our view is that over the next 5 to 10 years, we will create much greater accretion or growth in our earnings by issuing equity capital now. In terms of going to shareholders for a vote, one of the things I think we could all appreciate right now, particularly in a geopolitical sense is that there's an enormous amount of risk in the market. And we felt very confident that if we used the placement and SPP structure and we went to the market quite quickly, it would reduce the amount of discount that we need to offer the new shares at and ultimately reduce risk and offer a better outcome for shareholders. If we went to a vote, it would be quite a prolonged period of time, and we would be exposed to some of the geopolitical things that are occurring right now. And even during the transaction, we were exposed to that our great friend, the President Trump issued a number of Tweets during a weekend, which impacted our offer. So all of those things are weighed up. And what I can tell you is that the Board closely considers what's in the best interest of all shareholders and feel like we've made the right decision. Thank you.

Thank you. Any other questions here in the room? Sir?

Yes, [Edwin Stringham] I'm a shareholder. Of the $350 million you raised, isn't it true about $250 million of that was going to repay the bank loan that you've got to basically buy off someone overseas not to manage our property. At the time it was suggested, you're going to be saving about $16 million a year as a consequence of doing that action. So the second part of the question, I'd like to know how much you actually did say during this past year compared with that estimate of $16 million, because on that basis, $16 million, $250 million you paid out, it was going to run about 15 or 16 years before the cost-benefit basis got to 0.

Scott, are you happy to talk to that. So that is going back to the internalization of the management contract, which was undertaken in March 2021.

Thanks, and welcome back. Good to see you again. Good question. The internalization remains a topic that's front of mind for some investors, and that's entirely understandable. The Board at the time back in 2021 took the decision to internalize management so that we didn't have to pay -- continue to pay fees to the management company. And that decision estimated that we would make savings, I think it was about $14 million a year at the time. We haven't as of today tested whether we've made those savings. My strong hunches that we have, particularly given how active we've been -- but the biggest opportunity that we've hedged by internalizing our management company is to, of course, launch our capital partnering strategy. So our management company, we've established our own management company now that's generating well over $10 million in fees now. And our expectation is that, that will grow. So we think in not just the cost-saving benefit that we've had, the opportunity to grow earnings will be quite significant, and that is through that internationalization. We're becoming the manager of other people's capital, and we think that's a great way to grow our earnings and grow shareholder value.

Thank you, Scott. Have any other questions here in room?

I was just going to follow on from that. Have you got any estimates of any of the years since that was paid out, how much you've saved? I mean it was suggested to me by the Chairman, that it could well be that you'd save more. I sort of feel that management has always tended to overestimate and I was a bit suspicious that it was going to be linear from what you just say, what you think that perhaps you have achieved the 16%.

I can confirm that over the first 3 years, we met our savings estimate target. We just haven't -- we haven't tested it this year because it's 4 years past. So we sort of feel like it's now some way behind us. Thanks.

Thank you. Any other questions from shareholders here in the room? Okay. So...

Sorry I'll join on again...

Right.Thank you.

I do have the saving numbers for you. So when we internalize, we had $14.6 million of savings from the internalization over the last few years and last year was $18 million of savings versus what that original contract would have been. And that's going to grow further those savings because of the fees that will be coming through. So getting rid of that original management contract has played out as we expected and expected to grow as we deliver that third-party capital through.

Did you say it was $18 million for the 2 years?

$18 million last year.

$14 million the year before?

$16 million the year before. And when we internalized it was -- we thought it would be about $14 million. And so that benefit and saving is coming from the fees that we generating from the third-party capital.

Thank you. Thanks, Rich. So look, if there aren't any other further questions here in the room. We will now address any questions submitted via the online portal.

[indiscernible]

Okay. So there aren't any questions coming through. So what I would like to do now is turn to the formal business of the meeting. As I am up for reelection today, I will ask Mark Tume, the Independent Director and Chair of our Audit and Risk Committee to take us through the first 2 resolutions of the meeting. So Mark, Thank you.

Thank you, Anne, [Foreign Language] everybody. I get the boring part of the meeting. As set out in the Notice of Meeting, voting entitlements have been determined as at 5:00 p.m. on Friday, the 14th of November 2025. Registered shareholders at that time are the only persons entitled to vote and only the shares registered and those shareholders' names at that time will be voted on at the meeting. Votes can be lodged by attending the physical meeting today or during the virtual meeting today or by proxies. For your proxy to be effective, it must have been received by 11:30 a.m. on the 16th Sunday, the 16th of November 2025. Proxies have been appointed for the purposes of this meeting in respect of 460 shareholders representing 66.06% of all shares on issue. Voting on all resolutions put before the meeting will be conducted by poll only, and the Board recommends you vote in favor of all resolutions. All shareholders present at today's physical meeting should have received a voting paper when registering at the registration table. This morning, if anyone does not have a voting paper, could you please raise your hand now and a member of Computershare's team will assist you. There's one just over here. No one else? Great. Shareholders will be given the opportunity to ask questions following the reading of each resolution. I ask that in the interest of fairness to all shareholders attending the meeting that any shareholder wishing to speak should be as concise as possible and be considerate to other shareholders wishing to ask questions. This year, Anne Urlwin is retiring by rotation and has offered herself for reelection. And although Chris Meads is not required to retire this role this year, in order to maintain best practice Board succession planning, the board has decided to stagger the existing reelection schedule. Mr. Meads stands for reelection with the support of the Board and is considered by the Board to be an Independent Director. Before we vote on each resolution, I will invite Anne and Chris to the podium. To address you today. I would like to invite Anne up first.

Thank you. Thank you very much, Mark. So [Foreign Language]. Good afternoon, shareholders. So thank you very much for joining us here today at your company's Annual Shareholder Meeting and for the opportunity to address you to seek your support for my reelection to the Precinct Board. I was absolutely thrilled to join the Board in 2019, and I was honored in 2023 when my fellow directors asked me to take on the chair role on Craig Stobo's retirement from the Board. I am actually passionate about places, the impact of places on our lives, on how we live, work and play, their role in New Zealand's economy, how we develop and enhance places, how we move to and through places and what we leave behind for our future generations. Precinct has a track record of success in developing and operating a diverse portfolio, such as Commercial Bay, where we are today. Bowen Campus in Wellington. And Wynyard Quarter properties here in Auckland to name a few. That success is multifaceted. Firstly, it is around assets such as mixed-use Precincts that attract people whether it be to visit, to live, to work or to play or perhaps all of those. Secondly, that success has to include meeting the expectations of a diverse range of stakeholders including you, as Precinct shareholders. Importantly, therefore, success is Precinct generating sustainable long-term value for you as the owners of this business. The company's strategy has evolved over recent years to incorporate living and capital partnerships. And your Board and the executive team continue to apply robust disciplines in the allocation of capital to projects. Just a wee bit about me. I've been a professional director for a number of years with a particular focus on infrastructure, property and commercial construction. I'm currently a Director of Infratil and Vector here in New Zealand and of an Australian infrastructure company, Ventia. I also serve on the Board of City Rail Link. My former governance roles include sharing the Naylor Love Construction Group and the New Zealand Blood Service and being a Director of Queenstown Airport, Summerset, Tilt Renewables and Chorus. It is both a privilege and a responsibility to serve you as a Director of Precinct. I would welcome your support for my reelection. And if so, reelected, I look forward to working with my fellow directors and Precinct's strong executive team to achieve ongoing success in delivering value and sustainable investment returns to you as our shareholders. So thank you for the opportunity to address you. I'm happy to answer any questions you may have of me, and I look forward to meeting many of you here today. So thank you.