Precinct Property Limited, Annual Meeting 2025

November 8^th 2025

Precinct Property Limited (PCT)

The company will hold its Annual Shareholders Meeting at 11.30am Tuesday 18 November 2025.

The location is. Toroa Meeting Suite, Precinct Flex, Commercial Bay, PwC Tower, Level 2, 15 Customs Street West, Auckland.

You can also join the meeting online at this link.

Company Overview

The company has a stapled structure, where each shareholder receives an equal number of shares in Precinct Properties Investments Limited. This is a wholly owned subsidiary of Precinct. These shares are ‘stapled’ to the Precinct shares, meaning they can only be transferred or dealt with together.

Precinct is a city-centre specialist real estate investment company which, unlike some others, has always been an active developer. It owns a property portfolio valued at $3.2 billion (on completion value) and has invested $1.1 billion in capital partnerships with an on-completion value of $1.6 billion.

Most of the portfolio is in the Auckland CBD and the balance in Wellington. Occupancy is 97% and WALT (weighted average lease term) is 6 years.

In November 2023, the company acquired the Auckland Downtown Carpark for $122 million. It intends to commence developing the site in 2026.

In May 2025, the company announced it will develop a Purpose-Built Student Accommodation (PBSA) facility for the University of Auckland at the Carlaw Park Student Village in Auckland, and the conditional formation of a new strategic real estate investment partnership with a Singapore-based institutional investor.

In March 2025, the company announced it had entered into a conditional agreement to sell the hotel at One Queen Street in Auckland for $180 million.

In June 2025, the company announced that the sale of its 20% interest in 40 and 44 Bowen Street in Wellington was settled.

Current Strategy

The strategy is to leverage its strategic capabilities to create vibrant, mixed-use precincts that provide quality experiences for the people who live, visit, or come to work in its spaces, while delivering long-term value to shareholders.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. Precinct had expanded its living sector exposure and made its entry into purpose-built student accommodation.
2. The FY24 highlights were figures of $126.9m funds from operations, $139.3m net property income, up 5.8% from prior year and net operating income of $103.6m, up 1.5% on the prior year result.

The meeting report is available at this link.

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  The company does not have a Fee Pool, but seeks approval from shareholders for Fees for the Chair, Board members and Chairs and members of Board Committees. The company is clear that it “does not offer share incentives or share options to directors.”

The company has an ad-hoc “Due Diligence committee,” with a cap of $100,000. This effectively represents ‘headroom’ for any additional (‘special exertion’) payments. No payments were made in FY25.

Director Share Ownership:  The company has a minimum share ownership requirement (MSR) for Directors. They are required to acquire shares to the value of 50% of their base fee over 3 years. We note the Annual Report “The Board retains discretion with regard to directors and executives who do not meet the MSR requirements.” Four of the six Directors currently hold shares.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The People and Performance Committee are responsible for implementing the policy.

Incentives: The CEO is paid a short-term incentive (STI) in cash and a long-term incentive (LTI) by way of Performance Share Rights. He also participates in the Employee Share Scheme (ESS) that enables employees to acquire shares in Precinct at no cost (under the current NZ tax legislation).

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the new NZX Remuneration Reporting Template. PCT follows the template in its reporting.

The maximum STI is 133% of base salary. The measures, weightings, and level of achievement against each component are well-disclosed, with the overall STI award being 116% of base salary.

Performance rights are awarded under the LTI at 70% of base salary. Vesting then occurs after a three-year performance assessment period. Measures determining the level of eventual share vesting are well-disclosed and include  relative total shareholder return (rTSR), an absolute TSR (aTSR), which are favoured by NZSA, and growth in funds from operations.

The LTI vesting for FY25 (from the FY22 Award) represented 39% of base salary.

We note the STI has increased from 100% of base salary to 133%, and the LTI has reduced from 85% of base salary to 70%. NZSA prefers a weighting towards the LTI to ensure the CEO is aligned with the interests of long-term shareholders.

Precinct offer excellent disclosure to differentiate between remuneration earned/awarded for the reporting period as compared with remuneration paid/vested. NZSA appreciates this level of disclosure to avoid ‘conflation’ between different reporting periods.

The Remuneration Report also discloses the STI and LTI criteria for FY26.

The company is one of very few that discloses both the gender pay gap and CEO/employee remuneration ratio.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

There is no disclosure in the Annual Report around the termination conditions for the CEO.

Director Independence:  All Directors are independent.

Board Composition:  The company is one of few that participates in the IoD’s Future Director programme designed to develop and mentor the next generation of Directors. NZSA expects NZX50 companies to participate as part of a responsibility to develop and mentor the next generation of Directors.

The Annual Report includes a collective skills matrix. NZSA prefers the matrix relates to individual Directors to demonstrate how they contribute to the governance of the company.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

Christopher Judd was appointed in April 2013 and re-elected at the 2024 ASM. At the time we supported his re-election but said we would need to compelling evidence to support a further term. The other Directors appointment dates range from 2019 to 2024.

ASM Format: Precinct Property Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look for evidence that Boards are across their risk management responsibilities. 

We note the clear disclosure on page 30 of the Annual Report: “Each director has access to independent advice from specialists and/or executives within Precinct, as a means of receiving assurance information and the entire Executive Team attends board meetings in order to provide information directly to the board. The CFO, Company Secretary and other relevant Precinct staff members have unfettered access to Board members at any time and without reference to the CEO.”

Precinct offers comprehensive disclosure of the key strategic, business, climate, operational and financial risks that impact the business, as well as mitigations. There is also thorough disclosure of risk management and governance processes. 

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. The current Lead Audit Partner was appointed in July 2022.

NZSA appreciates the disclosure (in line with NZSA policy), but also observes that the Audit Firm (EY) was appointed in 1997 – almost 30 years ago. Whilst we recognise the constraints around rotating Audit Firms we are also mindful of the need to ensure Audit Firm independence.

Environmental Sustainability

Overall approach: Precinct Properties has advanced its climate-related disclosure practices in FY2025. While Precinct has significantly strengthened its technical reporting, particularly through detailed risk registers, board engagement and metrics, it has also made liberal use of adoption provisions. The NZSA considers these provisions reasonable in the context of a complex, multi-asset property business that is still maturing its data systems and methodologies for climate reporting.

Sustainability Governance: Precinct’s board retains overall responsibility for climate-related risks and opportunities, supported by an ESG Committee established in 2021. The Committee monitors ESG strategy, climate targets, and scenario use, with performance reviewed jointly by the board. The board delegates responsibility for monitoring performance against climate-related targets to the ESG Committee, the ESG sub-committees and Management. The Head of Sustainability provides regular updates on climate risks, opportunities, and operational progress. A disclosed Directors’ Skills Matrix includes Sustainability as a core competency.

Strategy and Impact: Precinct defines sustainability as “enabling sustainable and successful business” and embeds climate considerations across its investment strategy and portfolio management. The FY25 Climate Statement integrates climate into development planning and capital allocation. Climate transition and adaptation are addressed through a published roadmap that targets net-zero operational emissions by 2030, along with asset-specific adaptation plans.

Risk and Opportunity: Precinct outlines a structured process for identifying and managing climate risk through a dedicated Climate Risk Register. Physical and transition risks are described in detail, with assigned materiality ratings and documented mitigations. Opportunities (such as premium asset positioning and tenant ESG alignment) are also identified through scenario analysis under three climate pathways.

Metrics and Targets: Precinct reports emissions across all scopes (1, 2 and 3) with comparative data from FY24. Most Scope 3 categories are reported and assured for the first time in FY25, excluding Category 2 (Capital Goods). Performance against key building certification targets (e.g. Green Star and NABERSNZ coverage) is disclosed, with year-on-year progress. The company maintains its target of achieving net-zero by 2030.

Assurance: Precinct obtained reasonable assurance from Toitū Envirocare over its Scope 1 and Scope 2 greenhouse gas emissions for FY2025. Limited assurance was provided for Scope 3 Categories 3, 4, 5, and 6. However, Scope 3 Category 2 (Embodied Carbon from new developments) was excluded. NZSA recommends Precinct work toward expanding assurance coverage to all material emissions sources, and in future, consider limited assurance across other environmental disclosures beyond emissions inventories.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  There is a clear statement in the Annual Report that no donations are made.

Financial & Performance

Precinct’s share price fell from $1.28 to $1.23 (as of 10^th October 2025) over the last 12 months – a 4% fall. This compares unfavourably with the NZX 50 which rose 4% in the same period. The capitalisation of PCT is $2.0b placing it 24^th out of 115 companies on the NZX by size and makes it a large company.

¹ per share figures based off actual shares at balance date (not weighted average)

Precinct continued to increase its operating revenue, by 7% to $268m, with operating income also up 1% to $152m.

As is the case with property companies, earnings are normally dwarfed by the line item of unrealised gains/losses on investment properties. This year this impacted the bottom line negatively by -$27.6m. This is an improvement on last year’s larger -$105m and continues the trajectory of smaller write-downs. 

Consequently, NPAT was positive at $11.0m, which meant PCT delivered EPS of $0.007 and gives them a positive (albeit very high) PE ratio of 177.

The company’s debt equity ratio increased further to 0.90 after an additional $204m of debt was taken on during the year. Post balance date the company announced an equity raise of $310m to fund growth.

Despite this capital raise, the company also paid shareholders dividends of $107m for the year. Dividends were fixed at $0.0675 and are partially imputed. The payment of dividend (while raising capital) is likely related to shareholder expectations of the company as a “yield” stock. This treatment allows shareholders to make a separate decision as to whether they will participate in a (growth-focused) capital raise.

Asset prices continued to fall in FY25, and due to this, NTA per share declined a further 5% to $1.23. Shares trade at or near NTA.

In conjunction with the presentation of their Full Year results the company also provided an investor presentation.  the company expects dividends for FY 26 will be steady at $0.0675 and have included a new dividend policy following a review: Following this review Precinct has adopted a revised dividend policy based on a payout range of 80% to 95% of Funds From Operations (FFO), reflecting recurring earnings from operations.

The top 20 shareholders, all institutions, own a combined 82.89% stake in the company.

Resolutions

Precinct Property Limited

Anne Urlwin was appointed to the Board in September 2019. She is a professional director with experience in a range of sectors including construction, infrastructure, telecommunications, renewable energy, health, and financial services. She is a director of Infratil Limited, City Rail Link Limited, Ventia Services Group Limited, and Vector Limited. Anne is a chartered accountant and is a former Chair of national commercial construction group Naylor Love and of the New Zealand Blood Service, and a former director of Chorus Limited, Tilt Renewables Limited, Summerset Group Holdings Limited, and Queenstown Airport Corporation Limited. Anne was made an Officer of the New Zealand Order of Merit for services to business in 2022.

We will vote undirected proxies IN FAVOUR of this resolution.

Chris Meads was appointed to the Board in October 2023. He has over thirty years’ experience working in the banking and finance sectors in New Zealand and Hong Kong. Chris has previously worked as an economist, investment banker and was formerly the Chief Investment Officer of Pantheon Ventures, a large global private markets investment management firm with investment strategies encompassing private equity, private credit and real assets including infrastructure and property.

We will vote undirected proxies IN FAVOUR of this resolution.

The current fees were approved by Director at the 2023. ASM. The Board has commissioned PwC to prepare an independent Report and a link to this is provided in the Notice of Meeting. The Report includes comparator company data. The proposed fees set out in the Notice of Meeting are at or around 100% of the median comparator company data.

NZSA has assessed the proposed fees at falling within the upper end of its estimated range.

On this basis, we will vote undirected proxies IN FAVOUR of this resolution.

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Precinct Investments Limited

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 11.30am Sunday 16 November 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA