SPG – Establishment of New Industrial Product

Stride Property Group (Stride) is pleased to announce the establishment of Industre Property (Industre), its new industrial property focussed investment management product. Industre is a joint venture with a group of international institutional investors, through a special purpose vehicle, and advised by J.P. Morgan Asset Management (together, JPMAM). Industre will own and develop for long term income producing purposes industrial property in New Zealand, primarily located in the Auckland region. Stride Property Limited (SPL) will contribute all of its industrial properties to Industre, which is intended to grow through the acquisition and development of industrial properties over time. Industre will be managed by Stride Investment Management Limited (SIML). The management agreement is consistent with those of other SIML-managed products, structured to reflect the activity-based focus of Industre in the initial years following establishment, during which time Industre is expected to grow in value through acquisitions and development activity. The overall economics of this management contract are broadly equivalent to the management contracts of other SIML-managed products. Following the strategic and successfully delivered initiative to grow our portfolio of industrial property, we have created Industre, an industrial sector focussed product. The creation of Industre is consistent with Stride's strategy of establishing a group of property investment management products in specific sectors to provide growth in our investment management business. Industre will be Stride's sector-specific investment management product focussed on the industrial property sector in New Zealand, with a majority weighting to the Auckland market. The vision for Industre is to grow a significant portfolio of high-quality New Zealand industrial properties. Initially JPMAM will commit approximately $70 million to the establishment of Industre and SPL will contribute 12 industrial properties owned by it. SPL will initially have an approximately 70% shareholding in Industre, with JPMAM holding the remainder. JPMAM has additionally allocated a further $115 million of capital to fund near term growth initiatives, subject to meeting certain investment return and approval thresholds, taking JPMAM's total equity committed to $185 million. This $115 million of JPMAM committed capital will result in Industre having capacity to fund initial portfolio growth of over $190 million. Over the long term, the strategy is for JPMAM to fund further portfolio growth until the respective shareholdings in the portfolio are 75% / 25% (JPMAM / SPL). J.P. Morgan Global Alternatives is the alternative investment arm of J.P. Morgan Asset Management (JPMAM). With more than $148 billion in assets under management (including USD $70 billion of real estate under management globally) and 750 professionals (as of 31 March 2019), J.P. Morgan Global Alternatives offers strategies across the alternative investment spectrum including real estate, private equity and credit, infrastructure, transportation, liquid alternatives, and hedge funds. J.P. Morgan Global Alternatives operates from 18 offices throughout the Americas, Europe and Asia Pacific. For more information see www.jpmorganassetmanagement.com The recent growth of SPL's industrial portfolio and the establishment of Industre are important steps in the delivery of Stride's strategy. Stride's future investment management strategy is to: o Maintain a diversified investment portfolio through a combination of investments in our investment management products and our directly-held portfolio. o Support and grow Stride's established investment management products through carefully considered transaction and development activity, while maintaining our cornerstone share holdings. o Grow our directly-held portfolio of commercial office properties, with a view to establishing a sector-specific investment management office product in the future. o Review new investment management opportunities in markets adjacent to the core commercial property sector. After the financial close of Industre, SPL is expected to have approximately $181 million of headroom available from banking resources to help fund this growth. Stride's FY20 cash dividend guidance remains unchanged at a combined 9.91cps. The establishment of Industre remains subject to a number of conditions, which are described in the schedule to this announcement, along with the key terms of the transaction. More information on Industre and the Stride strategy is set out in the attached presentation. End For further information please contact: Tim Storey, Chairman, Stride Investment Management Limited / Stride Property Limited Mobile: 021 633 089 - Email: tim.storey@strideproperty.co.nz Philip Littlewood, Chief Executive Officer, Stride Investment Management Limited Mobile: 021 230 3026 - Email: philip.littlewood@strideproperty.co.nz Jennifer Whooley, Chief Financial Officer, Stride Investment Management Limited Mobile: 021 536 406 - Email: jennifer.whooley@strideproperty.co.nz Louise Hill, General Manager Corporate Services, Stride Investment Management Limited Mobile: 0275 580 033 - Email: louise.hill@strideproperty.co.nz A Stapled Security of the Stride Property Group comprises one ordinary share in Stride Property Limited and one ordinary share in Stride Investment Management Limited. Under the terms of the constitution of each company, the shares in each can only be transferred if accompanied by a transfer of the same number of shares in the other. Stapled Securities are quoted on the NZX Main Board under the ticker code SPG. Further information is available at www.strideproperty.co.nz or at www.nzx.com/companies/SPG. End CA:00340389 For:SPG Type:GENERAL Time:2019-09-05 08:31:03