COVID-19 Update and Q1 Dividend

COVID-19 UPDATE AND Q1 DIVIDEND Property for Industry Limited (PFI, the Company) has today provided an update on the impact of the COVID-19 virus on the Company and announced a first quarter dividend of 1.8000 cents per share. COVID-19 Update PFI has been working closely with its tenants to understand the impact of the COVID-19 virus on their operations. On a case by case basis, a range of solutions have been agreed with a small number of tenants to share the impact between the tenant and PFI. These solutions include abatement of a proportion of rent for several of PFI's smallest tenants, as they have been significantly affected by the New Zealand Government enforced lock-down. Rent deferrals have been agreed with other tenants, and in some cases, discussions have been combined into wider lease discussions. Approximately 6% of PFI's tenants were contractually entitled(1) to some form of immediate rental relief whilst they were unable to access their premises. Discussions with PFI's tenants are commercially sensitive and are expected to continue throughout much of 2020. On 17 March 2020, the New Zealand Government announced the reintroduction of a depreciation deduction for commercial and industrial buildings. PFI estimates that this deduction will result in an increase in Funds and Adjusted Funds From Operations (FFO and AFFO)(2) earnings of approximately $1.85 million in FY20. Further, the Board and Management Team have reviewed operating and capital expenditure, and where appropriate, reduced or deferred expenditure. Finally, as reported in the Company's 2019 annual results announcement on 17 February 2020, PFI remains well placed to continue to take advantage of the current low interest rate environment. Hedging levels are largely unchanged from the position reported at that time, where an average of approximately 59% of PFI's debt was expected be hedged during 2020, with the remainder on low floating interest rates. PFI Chief Executive Officer, Simon Woodhams, notes: "Balancing these factors with the ongoing uncertainty around the impact and duration of the COVID-19 virus on the operating environment, we are still not yet in a position to quantity the impact of the COVID-19 virus on PFI's FY20 FFO and AFFO earnings. We continue to closely monitor the situation and will provide further updates as and when appropriate." Q1 Dividend Simon Woodhams continues: "As previously announced, it is our current intention to continue to pay dividends on a quarterly basis to the extent that the Company is in a financial position to do so. The first quarter dividend is based on the Company's performance from 1 January to 31 March 2020. During this period, which was by and large prior to the New Zealand Government enforced lock-down, PFI's operations performed consistent with expectations. That being the case, and recognising PFI's low levels of gearing and liquidity position, the PFI Board has today resolved to pay a first quarter cash dividend of 1.8000 cents per share, in line with the dividend paid for the same period in the prior year." The dividend will have imputation credits of 0.4925 cents per share attached and a supplementary dividend of 0.2235 cents per share will be paid to non-resident shareholders. The record date for the dividend is 15 May 2020 and the payment date is 26 May 2020. Dividend Reinvestment Scheme (DRS) The dividend reinvestment scheme will operate for this dividend with a discount of 2%. The last date for receipt of an application for participation in the DRS for the first quarter dividend is one business day after the record date, being 18 May 2020. If you have previously completed an application to participate in the DRS, you do not need to do anything further. You will receive shares instead of cash, in accordance with your application. If you wish to change your previous participation, you will need to complete a new application. PFI Chief Finance and Operating Officer, Craig Peirce, adds: "For some shareholders, who do not have an immediate requirement for the cash from dividends, the dividend reinvestment scheme allows further investment in PFI without incurring transaction costs. And whilst PFI is in a strong financial position, the scheme allows PFI to further strengthen this position, which we think is prudent in light of the ongoing uncertainty around the impact and duration of the COVID-19 virus on the operating environment. Funds raised will also assist to fund committed projects and potential opportunities." Further details on PFI's DRS can be found in the attached updated DRS Offer Document, and at: https://www.propertyforindustry.co.nz/investor-centre/dividend-information/di vidend-reinvestment/. Annual Meeting A further update on the Company's operations will be provided at PFI's Annual Meeting, which is to be held as a virtual meeting at 11.00am on 3 June 2020. For more detail on the Annual Meeting, please visit https://www.propertyforindustry.co.nz/investor-centre/annual-meeting/. ENDS ABOUT PFI & CONTACT PFI is an NZX listed property vehicle specialising in industrial property. PFI's nationwide portfolio of 93 properties is leased to 141 tenants. For further information please contact: SIMON WOODHAMS Chief Executive Officer --- Phone: +64 21 749 770 Email: woodhams@propertyforindustry.co.nz --- CRAIG PEIRCE Chief Finance and Operating Officer --- Phone: +64 21 248 6301 Email: peirce@propertyforindustry.co.nz --- Property for Industry Limited Shed 24, Prince's Wharf, 147 Quay Street, Auckland 1010 PO Box 1147, Shortland Street, Auckland 1140 --- www.propertyforindustry.co.nz Attachments NZX Form - Distribution Notice Updated Dividend Reinvestment Scheme Offer Document Notes (1) This contractual entitlement is commonly referred to as "clause 27.5". (2) Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) are non-GAAP financial information and are common property investor metrics, which have been calculated in accordance with the guidelines issued by the Property Council of Australia. End CA:00352847 For:PFI Type:CORPACT Time:2020-05-08 08:31:23