Speaker 1: Currakoto. Welcome to Shared Lunch. I'm Garth Bray and we're
Speaker 1: on location with the listed landlord that rents to some
Speaker 1: of New Zealand's big companies property for industry, builds, owns
Speaker 1: and manages two billion dollars worth of factory and warehouse
Speaker 1: space to some big global names, which also gives investors
Speaker 1: exposure to property assets without necessarily needing to talk to
Speaker 1: a mortgage broker. CEO Simon Woodhams has invited us here
Speaker 1: to East Tamaki to show us two stages of development
Speaker 1: under construction and already rented, and to share his thoughts
Speaker 1: on property industry in the year to come. Before we
Speaker 1: hear that some important information you should always consider.
Speaker 2: Investing involves the risk you might lose the money you
Speaker 2: start with. We recommend talking to a licensed financial advisor.
Speaker 2: We also recommend reading product disclosure documents before deciding to invest.
Speaker 2: Everything you're about to see and here is current at
Speaker 2: the time of recording.
Speaker 1: Well, Simon, thanks for inviting us here. I mean, as
Speaker 1: open homes go, this is pretty extra.
Speaker 3: Yeah, it's a pretty big open home, isn't it twenty
Speaker 3: five thousand square meters So no, no, this is the
Speaker 3: latest facility that we've completed. So we're very very proud
Speaker 3: of it. So welcome, great to have you guys here.
Speaker 1: Sure property, I guess as an investment class, it seems
Speaker 1: like it's something that an investor can kind of touch, feel,
Speaker 1: maybe understand a little bit more. Is that fair?
Speaker 3: Yes, yep, definitely. So we've got four and a half
Speaker 3: thousand retail investors, and I think for a lot of them,
Speaker 3: particularly the ones that have been with us for twenty
Speaker 3: five years. Plus the fact that it's bricks and mortars,
Speaker 3: there's actually a physical aspect to it, is a really
Speaker 3: important aspect to why they invest with us. It's certainly
Speaker 3: why myself and a lot of the team have been
Speaker 3: involved for a long time. We'd like to be able
Speaker 3: to create things and physically touch it. So no, no,
Speaker 3: I think that's probably one of the more important aspects
Speaker 3: of PFI.
Speaker 1: So where are we right now and who's moved in?
Speaker 1: Who's moving in?
Speaker 3: So we're at what we call seventy eight Springs Road.
Speaker 3: This is the Fisher and Pickle Appliants site. This is
Speaker 3: a ten and a half hectare site. So you think
Speaker 3: of rugby fields as an analogy ten rugby fields. We
Speaker 3: brought the site fifteen years ago from Fish and Pikele
Speaker 3: and what they call a sale and lease back transaction,
Speaker 3: so we brought the whole site off it and they
Speaker 3: rode a fifteen year lease to stay on the site
Speaker 3: and rent the buildings that we had. Originally they used
Speaker 3: to manufacture their appliance as I think refrigerators, washing machines,
Speaker 3: drives on the site. About thirteen years ago higher the
Speaker 3: Chinese manufacturer brought Fish from Pikele and they went to
Speaker 3: a slightly different model where they manufacture offshore and they
Speaker 3: were using the buildings here to distribute, so'd be built
Speaker 3: in Mexico or Thailand, arrive here in Auckland, be stored
Speaker 3: here and then shot out to the Nollemans of the world.
Speaker 3: About four years ago we started talking to the Fisher
Speaker 3: and Pikele appliants as exec team and with that change
Speaker 3: in business model they had they needed what we call
Speaker 3: a distribution center a DC. Yeah, we got into building this.
Speaker 3: So this is a state of the art, twenty five
Speaker 3: thousand square meter DC center. It's sustainably it's five Green
Speaker 3: star rated, so it's got all the boughs and whistles
Speaker 3: in terms of solar rainwater harvesting electric charges. You can
Speaker 3: see out there, and they've moved in and committed to
Speaker 3: another fifteen years. So for us, it's an ongoing thirty
Speaker 3: year commitment, which is pretty pleasing.
Speaker 1: That thirty year commitment. Is that a typical sort of
Speaker 1: investment horizon for p FI or is that a bit longer?
Speaker 3: So our portfolio, we've got ninety properties, predominantly here in Auckland.
Speaker 3: It's fair led it just over two billion dollars. Our
Speaker 3: average weighted least term is five and a half years.
Speaker 3: When we build new like this, it's a big commitment
Speaker 3: both for ours olves but also for the tenant, so
Speaker 3: you tend to get a longer least term up front.
Speaker 3: Other recent developments have been twelve and fifteen years, so
Speaker 3: it's pretty common to get ten years plus on that
Speaker 3: first initial commitment. So yeah, typical for the new builds.
Speaker 1: But you are potentially now looking at stuff that you're
Speaker 1: not going to actually get to the end of its
Speaker 1: life cycle or get to the end of its tendency
Speaker 1: until the middle of the next decade kind of thing.
Speaker 3: Yeah. Yeah, Well, we'd like to think this building's fit
Speaker 3: for purpose for the next fifty to sixty years. You
Speaker 3: don't want to be knocking buildings down in rebuilding them
Speaker 3: if they're perfectly good. So the design features that have
Speaker 3: gone in here is with the intention that needs to
Speaker 3: be fifty years plus. So yeah, we're a long term company.
Speaker 3: We've been around for thirty years. We celebrated thirty years,
Speaker 3: been listed last year on the NXX. So's so many
Speaker 3: companies that can say that, and so every sort of
Speaker 3: decision that we make has that long term sort of
Speaker 3: view to it, which is again part of the attraction
Speaker 3: of investing in.
Speaker 1: Property and pair five. So you're not an riit.
Speaker 3: No, but it's a very common when they talk about rets,
Speaker 3: they're talking about listed property vehicles. So some people have
Speaker 3: different structures. Ours is a simple limited lability company.
Speaker 1: How does that fundamentally differ from someone taking a direct investment,
Speaker 1: becoming a landlord themsel investing in a think scale.
Speaker 3: Really, you know a lot of your investors it shares
Speaker 3: is will have a few hundred dollars to invest. The
Speaker 3: valuation on this building on completion is over one hundred
Speaker 3: million dollars. So as a landlord, very few people have
Speaker 3: access to that type of product. And even what we
Speaker 3: would consider a smaller asset. Our average asset size is
Speaker 3: about twenty million dollars. So again, the type of investor
Speaker 3: that can take that on personally is a very small
Speaker 3: part of the population. So by having a limited liability
Speaker 3: company with a portfolio of assets, it allows the investor
Speaker 3: to own a share in a wide variety of buildings
Speaker 3: and tenants. We've got onels one hundred and thirty different tenants.
Speaker 3: A lot of them are government tenants or listed companies
Speaker 3: or international companies that sit within the portfolio. So it's
Speaker 3: a very low risk secure investment, is how we would
Speaker 3: describe ourselves.
Speaker 1: Because you're diversified across not just one site, but across
Speaker 1: different different tenants, different cities. We're around the company.
Speaker 3: Yep, so eighty five percent here in Auckland, but we've
Speaker 3: got property in Towering Napier, christ Church, Willington, New Plymouth,
Speaker 3: so yeah, it is the firstified by that, but eighty
Speaker 3: five percent based here in Auckland, which is the biggest, deepest,
Speaker 3: strongest market now of you, so you're pretty comfortable with that.
Speaker 3: But I'll get onto your take on that shortly.
Speaker 1: But in terms of the investment, I suppose a little
Speaker 1: more liquid than literally owning a share or outright in
Speaker 1: a property too, yeah, exactly.
Speaker 3: And by being listed you can trade your share on
Speaker 3: a daily basis, you can price it on a daily basis.
Speaker 3: So a lot of the property investments you see out there.
Speaker 3: If you want to buy a building by yourself and
Speaker 3: if you need to realize money, it takes a while
Speaker 3: to advertise the building, sell the building, settle the building.
Speaker 3: You've got property syndication which is a next step down
Speaker 3: where you buy one building with a group of investors,
Speaker 3: but same thing. If you want to get your money
Speaker 3: out quickly, it can take a little bit of time.
Speaker 3: Whereas you know, the New Zealand Stock Shange trades five
Speaker 3: days a week.
Speaker 1: You've got some experience in that unlisted property sector as well,
Speaker 1: haven't you. What are the advantages I suppose compared to
Speaker 1: the costs and compliance of floating.
Speaker 3: That's probably touching a little bit on the history of PFI.
Speaker 3: So PFI was originally set up in the early nineties
Speaker 3: by the original guy, Malcolm McDougall, who sold the management
Speaker 3: business that was running the portfolio at the time to
Speaker 3: amp Capital in Australia in nineteen ninety seven, I think
Speaker 3: it was and Malcolm then moved to Auckland he was
Speaker 3: based in Willington and set up another company called Direct
Speaker 3: Property Fund and that was an unlisted fund where they
Speaker 3: had a series of investors who built up a portfolio
Speaker 3: of assets and that's where I got involved. So I
Speaker 3: turned up in two thousand and three worked for Malcolm
Speaker 3: another guy, Greg Reedy, and we grew that company to
Speaker 3: about four hundred million dollars. And then in late two
Speaker 3: thousand and must have been twenty ten, Greg jumped on
Speaker 3: a plane over to Australia and convinced AMP Capital sew
Speaker 3: the management contract for PFI to our group of investors.
Speaker 3: For a couple of years we ran an unlisted fund,
Speaker 3: which has benefits in that there's not as much compliance,
Speaker 3: there's no listing regulations, et cetera. And we ran PFI
Speaker 3: as well, side by side, and then we merged the
Speaker 3: companies together in twenty and thirteen and that created this
Speaker 3: sort of an an entity of seven hundred and fifty
Speaker 3: million dollars which we've grown reasonably aggressively over the last
Speaker 3: decade through to where we are today two point one
Speaker 3: billion dollars. And it's pleasing to say we regularly get
Speaker 3: emails and people turning up to the AGM of investors
Speaker 3: and PFI have been there for the full thirty years.
Speaker 3: It's incredible.
Speaker 1: You sound like you understand them pretty well. And what
Speaker 1: it is that those PFI investors want sort a more
Speaker 1: conservative proposition than a growth rough a balanced kind of
Speaker 1: a thing. Is its chasing the income from the dividend
Speaker 1: stream rather than the capital growth.
Speaker 3: Yeah, we call ourselves a dividend stock, so a dividend company,
Speaker 3: so people tend to invest into both unlisted properly enlisted property,
Speaker 3: So PFI for a regular dividend, So we pay a
Speaker 3: quarterly dividend and have done for thirty years. We've managed
Speaker 3: to grow that dividend over that period of time, so
Speaker 3: currently our dividends about four four and a half percent
Speaker 3: per andum. And then on top of that, we've had
Speaker 3: capital growth throughout the period as well. So first and
Speaker 3: foremost we say invest for the dividends and then secondly
Speaker 3: the capital growth is the is the icon on top.
Speaker 3: But if you look at over the thirty years, we've
Speaker 3: done total returns perum of around nine nine and a
Speaker 3: half percent, so it's a it's been pretty good ride
Speaker 3: the last three or four years has been a bit
Speaker 3: tougher as interest rates have gone the way they have grown,
Speaker 3: but you know, in terms of valuations, et cetera, that
Speaker 3: we've seen them stabilize in the last six to twelve
Speaker 3: months and hopefully in the near future will start to
Speaker 3: grow away. It's the plan.
Speaker 1: You're not the only players in this game, now do
Speaker 1: you How do you compare against the competition?
Speaker 3: How do you rate yourselves? Yeah, so there's probably I
Speaker 3: think there's about ten listed entities on the x X
Speaker 3: who we compare ourselves to. I guess one of the
Speaker 3: key strategic difference with PFI is we focus solely on
Speaker 3: industrial property. There's another competitor out there who do the
Speaker 3: same and do it very well. Industrial property, particularly in
Speaker 3: the last five to ten years, has been the number
Speaker 3: one performing asset class, and by asset class, the other
Speaker 3: eset classes are obviously there's residential, there's commercial so you
Speaker 3: think office towers, there's shopping centers, and then there's health assets,
Speaker 3: so they're the mainseic classes in New Zealand, and industrial property,
Speaker 3: both on a rental growth and on a capital growth
Speaker 3: point of view, in the last decade has been number
Speaker 3: one by a long way, so you've picked the right horse.
Speaker 3: So there's some themes there that have played into our
Speaker 3: particularly in and around the COVID area. So if you
Speaker 3: look at e commerce is a big one. So you know,
Speaker 3: people like retailers are moving away from having that store
Speaker 3: on Broadway and New Market to delivering direct from the warehouse.
Speaker 3: It has been massive demand growth for warehouses like the
Speaker 3: one we're sitting in here now, direct to consumer DC
Speaker 3: discretion centers. So that's played to our into our hands.
Speaker 1: Because at the moment, I would have thought most bricks
Speaker 1: and mortar investment into any other kind of space if
Speaker 1: it's office space, you see people being sort of begged
Speaker 1: to return to the office. Yeah, you must be looking
Speaker 1: at that going cracky, glad we're not too much or
Speaker 1: at all.
Speaker 3: Yeah, yeah, we're not in that at all, which we're
Speaker 3: happy about that. I think what you've seen in the
Speaker 3: office sector is you're seen with the work from home
Speaker 3: thematic that there's no doubt that that's my view, that
Speaker 3: won't change. But the prime stuff, the A grade officers
Speaker 3: are doing very very well because people have to attract
Speaker 3: their staff back into the office. But the B and
Speaker 3: C grade stuff that the city fringe stuff that's struggling.
Speaker 3: You know, the stats will tell you that. So again,
Speaker 3: work from home. That's a thematic that's played into It's
Speaker 3: pretty hard to run a warehouse from home. You need
Speaker 3: people in the office or in the warehouse.
Speaker 1: So the more online we are and the more we
Speaker 1: are moving away from traditional sort of retail and stuff,
Speaker 1: the better you'd say your visit.
Speaker 3: It's definitely a thematic that supports us. Your original question was,
Speaker 3: you know, how do we differentiate ourselves by being solely
Speaker 3: focused on industrial. That has played into our hands the
Speaker 3: team that we've built over the last decade. You know,
Speaker 3: we call ours sales industrial specialists, and that's all we do.
Speaker 3: So we don't do healthcare assets, we don't do residential.
Speaker 3: We're all focused and know this market particularly well. So yeah,
Speaker 3: that has been a strength of ours.
Speaker 1: Let's talk a bit about the market and some of
Speaker 1: the people that you're dealing with in it. I imagine
Speaker 1: with one hundred.
Speaker 3: And twenty odd yea thirty tenant YEA one.
Speaker 1: Hundred and thirty tenants, mostly industrial, you'd be getting a
Speaker 1: pretty good sounding on how our economy is working at
Speaker 1: the moment right now, where the pressures.
Speaker 3: Are, where the opportunities are yeah, right, yeah, We've got
Speaker 3: our sales a bit of a bell weather really by
Speaker 3: having that many tenants, and they're all in different industries.
Speaker 3: So we've got, you know, kitchen manufacturers next door. You
Speaker 3: know who manufactured kitchen. So when the residential markets struggling,
Speaker 3: these guys, we hear about it from those guys. When
Speaker 3: the residential market's doing really well, they're building wardrobes and
Speaker 3: baundry systems and kitchen so we know that's doing well.
Speaker 3: We've got logistics companies that move freight around New Zealand
Speaker 3: all over New Zealand, you know, from DHL to Move Logistics,
Speaker 3: main freight, all the big guys. So we're tapped into
Speaker 3: this network of people that, you know, give us what's
Speaker 3: happening at the cold face, give us the goste. I
Speaker 3: think everyone said about twelve months ago, survived to twenty
Speaker 3: twenty five. From what we can see, it's going to
Speaker 3: be the end of twenty twenty five. It's still pretty
Speaker 3: tough out there, but there's definitely some positivity. I think.
Speaker 3: I think there's a bit of hope from a political
Speaker 3: point of view that some of the rhetoric that you've
Speaker 3: been here in the last three to six months. Will
Speaker 3: start to see some action towards the middle of this year.
Speaker 3: Interst rates is a big driver of the property market.
Speaker 3: As they go up, property prices tend to go down.
Speaker 3: You know, everyone's watching what's going to happen in the
Speaker 3: end of February. Reserve Bank. Will there be a fifty
Speaker 3: point basis cut or more or less there? There's some
Speaker 3: thematics there, the labor force. If you went back three years,
Speaker 3: a regular comment was we can't get good staff. Towards
Speaker 3: the middle of last year was how do we hold
Speaker 3: on to our good staff, as in, you know, we're downsizing.
Speaker 3: So yeah, I think there's a bit more pain to
Speaker 3: go through in the next six to nine months. But
Speaker 3: looking at our tenant base, a lot of them are
Speaker 3: large businesses that have been around for a long time
Speaker 3: and do invest for the long term. I mean Fisher
Speaker 3: and Picle. You know, they've signed a fifteen year lease
Speaker 3: with us, so they're planning on being around for the
Speaker 3: long term, which is really good. Next door, we've got
Speaker 3: another development you can see the diggers working on it already,
Speaker 3: which is another company, my Tech, who have signed on
Speaker 3: for twelve years. So that building down there will be
Speaker 3: finished towards in the next year. So there are companies
Speaker 3: making long term decisions and looking through the cycle. So
Speaker 3: for us, it's a question of you know, in our view,
Speaker 3: quality attracts quality. If we can get the product right
Speaker 3: in the right areas, then we should still continue to
Speaker 3: attract good quality tenants, which will ensure good cash flow,
Speaker 3: which means we can carry on pain and growing divid
Speaker 3: into our to shareholders. Yeah.
Speaker 1: I think in your last results you were talking about
Speaker 1: p FI effectively. I think undercharging is that the right
Speaker 1: way to put it. That you under rented sixteen percent.
Speaker 1: That means there's extra value that you could be that
Speaker 1: relies on the ability of your tenants to be financially
Speaker 1: healthy enough and see the way forward to.
Speaker 3: Pay that so exactly right. That comes back to the
Speaker 3: quality of your tenant, I guess. So we call it
Speaker 3: an under renting. So when you sign a long term lease,
Speaker 3: it's not unusual to have what we call fixed rent reviews.
Speaker 3: So for instance, this the least we've done with fish
Speaker 3: from Pikele here. Every year the rent increases by a
Speaker 3: certain amount, and that's to try and stop neither the
Speaker 3: landlord or the tenant being in a position where you're
Speaker 3: out of market, where you know you're heavily under rented
Speaker 3: or heavily over rented, it's got to be fair for
Speaker 3: both parties. And what we found the last three years,
Speaker 3: particularly since COVID is in the industrial property market anyway,
Speaker 3: there's been massive rental growth. So we've seen rents go
Speaker 3: up ten to fifteen percent per annum. So if you
Speaker 3: haven't had a rent review for three years, you could
Speaker 3: be thirty to forty five percent under rented. And so
Speaker 3: you have this rent review mechanism within the lease which
Speaker 3: allows you to bring the rent back up to a market.
Speaker 3: And conversely, if they're over rented, it brings the rent
Speaker 3: back down, so the tenant benefits there.
Speaker 1: So sixteen percent achievable.
Speaker 3: So across our portfolio, that's what the values are saying.
Speaker 3: We're under rented. Again, it's when you get access to that,
Speaker 3: when's the time and of that rent coming through. But yeah,
Speaker 3: the last couple of years we've been achieving a lot
Speaker 3: more than that in certain cases, so we had catch
Speaker 3: up rent reviews effectively or new leases. So yeah, we're
Speaker 3: pretty confident. If you look through our tenant profile again,
Speaker 3: businesses like main freight, fishrimpipal plants as DHR. These are
Speaker 3: big companies. They know the trends or what's happening in
Speaker 3: the market. One way you could say it is it's
Speaker 3: under rented, but it could also you could turn around
Speaker 3: and say a tenant where you've benefited over the last
Speaker 3: three years from not paying the market rent. And as
Speaker 3: long as you're having these conversations early on in the
Speaker 3: piece and do it in a respectful manner, then yeah,
Speaker 3: it seems to be readily achievable, which is good.
Speaker 1: We're talking about interest rates before. Do you have a
Speaker 1: personal view given where things are going? Do you claim
Speaker 1: any greater knowledge from listening to the people that you
Speaker 1: talk to.
Speaker 3: I think if you went back six months when they
Speaker 3: started cutting the interest rates is a bit of a surprise,
Speaker 3: and now everyone's thinking they're going to go very, very low.
Speaker 3: I think what's happened the last two to three months.
Speaker 3: If you look what's happening off sure in America, etcetera,
Speaker 3: they might not go as low as people think they're
Speaker 3: going to go, and it might take a bit longer
Speaker 3: to get them down there. So there's still a little
Speaker 3: bit of inflation floating around. I know our headline inflation's
Speaker 3: at two point one, but rates insurance that non tradable
Speaker 3: inflation is still pretty strong. So yeah, for what it's worth,
Speaker 3: Adrian Or seems to march the beat of his own drum,
Speaker 3: rightly or wrongly. So yeah, I don't think it's a
Speaker 3: dead suit that it's going to fall away aggressively over
Speaker 3: the next twelve months.
Speaker 1: And no idea how long it'll stay like that.
Speaker 3: Oh idea. Yeah, And that's why if you look at
Speaker 3: the leases that we sign, they have these fixed growth
Speaker 3: built into them. We have these opportunities to review the
Speaker 3: leases to market and primarily that's not just for the landladle,
Speaker 3: it's for both parties, landlord and the tenant. You've got
Speaker 3: to try and keep those rents out or around market.
Speaker 3: It doesn't really benefit anyone in the short term. It
Speaker 3: sounds great are getting these big rent reviews, but it
Speaker 3: just means you haven't been at market for the two
Speaker 3: or three years earlier. And then if you're overcharging your
Speaker 3: tenant that's not a great scenario either. It just means
Speaker 3: at some point they'll be looking around. So yeah, it's
Speaker 3: got to be fair for both parties.
Speaker 1: Australia as a market or as a potential place to
Speaker 1: invest for property. Is that ever crossed your minds?
Speaker 3: How we've looked at it in the past, it's fair
Speaker 3: to say, and at times it's been attractive depending on
Speaker 3: exchange rates. There's a tax regime that at times looks
Speaker 3: quite attractive. But what we've found under is a little
Speaker 3: bit of stick to your knitting. There's some big boys
Speaker 3: in Australia that live there, breathe there, have operated there
Speaker 3: for a long time, you know, particularly in Auckland. It's
Speaker 3: a pretty big market here and we think there's plenty
Speaker 3: of opportunities here. So you've really got to we want
Speaker 3: to knock it out of the park here in Auckland
Speaker 3: and New Zealand first and foremost. But never say never,
Speaker 3: you know, as part of a portfolio acquisition or you know,
Speaker 3: a partnership with a company that goes offshore, we wouldn't
Speaker 3: say no.
Speaker 1: So let's bring it back right here where we are now. Then,
Speaker 1: So this is a green star building, you're saying, what
Speaker 1: does that mean?
Speaker 3: So the New Zealand Green Building Council has a rating system.
Speaker 3: So yeah, we've designed the building. So right at the
Speaker 3: start you make the decision with all your consultants, your architects,
Speaker 3: the engineers that you want it to be rated by
Speaker 3: the Green Building Council, and there's a series of points
Speaker 3: that you achieve on the way through in design, in
Speaker 3: the recycling, the materials that you take away from the site,
Speaker 3: and then the finished product. And as I said earlier,
Speaker 3: it's things like you get points for solar power, for
Speaker 3: rainwater harvesting, electric charges out there, and depending on how
Speaker 3: many points do you get, you need sixty points to
Speaker 3: achieve five green stars. And so this building at the
Speaker 3: moment sitting on about sixty four.
Speaker 1: So who's asking for that.
Speaker 3: It's a global thing, that is what we're seeing. So
Speaker 3: sustainability I don't need to lecture people on that, but
Speaker 3: globally what we've seen from both tenants, from insurance companies,
Speaker 3: from finance and governments. It's been pushed onto people over
Speaker 3: the last probably the last decade, effectively, but it's ramped up.
Speaker 3: We've seen it ramped up probably in the last six
Speaker 3: or seven years. And we made a decision about four
Speaker 3: years ago that we wanted to be at the forefront
Speaker 3: of it, and we wanted to be part of the
Speaker 3: group that is now heading down that track and leading
Speaker 3: the market and that so any development we've done in
Speaker 3: the last three years has been targeting that five Green development.
Speaker 3: We've just finished another one in Mount Wellington too large
Speaker 3: buildings again one hundred million dollars plus and I've green
Speaker 3: Star rated and we're looking into a model where by
Speaker 3: our existing buildings we can start to get rating. So
Speaker 3: we're working there's a group of us working with the
Speaker 3: Green Building Council to establish a regime on how do
Speaker 3: you take an existing building and get a rating. And
Speaker 3: eventually where we'll get to is tenants will be out
Speaker 3: to go right. We want to go into a four
Speaker 3: Green Star eighting or a five Green Star and there'll
Speaker 3: be a rental premium to come into a good building,
Speaker 3: is our view. That's where it's going to do it.
Speaker 3: It's already there in the in the office buildings. You're
Speaker 3: starting to see. One of the agencies James lang Lasal
Speaker 3: did a research note middle of the last year it's
Speaker 3: between six and seven percent premium rents going into a
Speaker 3: green Star rated building. So eventually what will happen is
Speaker 3: the tenants will have a choice between Green Star non
Speaker 3: Green Star. They'll pay a different price and we think
Speaker 3: to be at the forefront. You want to be in
Speaker 3: the green Star rated buildings?
Speaker 1: Are we at the forefront here from the government's point
Speaker 1: of view in terms of setting the playing field for
Speaker 1: this kind of stuff, because I understood there's a bit
Speaker 1: of a bit of a drift to here. Maybe they're
Speaker 1: going to prehead with some of those regulation. Yeah, it's easier.
Speaker 3: I think it costs more to build a Green Star
Speaker 3: rted building. It's going to have access to capital. The
Speaker 3: compliance regime is pretty tough, so are the settings right.
Speaker 3: There's probably room for improvement, but you know, at the moment,
Speaker 3: just even getting hold of consultants that are green Star
Speaker 3: accredited is quite tough. So you know, as the market develops,
Speaker 3: there'll be more people attracted into that. I think you'll
Speaker 3: start to see you know that right itself. The residential market,
Speaker 3: you're starting to see, you know, a gain a foothold there,
Speaker 3: so it will flow through I think industrial you know,
Speaker 3: we were talking about being the set class out the
Speaker 3: back getting the work done. No one really sees it.
Speaker 3: You know, it's very rare that you see a big
Speaker 3: shiny warehouse on the front page of the herald. But
Speaker 3: you know, you'll open a shopping center or an Ikea
Speaker 3: or you know, you know, a set of flats and
Speaker 3: it's up in lights, which is fine by us. We're
Speaker 3: very happy being off the front page of the Herald.
Speaker 3: But that's the reality. So I think the industrial class
Speaker 3: is probably just out of the back a little bit.
Speaker 3: But time we'll catch it. And as I said earlier,
Speaker 3: and we're seeing in terms of finance, you talk about finance,
Speaker 3: green star rated buildings, you can get cheaper finance. So
Speaker 3: it's starting to go that way. And I think a
Speaker 3: Laney speed up is more and more of us pushed it,
Speaker 3: and most of it go back to one of your
Speaker 3: original questions around the listed competitors jump on the websites.
Speaker 3: Everyone's all the listed guys that are into it now
Speaker 3: understand it and are pushing into it. So it's here.
Speaker 3: It's not going away.
Speaker 1: Some would say we're in probably arguably the worst recession
Speaker 1: since nineteen ninety one, which is as long as I
Speaker 1: can remember. Anyway, maybe you two, I don't know whether
Speaker 1: you agree with that statement, but if you finish the
Speaker 1: sentence in now is the right time for.
Speaker 3: P FI to be doing exactly what we're doing. Really,
Speaker 3: So we've got a portfolio of assets that are really
Speaker 3: well located. They've been built, portfolio has been built over
Speaker 3: thirty years. We've got a lot of inherent opportunity that
Speaker 3: sit within the portfolio. An example is exactly here. You know,
Speaker 3: this was an underutilized site but in the middle of
Speaker 3: eat Tamie ten hectares and so we've you know, in
Speaker 3: pretty tough times, we've removed a building, we've built a
Speaker 3: world class facilidity least to a world class tenant on budget,
Speaker 3: under time, a head of schedule. So stick to our knitting.
Speaker 3: We've got plenty of opportunities within the portfolio that we're
Speaker 3: accessing and so as a shareholder you will enjoy the
Speaker 3: benefit of that going forward.
Speaker 1: What about your runway?
Speaker 3: Really enjoy what I do. We've built a great team.
Speaker 3: There's twenty six of us that sit in an office
Speaker 3: back in the city, but we all enjoy getting out
Speaker 3: to the sites, meeting with the tenants. You hear about
Speaker 3: their businesses, about their livelihoods, what they're doing, some good,
Speaker 3: some really good, some maybe not so good. But it's
Speaker 3: a real people's person sort of industry and that's something
Speaker 3: that I've always enjoyed. So yeah, whilst we've got a
Speaker 3: young team that sort of want to keep going. Hopefully
Speaker 3: we can put projects in front of them and keep developing.
Speaker 3: P five. When I was when we brought the management contract,
Speaker 3: that was a three hundred and forty million dollar portfolio.
Speaker 3: It's now about to click over two point one billion.
Speaker 3: So you know, it's been a been an area that
Speaker 3: we've enjoyed some really good success. So I'm looking forward
Speaker 3: to some more that it never stop. So exactly right,
Speaker 3: but it never stops.
Speaker 1: Good place to leave it. Thanks for watching and for listening.
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