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Stride Property Ltd & Stride Investment Management Ltd (NZX: SPG) Business Update

Wednesday 3rd November 2021

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Stride Property Group (Stride) is providing an update to the market regarding:

• Portfolio valuations as at 30 September 2021

• COVID-19 impact and FY22 outlook, including confirmation of dividend guidance

• Update on leasing at 110 Carlton Gore Road, Newmarket, Auckland

Portfolio valuations as at 30 September 2021

The portfolio of Stride Property Limited (SPL) has been valued at $1,216.4 million as at 30 September 2021, representing a net valuation movement for the six months from 31 March 2021 of +$13.7 million or +1.1%. This includes Stride’s share of the unincorporated component of the Industre Property Joint Venture (Industre) portfolio, which is recorded as part of the assets of SPL in the Stride consolidated interim financial statements (see note 3.2 to the consolidated interim financial statements for the six months to 30 September 2021 when released for further information).

SPL’s town centre assets recorded a net valuation increase of +$11.5 million or 3.7%, and its industrial assets recorded a net valuation increase of +$20.4 million or 12.7%, with increases in both sectors primarily driven by capitalisation rate compression.

SPL’s wholly owned subsidiary, Fabric Property Limited (Fabric), which owns office assets, recorded valuations which were in line with valuations as at 31 March 2021, with a net valuation decrease of ($1.0) million or (0.15%), with the decrease primarily due to COVID rental abatement provisions.

SPL holds one further office property directly, being 55 Lady Elizabeth Lane, Wellington. Works are required to improve the seismic performance of this property, although the exact nature and timing of the works required is still being confirmed, with engineers undertaking surveys of the property. As a result, the valuation of this property reduced by the currently estimated cost of these works, contributing to a devaluation of this property by $17.3 million. SIML is working with the tenants of this property regarding any impacts that may result from the works.

The valuations as at 30 September 2021 remain subject to audit review and will be confirmed with the Stride interim results, due to be released later this month.

COVID-19 impact and FY22 outlook, including confirmation of dividend guidance

On 28 September 2021 the Government announced the introduction of the COVID-19 Response (Management Measures) Legislation Bill, which included a raft of amendments to various legislation which the Government stated was intended to assist with managing the impact of COVID-19. One of the pieces of legislation that was amended was the Property Law Act 2007, to mandate the inclusion, with effect from 18 August 2021, of an implied term requiring rent abatements in all commercial leases which do not currently include a “no access in an emergency” provision which provides for rent abatement in the event of a pandemic.

Please see the link below for details

SPG - Business Update - 031121 .pdf

Source: Stride Property Ltd & Stride Investment Management Ltd

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