Investa Office Fund (ASX: IOF) For personal use only · Like-for-like NPI growth for Brisbane was -8.6% 3. Percentage increase in face rents from previous passing rent to new rent

Investa Office Fund (ASX: IOF)

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2 | 2012 Macquarie Australia Conference – May 2012 | Investa Office Fund Overview

IOF

Overview

1. Re-stated due to 1-for-4 unit consolidation on 20th April 2012

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FUND

HIGHLIGHTS

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Key Financial Metrics

Half Year to 31 December 2011

31 Dec 2011 31 Dec 2010

Net profit (statutory) $172.3m $117.6m

Operating income $63.3m $71.7m1

Operating income per unit2 9.6c 10.5c

Distributions per unit2 7.8c 7.8c

31 Dec 2011 30 Jun 2011

Gearing (look through)3 24.5% 20.5%

Net tangible assets per unit (NTA)2 $3.15 $2.92

1. Adjusting for amortisation of leasing commissions previously not included operating income was $70.3m


3. Based on debt to total assets, including share of associates’ and DOF’s assets and debt

Net profit driven by positive revaluations

Operating income impacted by offshore NPI and portfolio repositioning

Gearing impacted as a result of completed buyback

NTA uplift driven by improving valuations and offshore sales results

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31 Dec 2011 Change

Weighted average cap rate 7.8% (0.1%)

Book value movement H1FY12 $57.7m 3.4%

Australian Portfolio Update

Robust performance and improved market conditions

Key Metrics 31 Dec 2011

Net property income (NPI)1 $60.3m

Like-for-like NPI growth1 1.5%

Like-for-like NPI growth2 (excl Brisbane) 5.3%

Occupancy (by income) 97%

Leased 70,684 sqm

Tenant retention (by income) 90%

Average face rental increase on renewals3 7.5%

Average incentive4 12.6%

Weighted average lease expiry5 5.3 years

Number of properties 16

19.5% of Australian portfolio leased

Positive income growth maintained

High tenant retention and rental growth on

renewals on an effective basis of 24.3%

1. Effective like-for-like income growth including amortisation of leasing incentives

2. Like-for-like NPI growth for Brisbane was -8.6%

3. Percentage increase in face rents from previous passing rent to new rent post renewal

4. On all leasing (renewals and new tenants)

5. Includes leasing completed post balance sheet date

Valuation metrics

383 La Trobe Street, Melbourne

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2.92

3.15

0.15

0.040.04

2.40

2.60

2.80

3.00

3.20

30-Jun-2011 Revaluations Buyback FX impact& other

31 Dec-2011

$

Valuations and NTA

Australian portfolio and offshore sales drive NTA

1. Based on 31 Dec 2011 book values prior to revaluation or sale at IOF % ownership

2. Includes DOF and Bastion value movements only

3. US portfolio and NVH sold


5. Includes deferred tax liability and retained earnings

Fund

Highlights

Movement in NTA per unit4

Australian values driven by Bond Street completion and lease renewals

Sale of US and Paris assets above book drives offshore values

Positive contribution from completed buyback on NTA

+8.2%

5

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61% 68%

53%

77%

17%

2%

10% 14%

4% 30%

19% 13% 16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY2012 FY2013 FY2014 FY2015

Rent review profile (by income)

Fixed Market CPI Vacant Expiry No Review

5%

7%

12%

14%

4% 3%

2%

10%

14%

4%

0%

10%

20%

30%

Vacant FY2012 FY2013 FY2014 FY2015

Lease expiry profile (by income)

Jun-11 Dec-11

De-risked lease expiry profile in the short-term

Fixed reviews comprise 4% average annual increases

Fund

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553

53

149

0

100

200

300

400

500

600

700

800

FY12 FY13 FY14 FY15 FY16+

Proforma drawn debt maturity profile1,2

Syndicate

Bastion

Unsecured multi-currency debt (undrawn)

Unsecured multi-currency debt (drawn)

Secured asset level debt

Capital Management

Gearing at low end of target range post recent acquisitions

Key Indicators Proforma1

Post acquisitions

Drawn debt2 $606m

Gearing – statutory 21%

Gearing – look through3 25%

Weighted average debt maturity 2.6 years

Weighted average debt cost 5.5%4

US asset level debt extinguished post settlement of offshore sales

Target look-through gearing range of 25% - 35%

1. Proforma as at 2 April 2012 following settlement of recent acquisitions

2. On a look through basis including share of associates’ level debt but excluding DOF fund level debt

3. Based on debt to total assets including share of associate’s and DOF’s assets and debt

4. Forward looking average cost of debt inclusive of line fees on undrawn facility

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RECENT

ACQUISITIONS

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Enhancing Portfolio Quality and Returns

A transformational opportunity

25% interest in

126 Phillip Street, Sydney 50% interest in

242 Exhibition Street, Melbourne

Acquisition price: $176.3m Acquisition price: $217.5 m

Recent

Acquisitions

Yield

(before

costs)

Yield

(after

costs)

Incremental

Cost of

Debt1

Look

through

gearing

NTA

per unit

6.8% 6.6% 5.2% 25% $3.132,3

Incremental earnings impact3,4

(cents per unit)

Forecast FY 2012 0.12c - 0.16c

Forecast FY 2013 0.84c – 1.16c

1. Calculated as the incremental cost of debt required to fund the Proposal as at 14 February 2012 taking into account undrawn debt capacity under the existing facility and a new

tranche of debt under that facility and includes, where appropriate, base rates, margins, line fees and amortisation of established fees. The majority of the debt drawn is Australian

dollar denominated with a small portion being Euro denominated. Assumed Australian base interest rate is 4.25%

2. NTA per unit decreases by approximately $0.02 due to writing off stamp duty and other acquisition costs immediately after the proposed acquisitions


4. Range shows outcomes assuming Australian base interest rates of 4.0% to 4.5%

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Australia

Europe

United States

Transition to Australian office focus

Portfolio Repositioning

0%

20%

40%

60%

80%

100%

Dec 2010 Jun 2011 Dec 2011 Post acquisitions

Strategy is to reposition the Fund to be Australia’s pre-eminent CBD office fund

Significant progress made with four of the six offshore investments sold since August last year

Recent asset sales were at an overall premium of 9.7% to 30 June 2011 book values

Geographic diversity (by value)

1

1. Post sale of US assets and NVH Building in Paris

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IOF’s Portfolio Composition

Portfolio needed re-balancing

Classification Asset Characteristics Risk/Return

Core Assets - Premium / A-grade assets

- Longer WALE (4 years +)

- Higher credit tenants

- Limited capex requirements

- 8 to 10% IRR

- Stable income profile

- Income base for distribution payments

Core Plus / Value Add

- Capable of being A-grade

- WALE to match market opportunity

- Opportunity to add value through lease-up,

refurbishment or redevelopment

- 12 to 15% IRR

- Potential short-term income volatility

- Likely higher capex spend

Tactical - Secondary markets or fringe CBD locations

- Smaller, potentially more liquid assets

- 12 to 15% IRR

- Limited longer term return potential

IOF portfolio is overweight tactical assets while underweight core and value-add assets

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SUMMARY &

OUTLOOK

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Summary and Outlook Outlook

Summary

Significant progress made leasing Australian portfolio

Four offshore assets sold

Refined portfolio to have greater domestic focus

Completed 10% unit buyback

Transformational acquisition completed

Outlook

Portfolio set for growth following significant re-leasing activity

Forecast FY12 EPU expected to be 19.6c1 and

DPU to remain at 15.6c1 (subject to prevailing market conditions)

Post acquisitions, continued focus on income and value

maximisation and more proactive capital recycling

Position IOF to be Australia’s pre-eminent CBD office fund

388 George Street, Sydney 1. Re-stated due to 1-for-4 unit consolidation on 20th April 2012

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APPENDICES

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Appendices Appendix 1

Australian portfolio

126 PHILLIP STREET

SYDNEY

242 EXHIBITION STREET

MELBOURNE

126 PHILLIP STREET

SYDNEY

242 EXHIBITION STREET

MELBOURNE

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388 GEORGE STREET

SYDNEY 347 KENT STREET

SYDNEY 140 CREEK STREET

BRISBANE

111 PACIFIC HIGHWAY

NORTH SYDNEY



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347 KENT STREET

SYDNEY 295 ANN STREET

BRISBANE

232 ADELAIDE STREET

BRISBANE

10-20 BOND STREET

SYDNEY



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105-151 MILLER STREET

NORTH SYDNEY 383 LA TROBE STREET

MELBOURNE

15 ADELAIDE STREET

BRISBANE 628 BOURKE STREET

MELBOURNE 151 CLARENCE STREET

SYDNEY

239 GEORGE STREET

BRISBANE



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Australia

United

States1

Europe1

Total Portfolio

31 Dec 2011

Total Portfolio

30 June 2011

Net property income (A$m) 60.3 10.5 13.0 83.8 177.12

Like for like NPI growth (local currency) 1.5% (19.4%) (8.6%) (3.9%) (0.6%)

Occupancy (by income) 97% N/A 87% 95% 93%

Tenant retention 90% N/A 100% 89% 61%

Weighted average lease expiry (WALE) (years) 5.3 N/A 5.2 5.3 4.8

Over/(under) renting (face) (2%) N/A 3% (1%) 1%

Portfolio NLA3 (sqm) 358,603 N/A 148,977 507,580 537,281

No. of property investments 16 - 2 18 23

Book value (A$m) 1,735.4 N/A 363.4 2,098.81 2,568.5

Portfolio Snapshot as at 31 Dec 20111

Appendix 5

Australia 83%

Sydney 46%

Brisbane 22%

Melbourne 10%

Perth 3%

Canberra 2%

Europe 17%

Netherlands 13%

Brussels 4%

Geographic diversity (by value)

1. Includes sale of all US assets and NVH Building (Paris)

2. NPI for full financial year

3. Based on IOF % ownership

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Appendices

Melbourne


Book value $202.3m

% of IOF portfolio value 11.7%

Perth


Book value $70.0m


Brisbane


Book value $460.4m


Sydney


Book value $963.2m


Canberra


Book value $39.5m


Australian Portfolio

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Appendices

Brussels


Book value €64.8m


Netherlands


Book value €220.0m


European Portfolio

Appendix 7

1. IOF has a 13.8% investment in Dutch Office Fund (DOF) portfolio of assets

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Appendix 8

Property

Location

Tenant Area

(sqm)

Lease

Commencement Lease Term

(years)

Previously vacant

10-20 Bond Street Sydney Origin Energy 4,661 Sep 2011 3.2

10-20 Bond Street Sydney AICD 3,243 Dec 2011 7.0

10-20 Bond Street Sydney Travelex 2,071 Jul 2012 9.8

FY 2012

628 Bourke Street Melbourne QBE 10,012 May 2012 10.0

383 Latrobe Street Melbourne AFP 9,679 Jun 2012 5.0

FY 2013

111 Pacific Highway North Sydney Transfield Services 6,353 Aug 20121 6.0

FY 2016

105 Miller Street North Sydney MLC 26,709 Oct 2015 5.0

Proactively addressed existing tenant needs via refurbishment and repositioning

Renewal of MLC resolves the Fund’s largest lease expiry risk for next five years

New benchmark rents negotiated for majority of major leases

Australian Major Leases Completed

1. Part level 19 lease starts November 11 for 6.8 years

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Summary of Offshore Divestments

Well progressed and solid results with offshore sales with overall premium of 9.7%

Two remaining offshore investments (Bastion & DOF)

Management fees of approx. A$1.7m pa no longer payable on sold assets

Property

Sale Price

Acquisition

Price

Book Value

30 June

2011

Sale Price

versus

Book value

Settlement

Date

Homer Building, Washington DC (80%) US$252.0m US$168.0m US$225.6m 11.7% Jan 2012

900 Third Avenue, New York (49%) US$172.7m US$107.7m US$158.9m 8.7% Mar 2012

Computer Associates, Texas (100%) US$36.8m US$53.5m US$37.2m (1.1%) Jan 2012

NVH Building, Paris (50%) €68.9m €77.7m €61.9m 11.3% Feb 2012


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Appendix 10

Deutsche Bank Place

Appendices

Key Benefits of Acquisition Key Investment Highlights

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Appendix 11

Telstra Global Headquarters

Appendices

Key Benefits of Acquisition Key Investment Highlights

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A unique opportunity

Prime assets very tightly held

Deutsche Bank Place one of Australia’s best office assets

Very few times in cycle when prime assets are earnings accretive

Materially enhances quality of Australian portfolio

Efficient re-deployment of

capital Minimal time between receipt of offshore sale proceeds and reinvestment

Earnings accretive Forecast FY13 EPU increase of between 0.84c1 to 1.16c1

Higher risk adjusted returns High quality assets, attractive lease profiles, strong tenants and earnings accretive

Increased weightings to

target CBD markets

Exposure to Melbourne increased from 12% to 19%

Maintain exposure to Sydney CBD

High quality tenants Adds Deutsche Bank, Telstra and Allens Arthur Robinson

Reduced vacancy Overall vacancy reduced from 4.7% to between 4.1% and 3.9%

Minimal capital expenditure Deutsche Bank Place built in 2005 and a premium grade asset

242 Exhibition Street recently subject to upgrade in excess of $96m

Fair price Transaction recommended by Independent Directors and confirmed fair and

reasonable by an Independent Expert

Responsible entity fee Fee linked to market capitalisation so no direct increase in RE fee

Appendices

Benefits of Recent Acquisitions

Appendix 12


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Souce: IRESS as at 1 May 2012

Appendices

Unit Price Performance

Appendix 13

2.20

2.30

2.40

2.50

2.60

2.70

2.80

Performance since announcement of acquisitions

IOF

A-REIT 200 Index (normalised)$

IOF unit price increased 11.8% over a period of 10 weeks outperforming A-REIT Index

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Documents

Investa Office Fund (ASX: IOF) For personal use only · Like-for-like NPI growth for Brisbane was -8.6% 3. Percentage increase in face rents from previous passing rent to new rent