AGM 2020

Nov 16, 2020

Slides

2020 Annual General Meeting. Just a few housekeeping notes before we get started in case you aren't aware. The bathrooms are located out the back black panel door to the right Towards the retail center, you'll see the signs. In an emergency, the fire evacuation stairwell is underneath the escalators downstairs, and generator staff will guide you out of the room. The emergency meeting point is down the road towards the tippet bars outside the downtown car park. Recent months due to the pandemic, today we've adopted a hybrid shareholders, proxies and guests can attend the meeting online via the Loomi platform. All attendees can watch a live webcast of the meeting Furthermore, shareholders and proxies have the ability to ask questions and submit votes virtually. With some of my fellow pressing board members either based or currently overseas, this format also allows them to be present today. Whilst not everyone is able to be in attendance at today's in person meeting, it is great to see so many of you here joining us at our Generator Commercial Bay Meeting and Event Suites. We hope that those of you who traveled to the new PWC tower this morning got here with ease. And I do encourage you to take a look around and see firsthand what the space has to offer and define architectural details of the premises. We have several precinct and generator staff present today who can help you if you're needing assistance. Turning to the results. 2020 has been without doubt extremely challenging. The effects of COVID-nineteen continue to be present at both the local and global level. And like many others, our industry and our business have been inevitably impacted. However, despite these more challenging times, Precinct has continued to perform well during the last financial year. Our results reflect the resilience of our business, the premium nature of our assets, high quality client base and the dedication of our people and partners who support it. Precinct has continued to move forward. Completing the largest development in Precinct's history this year at Commercial Bay premises in Auckland has placed our business in a very strong position. Its opening involved a huge effort by all our people and their partners and is truly a symbol of New Zealand's road to recovery and a COVID economy. What a transformational project it has been since 2012 when the old downtown shopping center was acquired. Our aspiration was to create a world class waterfront destination on a par with the best gateway cities around the world, we believe Commercial Bay has truly achieved this. As a business, we are committed to continuing on our strategic pathway to develop world class assets, enhance our portfolio and grow value for you, our shareholders, our owners. I would now like to introduce you to the members of the Board and executive team joining us today, Don Hughes, Anne Orlin, Graham Wong, Lorna Inman, Rob Campbell, Chris Judd, Scott Pritchard, George Crawford and Richard Hilda. Mohammed El Nuwami is unable to attend this year's meeting and has given his apology. As you're aware, Don Hughes is due to retire in the second half of twenty twenty as part of Precinct's Board succession planning arrangements. He will constantly be stepping down on the 18th November after serving 10 years on this board. Don has chaired both the audit and risk committee and due diligence committees. He's made a significant contribution to the audit and risk function over the past 10 years. As this is Don's last AGM, we would like to farewell him today and thank him again for the significant contribution he's made to precincts since 2010. All the best, Don. Would you please join me with our appreciation for Don? Today, we welcome Aditya Baghava to the Board as Ultimate Director for Mohammed, and he replaces Anthony Bertoldi, who has recently resigned. On behalf of the precinct board and management team, I'd like to thank Anthony in the absentia for his contribution to the business and being an alternate director for Mohammed since 2014. Importantly, in accordance with the NZX code, a majority of independent directors is maintained. We also have present with us today representatives from our auditors Ernst and Young tax advisers KPMG legal advisers Chapman Tripp and our registrar Computershare together with precinct and generator staff. Now moving to the agenda of today's meeting. We will begin with reviewing the performance and activity of Precinct over the last financial year. And following the conclusion of this presentation, we'll then take any questions you may have. We will start with in person questions from the floor before moving to any online questions received. We do welcome any feedback, and we'll consider any other matters you may properly be wanting to ask of us at the meeting today. The meeting will then proceed to the formal business, where we will consider 3 ordinary resolutions. The first one is to consider my own reelection as a director. The second is to consider the reelection of Lorna Hinman as a director and the third resolution is to consider that the directors be authorized to fix the remuneration of Ernst and Young as their auditor for the ensuing year. Due to the hybrid nature of today's meeting, questions can now be submitted through the webcast portal for those attending virtually now that the meeting has started. This can be simply be done by clicking on the speech bubble icon. This will open a new screen. At the bottom of that screen, there is a section for you to type your question. Once you've finished typing, please click the arrow symbol to send. While you can submit questions from now on, I will not address them until a relevant time in the meeting. Please also note that your questions may be moderated. Or if we receive multiple questions on one topic, we'll try to amalgamate them together. We will try to get through as many questions from the floor and those submitted online as possible. I do apologize on behalf of the Board in advance for any questions submitted online that we are unable to answer due to time constraints. In this case, questions will be followed up by an e mail after the meeting. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, I'll surely open voting for all resolutions. For those attending virtually, if you are eligible to vote at this meeting, a new polling icon will appear. Selecting this icon will bring you up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options. There is no submit or send button as the vote selected is automatically recorded. Votes, however, can be amended up until the time the poll closes at the conclusion of the meeting. I now declare voting open on all items of business. The polling icon will soon appear. Please submit your votes at any time. Should you experience any difficulty casting your vote or asking questions online, please refer to the instructions provided in the virtual annual meeting guide that accompany the notice of meeting you would have received. For those physically attending today, we do hope you will all stay and join us for some light refreshments after the meeting is concluded this morning. Before we review the 2020 highlights for Precinct, I would like to update you all today on our board succession planning. This year, Lorna and I retire in accordance with NZX Listing Rule 2.7 and being eligible, stand for reelection by shareholders. However, Lorna has announced her decision to retire from the Board in 2021. The directors wish to thank her very much for her contribution to the company since 2015, which included the development of the Commercial Bay. The Board has commenced a direct research process as part of the succession planning and is expected that a successor to Ms. Linman will be announced earlier in the year to enable a smooth transition of responsibilities. I would also like to confirm that following our annual review on director remuneration by the Board, we will not be proposing any adjustments to shareholders today. In line with last year, we are holding the director fee rates approved at the 2018 Annual General Meeting at the same level. Any new directors joining Precinct during the current financial year will be paid in line with these rates. Now moving to the highlights. As I mentioned earlier, 2020 has been an extremely challenging year. Despite this, Precinct has achieved a number of highlights for the business, most notably achieving further growth in our adjusted funds from operations, AFFO. Pleasingly and in line with guidance, Precinct's AFFO increased 5.9 percent to 0.069¢ per share, with our full year dividend to shareholders at 0.063¢ per share being paid for the 2020 financial year. This represented a year on year increase of 5%. Our portfolio metrics remain strong. We have a portfolio of properties that is 98% occupied. We also have a weighted average lease term of around 8 years, illustrating the average remaining term for all leases to expire in our portfolio. These metrics reinforce Precinct's earnings security and the stable and secure income our portfolio generates. We have also progressed our development assets during the year, which Scott will take through shortly in his presentation. While the COVID pandemic and its impacts continue to evolve, we strongly believe our strategy will continue to deliver in these more challenging times. Like many businesses, 2020 required Precinct to focus on business continuity disruptions caused by COVID. For our business, that has meant ensuring the right procedures and suitable precautionary measures were in place to help protect the health and well-being of all our people. As you know, health and safety is a highly material issue for our business. This included implementing and adopting additional health and safety requirements at all of Precinct's buildings and at construction sites when restarted in April 2020. These protocols included the physical distancing rules to everyone on-site, additional PPE gear and the ability to contract trace if necessary. I'd personally like to commend the Precinct team on the prompt action taken to plan ahead and adjust our business to operate safely under different COVID alert levels as and when changes were announced. You might recall we were due to open retail on March 28, and the Prime Minister announced the previous weekend we were moving to Level 3, which meant we were going to go to Level 4 the following week. We had to move 1500 contractors out of this building, remove all the food and alcohol, put up fences, put on security guards over that level 4 period. It was an enormous effort to try and remedy and put in place preventative measures. I congratulate management for doing that. In addition, the outstanding proactive engagement taken with our clients on implementing a range of initiatives to support those of our occupiers who needed assistance. Thank you. Our business continues to actively embed a positive health and safety culture at Precinct, and we're pleased to report that there were no significant injuries during the 2020 year. We also completed over 900 principal audit and monitoring inspections during the year and recorded on-site audit stores in excess of our performance targets at both Commercial Bay here in Auckland and Bowen Campus in Wellington. Successfully executing our long term strategy has put our business in a very strong position. AFFO for the 2021 financial year is expected to be 0.065¢ per share before performance fees and a total dividend of 0.065¢ per share is expected to be paid. Consistent with our dividend policy, we are delighted to again be providing year on year dividend growth for you, our shareholders, our business owners. Payment of the 2021 Q1 dividend were made on the 10th of December this year. Before I hand over to Scott to give a more detailed overview of Precinct's operational performance, I just want to comment a little bit on the good progress made on sustainability at Precinct. During the year, we improved our global real estate sustainably benchmark, GRESB, score from 69 to 77 above the global average of 72. Today, we can also announce our most recent 2020 Grisby store, Precinct achieved a benchmark score of 83. Pleasingly, our result was again the global average, which was 70. Grizzly is considered the global standard for ESG, environmental, social and governance benchmarking and reporting for real estate and remains our core ESG indices performance benchmark. Congratulations to management for achieving that score. Also during FY 2020, an area of focus has been on the risks and opportunities presented by climate change. By partnering with Toitu EnviroCare, Precinct has verified our carbon footprint and as a result achieved Toitu Carbon 0 Certification. This means we have been able to accurately measure our greenhouse gas emissions and put in place strategies to manage and reduce impacts. We're also reducing the portfolio's carbon intensity. Our goal is to ensure all our office buildings have a minimum Nabors NZ rating greater than 3. Currently, 4 buildings in Precinct's investment portfolio have a certified Nabors NZ building energy and reduce our emissions further. We have recently submitted to the Carbon Disclosure Product, CDP, and have now published our own climate related financial disclosures document, which identifies Precinct's risks relating to the physical climate impacts and also the transitional climate impacts, resulting from the transition to a low carbon economy based on TCFD or Task Force on Climate Related Financial Disclosures recommendations. This can be found on the Precinct website under our Sustainability section. A comprehensive response to all Precinct's ESG factors will be material to our business and can be found in our 2020 Annual Report. I encourage you all to read this if you haven't already. It will be a feature of our business going forward. The Board is totally behind management's initiatives to comply and to improve all these scores, and you'll hear more about that from the Board in the future. On behalf of my Board colleagues, management and wider Precinct team, I'd like to thank you all for joining us today. And to our shareholders, thank you all for your continued investment in Precinct during what can only be described as an extraordinary year. We look forward to advancing your opportunities and delivering sustainable returns in the year ahead. I'll now like to hand over to Scott. Thank you, Craig, and good morning, everybody. I am Scott Pritchard, Chief Executive for Precinct. As Craig mentioned, 2020 has been an extremely challenging year. However, we have benefited from having great people within our team and a very clear strategy. We have continued to refine our approach as we have progressed and now completed our 2020 vision. Our business is in a strong position, and we have delivered consistent results amidst the COVID pandemic. We have a sustainable dividend policy supported by AFFO, which is now delivering the benefits of our strategy. This is notably reflected in the uplift in Precinct's FY 'twenty one dividend guidance, which Craig just mentioned. While our investment and development portfolio are underpinned by high quality client base, strong metrics and strategic locations, asset values have been impacted by COVID. Precinct's total comprehensive income after tax was $35,100,000 which was down on the previous year following a 2.2% decline in our property valuations. From a balance sheet perspective, Precinct's gearing, as measured under borrowing borrower covenants, was 28.8 percent as at 30 June 2020. This is substantially lower than our covenant of 50%. In addition, following the $150,000,000 bank refinance, which occurred in February, Precinct's next debt maturity is not due until December 2021. In driving our business transformation, we have significantly improved the quality and the resilience of our portfolio. We have successfully divested B grade assets to invest into premium grade assets. As a result, we have attracted and retained long term leases with high quality occupiers. Our portfolio is well leased with occupancy of 98% and an 8 year weighted average lease term and provides a high degree of certainty that the rent will, in fact, be paid. This has been illustrated by Precinct receiving over 90% of its income during the New Zealand Level 3 and Level 4 alert levels. Precinct's high quality client base includes government entities, which currently account for around 30% of all of our office revenue as well as corporate investment grade occupiers, leading legal and professional services firms. A quick update on the ANZ Centre sale. The remaining 50% share in this property is progressing well. Consistent with our strategy, this is another capital recycling initiative, which allows Precinct to invest our capital into high yielding development assets. You may have heard a lot around the recent increase in the working from home trend and how this may impact our office market. Our view is that the role of the office remains demand for office space in New Zealand. To illustrate this, just 2.5% of all of our office occupiers, which Precinct has within portfolio, have indicated that they will look to reduce their office space. The majority of our occupiers have recognized that office space remains critical for the success of their business. It is a key driver in attracting talent, and it is a key driver in fostering talent. Our expectation is that prime grade office space in central cities will remain as a core aspect of any successful business. Our occupier markets remain resilient. In Auckland, while more volatility in demand from occupiers is expected, most new supply is already leased. And in Wellington, we see this market as continuing to remain strong as it is underpinned by the solid demand from central government. Before I provide an update on our recently completed developments and those which are still under consideration, I would like to give an update on our generator business. Generator has returned a solid and profitable performance for the FY 'twenty period. This has been driven by a 13% uplift in revenue despite the impacts of COVID, which essentially closed our events business for the final quarter. Our strategy of investing in the co working and flexible space is now proving its benefits across the portfolio. This is evidenced as our precinct leasing is now having some generator elements to it. Similarly, we also have clients who are growing out of generator sites and moving into precinct premises. During the year, Precinct announced the expansion of Generators offering into Wellington. Centrally located at 13 Wearing Taylor Street, the redevelopment is currently underway. This will be the 1st generator site in Wellington and comprise private offices, co working and event spaces. The property is very well located to drive value from the Wellington market, where we continue to see an increase in demand for flexible space. Now moving to our recently completed development project, Commercial Bay. Precinct officially opened the retail center to the public on the 11th June this year. This marked a significant milestone for our business and also for the Auckland City Center. Despite Commercial Bay opening under difficult circumstances from the impact of COVID, Precinct was delighted to welcome everyone to a new and exciting part of Auckland's city center. We are immensely proud to have opened Commercial Bay. It is an outstanding retail precinct that will redefine Auckland City Centre and play an integral role in its ongoing revitalization, while also being part of New Zealand's economic recovery. Pleasingly, there has also been strong trading levels over the last 4 months at the center, with sales performance being consistent with our pre COVID consumption assumptions. Food and beverage have been a key outperformer reinforcing the high quality and best in market offering, which is critical to the success of Commercial Bay. There were a handful of restaurants and some international retailers who were not able to open on opening day, and they have all since been able to open successfully. Now that we are still, fingers crossed, at Alert Level 1, Commercial Bay will continue to be well supported by Aucklanders and also those that visit Auckland City. The new PwC tower, which we are in today, had its first clients, PwC and Jarden, move in during July. The tower is now 97% leased with really strong inquiry for the remaining but very small vacant space. We're also really pleased with the progress made at the second stage of Wynyard Quarter. Construction has moved well ahead despite the impacts of COVID, and we remain on program, which is a great result and a real credit to our main contractor, Hawkins. Leasing has also progressed, and we are delighted to have the office space now 100% leased. This is particularly pleasing given that when we committed to this project, there was no leasing in place in 2018. Now a brief update on our Wellington development project at 40 Bowen Street. It is the first of a pair of buildings planned for the Bowen Campus Stage 2 site. We are delighted with the ongoing level of inquiries from occupiers for Stage 2 since the beginning of this year. Pre committed leasing currently represents 72% of the building's office net lettable area, with leasing to quality occupiers such as Fujitsu and our very own generator. With construction now well underway, completion remains on schedule for late 2022. Being able to advance 1 of the 2 new office buildings at Bowen Campus has been particularly encouraging for our business amidst a challenging economic environment. This reinforces how strong and well positioned locally prime office market in Wellington is. As you know, in May this year, we made the prudent decision to put the redevelopment of One Queen Street on hold. While this was disappointing, the deferral period has enabled us to more reliably the long term impacts on the tourism market and the New Zealand economy and ensure that the eventual redevelopment maximizes returns. Minor physical works have continued throughout the deferral period in relation to demolition and strip out works, positioning the asset for redevelopment. We are tracking well and making good progress on the options for the asset and remain hopeful of commencing construction works in 2021. While the outlook ahead will likely continue to present us with some uncertainty and some challenges, Precinct is looking forward to progressing with our opportunities. This includes our pipeline of development projects, which I have touched on today. We are also committed to growing our market position in the co working and flexible space market and taking a prudent approach in securing value add opportunities to grow value for you, our shareholders. Before I hand back to Craig to take us through the formal business of the meeting, I want to reiterate our business is in a very strong position. This is well supported by Precinct's high occupancy levels, long weighted average lease term, minimal portfolio expiry risk and the very high quality occupiers, which we are very fortunate to have as our clients. Being able to lift our dividend guidance for the FY 'twenty one period further demonstrates the successful execution of our long term strategy, and we are confident that we will continue to deliver strong results into the future. I'd like to thank both the Precinct Board and the Precinct team for their support and hard work during this extraordinary year. I'd also like to personally thank Don for his contribution to the business over the past 10 years. Your guidance and sage advice is greatly appreciated. And finally, to you, our Precinct shareholders, for your continued investment and your ongoing support. Thanks, everyone, for joining us today. Scott, modest as he is, I'd like to record this is his 10th year at Precinct as well. So thank you, Scott, for your patience, endurance and building a wonderful management team, including generator from 6 people in 2010 to around about 100 today. So congratulations to you and what you've achieved on behalf of all of us shareholders and the Board. As I stated at the very beginning of the meeting, we'll start with any in person questions and then move to any online questions. I'd now like to give any shareholder present in person today the opportunity to ask questions of the Board, management, the auditors or our solicitors from Chapman Tripp. Directors and management are also happy to answer questions from shareholders here more formally or informally during the refreshments to be held at the end of the meeting. When asking questions, can you please state your name and advise whether you are a shareholder? I'd now like to open the floor to any questions and comments. Ladies and gentlemen, what would our shareholders like ask of the Board and management? Mr. Parves, you did warn me. To the microphone. Thank you. Thank you. I'm Bruce Parks. I'm the proxy holder of the shareholder association. You recently interviewed Bob Jones, where amongst his comments, he expressed a view that precincts had lost sight of tenants' needs by restricting their view out the windows, which leads me into your customer satisfaction survey of 70%. You aim to raise it to 80%. What are your tenants telling you it's not right now? And how do you plan to change that? I think, Scott, you might want to have a crack at that one, do you? Just a very brief, parry or counterpunch, so I can use Bob's vernacular. Scott mentioned to you the percentage uptake in the new tower and our overall vacancy rates overall and the weighted average lease term. We have clients that want to come into this building, clients that want to come into our Wynyard quarter developments. So the demand is there. Can we do better all the time? And we're improving our concierge functions, the way we work in this particular precinct for the 10,000 or so workers that are present in these towers that surround the precinct. But is there anything else you want to add there for Mr. Parks, Scott? Look, I'll just great question. Client satisfaction for us is fundamental, and we have measured it for the last 10 years. And we have generally set between sort of 70% 75%. Having gone through this last period and the level of uncertainty that businesses are facing, there's a lot of fear amongst some of them, particularly earlier in the year. And so I think what we're seeing there is some people being a little bit fearful about the fact that they may have locked themselves into long term leases and wanting to be able to sit down with us and have a conversation about how we can, I suppose, foster their growth or foster their future needs? And we take that satisfaction survey really seriously. Generally speaking, if you're sitting in the 70s, that's really high for property owners because quite often, it can be quite a combative relationship between a tenant and a landlord. We're not allowed to use that term tenant and landlord in our business. We are clients. They're really important to us. And so we generally try and foster very long term relationships. We'll always seek to try and drive our satisfaction levels higher. But one of the key things that they're looking for at the moment is flexibility. And so with generator, we are definitely being able to offer more and more of that. And so that is a new way of thinking for us and also for our clients. So I think the how businesses will occupy space will evolve, and we're really trying to lead that conversation in New Zealand. Thank you. And I'll leave a question. Your Grisby score is fantastic. How do you improve that? Is it a high cost and adding more on or We have a specialist in our management team, Richard Thorta, who can talk to how he managed to achieve that amazing score of 83 from last year. Richard? Hi. Can you hear me okay? Great team, really. So a lot of team effort put behind that. So there's not a huge cost involved, but a lot of effort, a lot of work behind that. How do we improve? Certifications of our buildings. So Neighbors and Z ratings in Green Star. So the more buildings that we can build like that, the higher our score is going to be. So I'd like to see us lift that next year again. When COVID struck, obviously, you had a lot of communication with your tenants, some of whom were Clients. Sorry, clients. And you mentioned you got 90% of the rent in. Of the 10% that is out there, what is abatement and what is deferral? What's the ratio roughly? Maybe Scott would go. Yes. Yes. So through that period, we've had $1,700,000 of rental income that we haven't received. It's about fifty-fifty, which is abatement. And that's where our occupiers actually had a contractual right within their leases that if they couldn't access their premises, then they didn't have to pay rent. And the other half is rent relief that we have provided particularly to some of our retailers and the cafes that sit within our lobbies and some of those businesses that, look, if they can't access their premises, they simply can't earn a living. And so we took the approach of really supporting them through COVID. So it's about $1,700,000 in for through till 30 June. So half of that we're going to get at some point is what you're saying? Yes. No. No. What I'm saying is that $1,700,000 of rental income was not recovered, and we won't recover it through to the 30 June period. And half of that was a contractual right. The other half was relief that we offered to our occupiers, and they were generally cafe cafes in our lobbies and really small retail operators that simply just couldn't afford to pay the rent. So I can capture your name, sir. Michael Graham. Thank you, Michael. Any other queries for Janine to hand the microphone around? Hello. Okay. Well, we're satisfied. Fantastic. Well, I'll now turn to online. And there are no online questions. One online question. I haven't got a refresh on here. Unfortunately, Dan, did you want to read it out for me, Dan? Can be the proxy for the online question. Thank you. How much of an impact do you expect the Auckland CBD Road and MetroWorks to have on your performance in the coming years? Also, what are the plans to take advantage of America's Cup happening soon? Okay. On the first one, it kind of is what it is. We rile against the cones in our city and the one way nature of some of our streets. It's frustrating for the ultimate consumer clients that come through our Commercial Bay precinct as it is for our office workers. You will notice the difference when the old Queen Elizabeth Square and the area between us and Britomart is finally resolved with no cones, no timings in place. It will be amazing place in time for the America's Cup, which races commence in mid late December. This part of town will be a beneficiary of some of that. Obviously, the borders are closed. We won't have overseas tourists for some time. We don't have any visibility of that, But we expect our area downtown to be a beneficiary. The restaurants and cafes are open. They're looking forward to the business. And the more we can celebrate that through our own marketing initiatives to attract people to this part of town, the better. Okay. Nothing else from the floor? All right then. Thank you very, very much. I'll now proceed to the formal business of the meeting. As I am up for reelection today, I'll ask Anne Erlwin, Independent Director and Chair of the Audit and Risk Committee, to take us through the first two resolutions of the meeting. Thank you, Anne. Thank you, Greg, and good morning, everyone. As set out in the notice of meeting, voting entitlements have been determined as at 5 p. M. On 13th November 2020 or by their proxies. Registered shareholders at that time are the only persons entitled to vote, and only the shares registered in those shareholders' names at that time may be voted at the meeting. Votes can be lodged by attending the physical meeting here today or during the virtual meeting today or by their proxies. For your proxy to be effective, it must have been received by 11:30 a. M. New Zealand time on Sunday, 15th November. And proxies have been appointed for the purposes of this meeting in respect of 444 shareholders, representing 39.6 percent of all shares on issue. And as Chair of the Order and Risk Committee, I intend to vote all discretionary proxies I receive in favor of each resolution. Voting on all resolutions put before the meeting will be conducted by poll only, and the board recommends you vote in favor of all resolutions. And all shareholders present at today's physical meeting should have received a voting paper when registering at the registration table this morning. If anyone does not have a now and a Computershare staff member will come and give you one. Thank you. Shareholders will be given the opportunity to ask questions following the reading of each resolution. I ask that in the interest of fairness to all shareholders attending the meeting that any shareholder wishing to speak should be as concise as possible and be considerate to other shareholders wishing to ask questions. So resolutions 1 and 2 relate to the reelection of Craig Straubo and Lorna Inman respectively as independent directors of precinct. Before we vote on these resolutions, I would like to invite Craig in person and Lorna virtually to provide us with a brief background on themselves. Craig, if you would like to come up here. Thank you, Anne. Thank you to all shareholders for considering me for reelection. As you know, I've been Chair of Precinct Properties since its corporatization in 2010 and was Chair of the unit sized vehicle, AAP New Zealand Office Trust, prior to that, where I push for the subsequent changes. I often remark to financial historians amongst us that in 2010, Precinct had 6 directors, 6 staff and 6 buildings. Today, Precinct has 7 directors, 98 staff, including 35 at generator and 14 buildings with a total valuation of around $3,000,000,000 as at 30 June 2020. We've changed from being a passive office building owner with a bias developments, willing to recycle capital into better properties and most importantly, to focus on meeting the workplace needs of our wonderful clients. We now create spaces for our clients to thrive. These clients can be, on the one hand, digital natives on a monthly lease, hot desking at 1 of our generator sites to multi decade leased office tower occupiers. To achieve these range of outcomes, our management energies are focused on 3 broad emphases: people and partners, operational excellence and developing the future. With regard to the latter, you've seen the results of acquisitions completed in 2012, the subsequent planning, design and construction, which has resulted in the opening of Commercial Commercial Bay in 2020. 8 years was a long but necessary lead time for this infrastructure. However, I firmly believe that the success of Commercial Bay and all our other developments would not have been possible without a stable, experienced, collegial Board and an outstanding management team. I also hope you have noticed our improved disclosures in our communications, including our annual reports, our commitment to sustainable practices and our responsible remuneration policies. There is much to be done at Precinct, including succession planning for a strong future. I would be delighted if you elected me to serve you again. Thank you, Craig. And we will now hear from Lorna, who is joining us virtually today. Thank you, Chairman, and good morning, ladies and gentlemen. My name is Lorna Inman, and I'm standing for reelection as Director. To give you a sense of my directorship experiences, I was on the Commonwealth Bank Board, which is the largest listed company in Australia for nearly 7 years. I served on the risk, audit and remuneration committees. This has been extremely beneficial and has exposed me to the governance requirements of the Board and the necessity to assess an organizational's risk appetite and ensure we oversee the company's assets and liabilities. I have also been on the board of a large retail conglomerate where I chaired the Audit and Risk Committee and later chaired the Remuneration Committee. Currently, I am on the advisory board of a large Australian residential builder. My past executive roles include being the Managing Director and CEO of both an international company and the large iconic retailers, Target and Officeworks in Australia, which are part of the Wesfarmers Group. As you know, Wesfarmers also own Bunnings and Kmart, which have a presence in New Zealand. Whilst running Billabong International, which had over 7 50 outlets in 100 countries. I spent much time in New Zealand as the company owned several stores here. Hence, I am familiar with the country and property market. During my 7 years of tenure at Target Australia, I grew sales by over $1,000,000,000 and posted an average EBIT margin of over 8.7%. Having run Target Australia, I understand the importance of the customer and that satisfied customers lead to a successful company and increased shareholder value. I have a good knowledge of target markets and complexity of marketing brands. Also having been involved with financial services, I've been exposed to leading technology capabilities. I bring an understanding of the impact and opportunities offered by fast moving digital technology. As a director, I commit to play my part in supporting the leadership team and my fellow board members to ensure the strategy and direction of the company continues to be delivered for the benefit of shareholders. Finally, as you are aware, I have announced my intention to retire from the Board in 2020 21. Naturally, though, I will be working with my colleagues to ensure that there is a smooth transition. Thank you. Lorna, thank you. And I'm sorry if you're still listening that you can't be with us here today. We'll now turn to the resolutions. So the first resolution, the reelection of Craig Straubo. And I move as an ordinary resolution that Craig Stobo be re elected as a Director of Precinct. The resolution is set out in the notice of meeting and on the voting form you will have received. We will first take any shareholder questions from the physical floor here. Are there any questions in relation to this resolution? No. We will now take any shareholder questions submitted online. Dan is shaking his head at the back of the room there. So no questions. Check the screen to confirm. No questions. So thank you. As there are no questions, voting of this resolution will proceed to a poll. And moving to Resolution 2, the reelection of Laura Inman. I move as an ordinary resolution that Lorna Inman be re elected as a Director of Precinct. Again, the resolution is set out in the notice of meeting and on the voting form you will have received. Once again, we will first take any shareholder questions from the physical floor. Are there any questions? No. Let's just check to see whether we've got any online questions. Dan is shaking his head. Craig is in charge of the technology and no questions. Thank you. As there aren't any questions, voting of this resolution will proceed to a poll. I will now hand you back to Craig to take you through the final resolution and conclude the formalities of the meeting. Thank you. Thank you, Anne. Now moving to the 3rd and final resolution today, Resolution 3, auditors REM. I move as an ordinary resolution that the directors be authorized to fix the remuneration of Ernst and Young as auditor for the ensuing year. The resolution is set out in the notice of meeting and on the voting form you will receive. But we'll take any shareholder questions from the fiscal floor. Are there any questions from shareholders around the remuneration? Are there any from offshore, online? Nothing. Good as gold. All right. As there are no more questions, voting of this resolution will proceed to a poll. Computershare representatives will now bring ballot boxes around the room for any shareholders who have not yet voted. If you could please complete your voting paper, ensure that it is signed and placed in the boxes being brought around now. Teams are available and Computershare staff will be able to assist you with any questions. While we're just waiting, for those of you joining us online, just a reminder that you can also vote online at web.luviagem dotcom, if you haven't already done so. In a couple of minutes, I'll close the voting Okay. I'm now going to declare the voting closed. Finalized results will be announced to the NZX in due course. A copy of the announcement will also be available on our website. So ladies and gentlemen, that concludes the formal business. Thank you all very much. I beg your pardon. General question. Would you like to ask a general question? Of course, you can ask a general question. Mr. Parks? Just looking at the Board rotation and the new members, you have 3 directors who are appointed, and one of those is going to resign, but stop now. How do you get a good balance of stills across the board when you can't appoint all directors? Well, it's not quite true. We're fortunate in having 3 non executive directors appointed either by the management company or directly by yes. And they bring to us a range of skills that are global in nature, real estate specific, which we highly value. What you have as an opportunity as owners of the businesses to look at the election of the 4 independent directors. So to get the broad mix of skills, we do assessments of the current skill mix we have today and where we'd like to be in the future. So you have to sort of plan ahead 3 to 5 years what are the skills you're going to need in this business. And as I mentioned in my opening address, planning for that is underway now. Sure. But looking at case study, Mr. Jupp is going to resign. If he had gone, would you have got a similar set of stores and his appointee? Well, Mr. Judd brings global real estate experience, particularly in Australia, but also in New Zealand. And would we replace him with if he was to resign with similar skills, yes, we would. They're highly valuable skills. My point is, who replaces him? Is it you No. The 3 are not appointed by owners of the business. They're appointed by either the management company or, in Rob's case, directly by one of our shareholders because they own more than 50% of the company, which is in our constitutional rules. I'll try to drill down. Would the people who appoint the manager appoint a new person make sure they have similar skills to Mr. Judd? Or what's the arrangement there? So for appointments of the 4 independents, all the board is into the MAP skill mix. Does that satisfy the question? I might just add, Mr. Chairman, that there has been over the last 10 years since we corporatized always an opportunity for the independent directors to engage. So they've always been able to engage with the shareholders of the management company to understand what type of skill sets that would suit the pressing board. And so we've seen with Mr. Jada, Mr. El Nuami and Mr. Campbell in particular that, that set of skills is actually outstanding. Yes, we are involved in each other's appointments. It is a genuine, collegial Board of interest of trying to make sure we've got diversity thought and not just today, but to think about the future. Thank you, Scott. No, I can apologize if we can get there as quickly as you would like. All right. That does conclude the formal business. Thank you all very much for joining us today and for your participation. So I'd like now to formally declare the meeting closed and invite you to join us for refreshments and any questions for us individually or for management. Thank you so much for attending.