Economic Impact - France's political instability threatens the fragile economic recovery [1] - Companies are likely to postpone hiring and investment decisions due to the instability [1]

Financial Data and Key Metrics Changes - Comprehensive income after tax improved to $31 million from a loss of $30 million last year, primarily due to a lower fair value loss [10] - Funds from operations (FFO) increased by 6.7% to $161.4 million, with underlying FFO reflecting a 3.3% increase to $0.54 per share [14][19] - The weighted average cost of debt at year-end was 5.2%, with interest coverage for the period at 2x [17] Business Line Data and Key Metrics Changes - The Auckland office portfolio delivered like-for-like rental growth of 2.5%, while Wellington generated strong growth of around 6% [11] - Commercial Bay Retail saw FFO increase by 8.3%, with occupancy remaining at 97% and specialty sales over $12,000 per square meter [36] - The investment portfolio's occupancy increased to 97%, with approximately 19,000 square meters leased over the financial year [30] Market Data and Key Metrics Changes - The Auckland premium office market remains strong with a vacancy rate of 3.3%, while secondary markets are experiencing increased vacancy [32] - The Wellington market remains subdued, primarily influenced by central government expenditure [35] - The retail sector is showing signs of recovery with improved trading conditions and anticipated visitor growth [36] Company Strategy and Development Direction - The company is focused on capital management and has launched a process to seek a capital partner for 50% of PwC Tower [5] - The development pipeline is valued at $3.7 billion, with a commitment to student accommodation and residential projects [40] - The company aims to grow its capital partnerships from $1.6 billion to $4-5 billion over the medium term [29] Management's Comments on Operating Environment and Future Outlook - The economic environment is sluggish, particularly in Auckland and Wellington, but growth opportunities are emerging [5][6] - Management expects the broader economy to improve in the latter part of the year and into 2026, supported by monetary policy easing [6] - The company remains optimistic about capitalizing on opportunities in an improving economy [41] Other Important Information - The company has updated its dividend policy to a payout range of 80% to 95% of funds from operations, reflecting a more flexible approach [18] - The InterContinental Hotel sale achieved a premium to book value, indicating strong market interest [14] Q&A Session Summary Question: Update on PwC Tower process and potential new partnership - The process is in early stages with encouraging engagement from multiple parties, reflecting strong demand for premium office space [44][45] Question: Likelihood of starting enabling works in 2026 - The company anticipates commencing enabling works next year [50] Question: Clarification on one-off items affecting FFO - One-off items include closure costs related to a hospitality venue and swap closeouts due to capital structure changes [51] Question: Guidance on FY 2026 tax benefit adjustment - A small tax expense is expected, with estimates around 30-40 basis points [54] Question: Capital partnering for 256 Queen student accommodation - Strong interest from both domestic and offshore investors, with options for university or independent operator involvement [80]

Financial Performance - Investment portfolio Funds From Operations (FFO) increased by 3.7% to $150.3 million[9, 49] - Operating Profit before indirect expenses and income tax increased by 1.2% to $152.3 million[9, 48, 49] - Adjusted Funds From Operations (AFFO) was 6.54 cents per security (cps)[9] - Net tangible assets (NTA) per security decreased by $0.04 to $1.21[48] Portfolio & Occupancy - Portfolio occupancy was 97%[7, 39, 123] - Weighted Average Lease Term (WALT) was 6.0 years[9, 39, 123] - Commercial Bay retail FFO increased by 8.3%[9, 49] and MAT increased by 3.7%[9, 123] Capital Management & Investment - Strategic exit of the InterContinental Auckland hotel for $180 million[9] - Repaid $165 million of maturing retail bonds and USPP notes[9] - New $75 million five-year wholesale bond issued[9] - Capital partnerships totalling $1.6 billion on completion value[86]

The Swedish central bank will likely reduce its benchmark interest rate by half a percentage point this year to kick-start a delayed economic recovery, according to analysts https://t.co/vOMw7EJDU9 ...

Economic Recovery - New Zealand retail sales unexpectedly increased in the second quarter, indicating a potential economic recovery [1] - Lower interest rates are starting to support household spending [1]

Economic Recovery - The UK economy experienced a stronger recovery post-coronavirus pandemic than initially estimated, based on revised official figures [1]

Population Growth - New Zealand's population growth is at its slowest pace in almost three years [1] - A sluggish economic recovery deters foreign immigrants [1] - More citizens are departing New Zealand [1]

Core Insights - Total Canadian consumer credit balances reached $2.52 trillion in Q2 2025, marking a 4.4% year-over-year increase, but only a 3% real increase when adjusted for inflation [2][3] - Average consumer total balance increased by 7% from Q1 2022 to Q2 2025, while non-mortgage debt declined by 10%, indicating rising mortgage costs are consuming more household budgets [3][4] - Regional disparities exist in non-mortgage debt levels, with P.E.I. and B.C. reporting the highest average debt levels, while Quebec and Manitoba have the lowest [4][5] Consumer Debt Trends - The average new mortgage loan amount rose 6.9% year-over-year to $368,432, highlighting ongoing affordability challenges for homebuyers [10][11] - More than two million Canadian mortgages are set to renew between 2025 and 2026, with many originally secured at ultra-low interest rates, leading to potential increases in monthly payments [13] - The overall consumer-level serious delinquency rate increased slightly to 1.77%, with Alberta having the highest rate at 2.29% [14][16][17] Economic Conditions and Market Dynamics - Mortgage originations surged 51% year-over-year in Q1 2025, reaching $82.6 billion, driven by lower interest rates and renewed buyer demand [8][9] - The Consumer Credit Industry Index declined by 1.4 points from the previous quarter to 98.8, reflecting softening consumer spending amid rising cost-of-living pressures [19] - Inflation has been a key driver of growth in consumer balances, with average non-mortgage balances rising 10% since 2022 [6]

Global Economic Trends - The former first world is largely becoming the descending world [2] - Much of the former third world is now the ascending world [2] - Edelman's numbers correlate with GDP figures and visible improvements in countries like Saudi Arabia, Malaysia, India, and China [1] Data Reliability - There are potential concerns regarding the accuracy of Edelman's numbers for specific regions, such as Nigeria and Kenya [1]

Currency Performance - India's rupee is expected to remain one of Asia's worst performers in the second half of the year [1] Economic Factors - US tariffs are adding pressure to India's fragile economic recovery [1]