Argosy Property Limited (ARG) Earnings Call Transcript & Summary

[Audio Gap] Argosy Property Limited open. First item, your directors. Shareholders are entitled to a high standard of corporate governance. To that end, the Board is focused on ensuring it retains the right composition of skills and experience to be able to deliver for all shareholders. We believe that the Board has a sound balance of practical commercial experience and technical expertise to take the company forward. There is detailed information about the Board and the 2021 annual report. However, I will briefly introduce them to you or I would, in Stuart McLauchlan. Unfortunately, Stuart has got caught by these COVID difficulties in Brisbane, and so he can't attend in person today, but he -- I believe he will be online and following us with interest. Stuart was appointed to the Board in August 2018 and as a prominent businessman and company director. He is Chairman of the New Zealand Sports Hall of Fame and SCOTT Technology Limited and a Director of EBOS Group Limited and several other companies. Next, we have Chris Gudgeon, who joined the Board in November 2018. He has been involved in property investment, development and construction in New Zealand for more than 25 years and is currently a Director of Crown Infrastructure Partners, Ngati Whatua Orakei Whai Rawa and most recently he was Chief Executive of Kiwi Property Group. Next to Chris, we have Mike Pohio. Mike was appointed in February 2019 and has over 25 years of corporate experience across a range of industries, including property investment, ports, logistics and dairy. Mike holds a number of directorships and is currently the Chief Executive of Ngai Tahu Holdings Corporation. Sorry about the trouble mix-up there, Mike. And Mike will take the chair later in the meeting when the resolutions about appointment of myself and Stuart are put. Next to Mike, we have Rachel Winder. Rachel was first appointed to the Board in August 2019. Rachel has been involved in the property sector for over 20 years in a variety of roles, including strategy, portfolio management, facilities management and development. Rachel is currently Head of Property Services for Westpac. Next, we have Martin Stearne. Martin has over 20 years commercial and capital markets experience and currently holds appointments to the NZX Listing Subcommittee, the Takeovers Panel and the Investment Committee of the Impact Enterprise Fund. He is a member of the INFINZ and ICEAngels. Finally, myself, I've been a Director since July 2013, and I have over 40 years of experience as a property lawyer, 29 of them as a commercial partner in a large law firm as well as my new role as Chairman of Argosy. I also chair the Remuneration Committee and sit on the company's Audit and Risk Committee. Sitting next to the Board, Peter Mence, the Chief Executive; and Dave Fraser, the Chief Financial Officer. We also have several other members of the management team here today. And I would also like to welcome our auditors, Deloitte; our solicitors, Harmos Horton Lusk; our registrar, Computershare; and our tax advisers, KPMG, to the meeting. The agenda for this afternoon's meeting will be as follows: as Chairman, I will deliver a brief review of Argosy's result and strategy. It will be brief because Peter will give you a lot more detail. This will be followed by a more detailed review -- sorry, this will be followed by Peter's more detailed review. Following on from Peter's review, we'll take questions from shareholders. We will then move to the formal resolutions of the meeting. And finally, we will then attend to any general business. After the meeting has been formally closed, please join us for refreshments with the directors and executive of Argosy will be available to discuss any queries. Proxies. Proxies have been received in respect of 322,759,573 shares, and these have been audited by Deloitte. There are 842,569,000 shares on issue -- sorry, not to mention the 498. So I'm now pleased to present to you a summary of the company's performance for the year ended 31 March. You'll have received the annual report and financial statements either by post or electronically, depending on your preference. As you know, the 2021 financial year, which included in 9 months of calendar 2020, certainly proved to be challenging. We are very pleased with the way the management has navigated us through the difficulties. The management team have done a great job supporting those tenants that needed it, and they did this while growing the top line and managing costs. The results reflect a combination of Argosy's high-quality diversified folio but also a management team that has done extremely well with tenant retention, strong rent reviews, leasing outcomes and who continue to diversify our funding base with our third green bond issue. Peter will speak more to the financial position and portfolio details in his presentation. I would like to take this opportunity to personally say thank you to our investors for their continued support of our green bond program, which now totals $325 million or around 40% of our debt capital funding. During the 2021 financial year, we continued to progress our green developments as well as executing our strategic acquisitions, like the $76 million acquisition of the Mt Richmond properties. While today's circumstances demonstrate where 2022 could still bring further headwinds, we believe Argosy's sound financial and portfolio position provides the resilience to manage any near-term volatility. Excuse me for a second. Our vision. We have some big long-term goals for the company over the next 10 years, primarily with an environmental focus and Peter will detail these more fully in his report. Argosy has always sought to do the right thing by tenants in the environment and our vision of building a better future aims to continue this by reducing our impact on the environment, focusing on our carbon reduction aspirations, developing more green buildings and providing better spaces for tenants and their staff by engaging more deeply and making a bigger difference in our communities and maintaining our focus on 0 harm from a health and safety perspective and by maintaining the highest levels of business behavior and accountability. For you, we believe our strategy of creating resilient and a diversified business is all about maintaining and growing our dividends, and we believe our dividend policy and debt management strategies are all directed to ensure that we can maintain those returns. The full year dividend. The Board was pleased to announce a 2021 full year dividend of $0.065 per share, an increase of 1.6% on the prior year. Argosy's business remains resilient and supported by sound capital and portfolio position. Accordingly, based on current projections for the portfolio, the Board is pleased to reaffirm our expectations of a full year dividend of $0.0655 per share for the 2022 financial year. Our dividend policy has been under some discussion for a while. First, a little bit of history. In 2017, we made a commitment to transition to an AFFO-based dividend policy in the medium term, so over 3 to 5 years. AFFO is adjusted funds from operations, which takes into account things like the needs for maintenance capital expenditure. The medium time frame for introduction of this policy has allowed us to gravitate to AFFO coverage away from our just simple percentage of net distributable income policy preceding this. In the interim period, we've done well, where there are AFFO-related payout percentages, as you can see,from the slide. Key criteria raised by investors in relation to our policy were that the dividend be cash covered, volatility be minimized and then we keep the policy simple. Sorry, from 1 April 2022, the new policy is to pay dividends of between 85% and 100% of AFFO, which we believe achieves the key criteria requested of us. We have a real focus on delivering measured dividend growth over the long term. I'll now turn to Peter, who will provide you with much more detail on our performance over -- through 31 March 2021 and the general outlook for the coming years.

Afternoon, and thanks, Jeff. I'd also like to welcome Peter Brook, one of our past directors. Thanks for coming, Peter. Appreciate it.

[indiscernible]

Good. Just as long as you Jeff has to throw, we'll be in good shape. Of course, today is a combined Auckland roadshow and the Annual General Meeting. So I'll run through some bits and pieces on the portfolio and try to bring you up-to-date more fully on the way through. It has certainly been anything but a normal year. And I'm very pleased -- thanks, mate. I'm very pleased with the efforts made by the management team, some of who are sitting down the back, and I'm sure they do have a packet of Jaffas. Through the lockdown 4, to make sure that we didn't miss any targets, we got the valuations completed on time and all the audit and everything else was completed as required. We didn't lose any time on the way through that. We were kind of fortunate and that only 3 days prior to that, we'd done a full lockdown business continuity test. So we did know that everything was going to work. It's somewhat harder to get them back in the office, but great result. Appreciate that. So we're very pleased to have delivered a solid result in an abnormal year. The increase in distributable income was really solid, and I was really pleased to see that. The NTA up solidly on revaluations, and our revaluations and rental growth, neither of those things would we have expected when we were sitting in the middle of lockdown 4 at the beginning of the financial year. So the dividend for the year was able to be maintained and, as Jeff just said, look to increase that for the year ahead. Turning to some of the corporate goals. Jeff said we've got some big corporate goals, and we want to see 50% of the portfolio moving into green assets as defined by our green framework and that's online if you want to get any more detail on that. But that's quite a bit, and we're not doing that by just going out and building new buildings. We're doing a lot of that by redeveloping assets that we currently have. Now if anyone's had the tenacity to read through the 400 pages or so, what's the carbon report, then you'll see that embodied carbon is an important part of what we're focusing on for the years ahead, and redoing and repositioning existing assets is an important way to avoid increasing embodied carbon, which is basically the carbon involved in demolishing and reconstructing an asset. Can you go back one? So we've got some targets in terms of reducing our carbon discharge. We want to see that come back. We've got a number of projects, and you see there's a target to grow the portfolio to $3 billion. That doesn't mean we're going out on a big spending spree. Most of that activity will be inwardly focused working with existing assets with existing tenants or, in many cases, both. Now that obviously means that we'll have a lot more to do in the development area of the world. And that means that we have had to take some steps to upskill in that development and development management area. With support from some of the directors, we've established a new development department. We're recruiting specialized assistance into that area to make sure that we can deliver in terms of time, cost, quality and green scope within those development works. So that's going to be an exciting part of what we're doing. But our view is that it's quite expensive to go out and simply acquire assets in the market. We've got assets already in the portfolio that we can upgrade and add value to. We've done this long enough now to know that we get a better rate of return out of assets that we've had at hand and developing ourselves because it means that we're not un-cutting some of the corners that might have been cut to make a development profit. So we're looking at an increased engagement with the social side of the business to try and get more leverage and better relativity with our environment and, of course, the carbon neutral rating. Now with the carbon report, I think most people will understand that we will have to have a carbon 0 aspiration. The question is within what time frame. The business is already carbon 0. We've got the first carbon 0 certified building in New Zealand, and that was really pleasing and some great work from the team to pull that together. Obviously, the trick is to make sure that we can progress through the rest of the portfolio as well. So there's quite a bit of work to go on in there. The portfolio has come through the year in reasonably good shape when you consider the year we've been in, in particular. The weighted average lease term has remained fairly good at 5.5 years, occupancy at 99%. We're always focused on occupancy and forward lease expiries. Empty buildings don't do many dividends. Like-for-like rental growth, surprisingly strong during the year at 6.3%. And certainly a surprise to see that amount of growth, $158 million worth of growth in the property market. Now out of that growth, the star performer, obviously, is the industrial sector and equally the Auckland market being quite strong. I won't spend a lot of time on this slide. It really shows a snapshot of the portfolio, and you'll see that the portfolio value by sector is sitting within bands. Just on half of the portfolio is industrial property and a relatively modest amount sitting on the retail space. That is since we sold, for the second time, the Albany Lifestyle Center. So that one has finally settled. The portfolio value by region, again, sitting where we target it to be with the vast majority, over 70%, sitting in the Auckland market. Portfolio value by asset mix showing that the vast majority of the portfolio is sitting on solid core properties and a relatively modest amount sitting in the value-add chart. I've got another slide on value add because, as I said, that's where most of our expansion activity will be focused in the years ahead. So these are the value-add properties, and at the current book value, there's around $337 million worth of those. Some of the big ones, 224 Neilson Street is a large industrial site that we have a good holding return off at the moment, but we will be looking to redevelop that and the Mt Richmond property, quite a bit of work to go on there. That is largely a vacant site. There is yard return offered at the moment, giving us a good holding return, extremely well positioned adjacent to some other assets we already have in the portfolio and a good opportunity to grow going forward. In particular, we want to make sure that, that development is carbon neutral. Then, of course, there's activity we already have underway in the portfolio with the 8-14 Willis Street now 11 level building we're constructing for Statistics New Zealand. We've got 2 properties sitting in there in Carlton Gore Road, and one of those we expect to go vacant. The other one, we will -- our central themes is we'll relocate the remaining tenant into that property, complete an upgrade of the property they moved out of, then move them back, then upgrade the new property. So that'll get us through the most difficult period there. We're pretty confident with those assets. We've already got another building that we've just upgraded further down the street, very similar. We did that for Kainga Ora, Housing New Zealand, and that was a 4-star green building and is performing rather well. So I mentioned 8-14 Willis Street in Wellington. Now we've joined that with what used to be Stewart Dawsons Corner and putting a new asset together there, basically retaining the existing structure of 8-14 Willis Street, retaining the historic facade of Stuart Dawsons Corner and building a new targeting 6-star green asset behind that. The office space for 8-14 Willis Street fully let to Statistics New Zealand, including the additional floor. Retail space, we're working on leasing now. The Stewart Dawsons Corner, that was going to be a largely retail development, but as most people will understand, with the lockdowns, tourism retail hasn't exactly been the highest performing asset. So we're changing the upper levels of that building to offices and leasing the lower levels. We've got good inquiry and good progress with those leasing activities. I covered the revaluations earlier on, so I won't go into a great deal of detail. You can see the metrics there, a pretty solid result for us during the year. The market seems to be continuing to show good signs of strength, particularly in firming cap rates but also in rental growth more recently. We had a couple of good rental increases from some of those assets during the year. So by location, Auckland strongest and by sector, industrial strongest. Distributable income. Well, we all thought at the beginning of the year, this could have been a problem. And point of fact, there's been a solid increase in distributable income during the year, which has enabled us to move towards that AFFO-based dividend distribution model that the Chairman was talking of. So we take some adjustments out of the profit before tax. Obviously, we take out the revaluation gains as not being distributable. We take out impairment from assets that are held for sale. And then we deduct for losses or gains on disposal, take out the derivatives, which is the value of fixing the interest rates. Insurance proceeds, for us, that was the proceeds that we've received during the year for the 7 Waterloo Quay development. And then, of course, earthquake expense and recoveries. That gives us a gross distributable income from which we deduct depreciation and the current tax expense. That gives us a net distributable income gain during the year. So moving to the adjusted funds from operations. So this is what the Chairman was talking about in terms of developing a sustainable dividend policy. And it actually worked out reasonably well during the year with an 89% payout. So you've got adjustments for the amortization of rental incentives and leasing costs and then capitalization for tenant incentives and leasing costs. What we call maintenance capital expenditure, our maintenance capital sounds like a bit of a misnomer. How can it be both? But it is the capital expenditure that we're putting into the portfolio to maintain the current rental income. So if we need to replace a roof or upgrade a lobby, we're not generating additional income. We're not solving a vacancy for that. We're simply maintaining the building. It's still capital, so we deduct that off to bring us to a balance on what is a reasonable sum to be distributing. Next slide. We're really pleased, and I was particularly pleased to get another green bond away during the year. And this is really good from a financial perspective in terms of diversifying the funding base for the business, but it's equally good from a cultural base because it means that what we're doing is funding the business the way we're managing, growing and developing the business. And there's a level of congruity that I think is really important there. That leaves us with a weighted average debt tenor to 31 March of 4.2 years, so reasonable improvement during the year. The lease expiry profile. Obviously, what we want is no near-term expiries, and what we're looking for is to try and have a relatively flat expiry profile over the years ahead. This chart actually works relatively well for us because we had quite low year-end vacancy. And we've actually done rather well over the last 10 years at maintaining a relatively low vacancy on average. So we must be doing quite a good job on keeping the buildings full. Particularly pleasing out of this, though, is if we look at the forward expiries that we've got over the remainder of this year and the year ahead, there's really good activity with early renewals on some of those, and we're not expecting lease expiries to be keeping us all awake for the next year. Turning to what we're seeing in the market in the 3 main sectors and what we've seen really with the pandemic lockdown is an acceleration of some of the changes that we've already seen in the market. So there were structural changes already evident. We're seeing an acceleration of some of those. So looking at the industrial sector first, we're seeing some giving from the retail sector to industrial. Industrials obviously tracked along fairly well, as you can see from the revaluation results and equally from rental growth, but we're seeing in the retail sector a move more towards what we call a gray store or a dark store. So distribution for stuff we buy online directly from a warehouse and follow that to its logical conclusion, you buy your groceries online, that becomes all automated. The first time it sees the light of day is when it's delivered to your door. So we're seeing some acceleration and desire from tenants moving into those spaces. When we had the first lockdown under Level 4, we ordered our stuff from the supermarket online. What actually happened was the stock came into the supermarket, somebody put it on the shelf, we ordered it, somebody took it off the shelf, put it in a box and sent it to us. So taking out that middle obviously saves on rentals for the tenants, that saves on deterioration of product for us, and it means that we get it faster. What we saw during that first lockdown was some of the operators actually closing some stores and using them physically as a warehouse so that they could fulfill those online deliveries. Now all that technology was in the market prior to lockdown. It just meant that it started to be focused on and used. Supermarkets in particular, obviously, like us to impulse buy. That's why the lollies are at the reception. We don't do that so much online. But with the lockdowns, the move and the cost savings have floated back to the top. So structural change with retail giving to industrial. In the commercial office sector, obviously, in Auckland, we all look to work from home for a bit. And some businesses thought that this might be a long-term option and a way to save some costs. So there's been some space released to the market for sublease in the market, and it'll take a while for that to be picked back up again. Traffic volumes on the way and on a Monday morning would suggest that it's not as strong as it might have been expected to be. And indeed, some of the research globally is now showing that rather than people working from home full time, they're working from home 1 or 2 days a week. And that means that, again, this is picking up on some research that we've seen. And what we're seeing in the portfolio, a lot of tenants are not necessarily taking less space, but they're rethinking the way they might use that space. So fewer smaller desks and more collaborative working space, a more common area. So again, trends that we've seen in the market. At Argosy, we've been comfortable with flexible working arrangements in the office and at home or indeed in the car and from some of the properties for a while. We've just seen an acceleration of some of those things. At Wellington, the effects have been somewhat more muted. And the simple reason for that is Wellington had an earthquake and a lot of them were still working from home or working semi remotely because they didn't have the new stock on as quickly as they'd hoped. Next, Steve. So outlook. Looking ahead, obviously, we've got further issues with the pandemic at the moment, and we expect that to remain challenging for some time. We've -- first time being remote has been an advantage in New Zealand. Isn't it? Vaccination rollouts have been more of a stroll out than a rollout. They might have taken a little bit longer, and it seems that many of the targets that we've been seeing are going to be missed. However, central banks globally are probably looking through many of the inflation projections that we've seen. And indeed with the increased costs of sustainability and greening across countries, there's probably -- we're probably looking at a countering influence of increasing costs and impact on GDP. Key areas a focus for us, perennially. Obviously, we need to be focused on the structural changes, some of which I've outlined. But at a more detailed level, we need to be focused on what tenants want in the future on getting those lease expiries addressed, making sure that the portfolio is properly positioned for rental growth, sustainable rental delivery and that we -- our capital is properly addressed and looked after in the future. Property fundamentals surprisingly remain relatively strong. We're dealing with a bit of an oversupply in the Auckland office market as I've mentioned. How long that lasts, it will depend on what's the net absorption or the amount of new space the market takes up. But overall, the property fundamentals are still looking relatively strong, and we're pretty comfortable with the way those are presenting. You should have a -- I'll leave to Jeff then.

Thank you, Peter. I will now open the meeting for questions about the company's performance generally. Other issues can be addressed as general business later in the meeting. I would like to remind you that only shareholders, proxy holders or a shareholder company representatives have a right to speak. In addressing the chair with questions, would you please clearly state your name and advise whether you are a shareholder, a proxy holder or a shareholder company representative. If you have a question, there are people with microphones who can assist. Do I have any questions?

Thank you. My name is [ Dennis Gochalk ]. I'm a shareholder. My question is twofold. We see in the press that interest rates are likely to rise. What impact will that have, a, on income; and b, on the valuations that we get for the properties?

Okay. Obviously, those are factors we take into account in our forecasts and in our debt management strategies. But I think it's probably more appropriate that I ask our CFO to respond in more detail. Dave, could you do that? You just need a microphone. Yes. Thanks, Janice.

Is it on? Yes, that's a very good question. Obviously, we forecast out 5 or 6 years, and we take into account potential interest rate rises. So we'll look at the reserve bank's projections, and we look at the consensus market projections. So we understand that the probability is that there will be some interest rate rises, and that will impact our earnings, of course. But we're certainly planning for that. In terms of valuations, obviously, any interest rate rises could impact both share values and direct property values. And again, we take that into account as well in our gearing ratio. So -- our gearing ratio is between 30% to 40%. So we plan -- at the moment, we're sitting at 32%. So we're planning for a potential softening in the market, and we will not have to sell any assets as a result of that. So that's what we're aiming for at the moment.

Thanks, Dave. Any further questions? Okay. We will now consider the formal resolutions for the meeting. The resolutions for consideration today may only be voted on by shareholders either in person or virtually or by proxy or by proxy holders of the shareholder company representatives present. As noted earlier, there are 322,755,573 shares for which proxies have been received out of the total of 842,569,498 shares on issue. Sorry, a little bit more procedure about the hybrid meeting and the voting process. Just bear with me. Voting on all resolutions will be by poll as outlined earlier in the meeting. The poll is open to vote now to give you plenty of time. For those shareholders or proxies attending this meeting online through the Lumi platform, the resolutions and voting choices are displayed on your screens and to vote, you simply select your voting choice from the options shown on screen. You can change your vote at any time up until the poll is closed. To change your vote, simply select another voting choice. On a poll, each person voting in the meeting today and each shareholder who has casted vote by proxy has 1 vote for each share held. We will consider each resolution in turn and vote on that resolution after any discussion. There will be opportunities to ask questions on each resolution prior to the vote being called for. For those shareholders or proxies attending here today, to vote, you should tick the relevant box on your voting form in respect to the resolution being voted on. Please remember to sign your voting form once you have voted. If you did not bring your voting form with you, you should have been given a voting form at the registration desk on arrival. If you are a proxy holder and the shareholder has given directions as to voting on every resolution, you will not have been given voting papers. If you've been overlooked, please see one of the Computershare representatives quickly. Thank you. Company representatives have pens available if you require one to complete your forms. On completion of the voting, your forms will be collected. When all forms have been collected, that will be taken to be counted by Computershare and will be scrutinized by Deloitte. If you are both a shareholder and a proxy holder or a shareholder company representative, please complete a separate voting paper for yourself and each other shareholder you represent. All resolutions will be voted on in the form proposed in the Notice of Meeting given to shareholders. Each of the resolutions has taken as having been moved and no seconder is required. The resolutions will be binding on the Board and the company, if passed. The results of the poll will be announced via NZX as soon as they are available. Please note that the Board recommends that you vote in favor of each of the 3 resolutions. [Operator Instructions] I'm now going to hand over to Mike Pohio to chair the meeting during the voting of the next 2 resolutions. Mike?

Resolution 1. Resolution 1 proposes that Jeff Morrison be elected as a director. Pursuant to clause 24.6 of the company's constitution and NZX Main Board Listing Rule 3.3.11, Jeff retires by rotation. The Board confirms that Jeff is an independent director, and Jeff has confirmed that he is available for election. The Board supports Jeff's election and believes Argosy benefits from his extensive legal and property expertise and experience he brings to the company. Are there any questions on this resolution? I now put to vote the resolution that Jeff Morrison is elected as a Director of the company. Voting on this resolution will be by poll. For those shareholders and proxy holders physically in attendance here, please tick the relevant box on your voting form. For those shareholders and proxy holders attending virtually, please simply select your voting choice from the options shown on your screen. [Voting]

Thank you. We will now move to the next resolution. Resolution 2 proposes that Stuart McLauchlan be elected as a Director of the company. Pursuant to clause 24.6 of the company's constitution and NZX Main Board listing rule 3.3.11, Stuart retires by rotation. The Board confirms that Stuart is an independent director, and Stuart has confirmed that he is available for election. The Board also supports Stuart's election and believes the company will benefit greatly from his extensive financial expertise and the balance his experience brings to Argosy Board. Are there any questions on this resolution? I now put to vote the resolution that Stuart McLauchlan is elected as a Director of the company. Voting on this resolution will be by poll. Again, for those shareholders and proxy holders physically in attendance here, please tick the relevant box on your voting form. For those shareholders and proxy holders attending virtually, please simply select your voting choice from the options shown on your screen. [Voting]

Thank you. I'll hand back to Jeff, and we'll now move to the next resolution.

Thanks, Mike. Resolution 3. Resolution 3 seeks for the purposes of NZX listing rule 2.11.1 to increase the maximum aggregate amount of remuneration payable to the -- by the company to directors in their capacity as directors by $49,500 per annum from $778,500 per annum to $828,000 per annum with effect on from June 2021. As provided in the notice of meeting, of the increase, $30,500 is attributable to additional Board committee responsibility taken on during the year; notably, the establishment of a new ESG, that's an environmental social governance committee to focus on sustainability issues. Is there any discussion on this resolution? Voting on this resolution will be by poll. For those shareholders and proxy holders physically in attendance here, please tick the relevant box on your voting form. For those shareholders and proxy holders attending virtually, please simply select your voting choice from the options shown on your screen. [Voting]

Resolution 4. Resolution 4 seeks to authorize the Board to fix the auditor's fees and expenses. Is there any discussion on this resolution? Voting on this resolution will be by poll. For those shareholders and proxy holders physically in attendance here, please tick the relevant box on your voting form. For those shareholders and proxy holders attending virtually, please simply select your voting choice from the options shown on your screen. As this is the final resolution, the online voting system will close in approximately 30 seconds. Please ensure that you have cast the vote on all resolutions. [Voting]

That completes voting on all resolutions. Online voting will be closed at the end of the 30-second period. I will now ask for the voting papers to be collected and the boxes being circulated. Due to the number of votes to be counted, the votes collected at this meeting and online will be added to the proxies already received and the results will be compiled by the registrar and scrutinized by the auditor. The results, once available, will be published on the Argosy website and provided to the NZX. Now again, does anybody need some more time? I will now move on to the general business of the meeting and open the floor for questions or comments. Again, I ask that in addressing the chair with a question that you please state your name and advise whether you are shareholder, a proxy holder or a shareholder company representative. [Operator Instructions] The question will then be sent to the Board to answer. As I noted at the beginning of this meeting, we will try to get to as many questions as possible, but not all questions may be able to be answered during the meeting. In this case, questions will be followed up by e-mail after the meeting. I'd like to remind you that only shareholders, proxy holders or shareholder company representatives have a right to speak or ask questions. Do I have any general questions? Gentleman?

[ William Tavas ], shareholder. I just want to express my surprise, all the forms have been filled now and collected, that on point 2, Mr. McLauchlan wasn't asked to present to this audience, which is normally the case when elections or reelections occur.

I think you should acknowledge that has been our practice in the past, but more generally with people who are being affirmed by the shareholders assembled the first time. And Stuart is unfortunately detained in Australia. So he was not able to be here to make a presentation.

Okay. Maybe I got confused whether you can't read the signs from here. You explained it earlier on that this gentleman is not present, but usually, some kind of presentation is arranged. And I speak generally. I attend throughout the year quite a few of the meetings.

I did provide a brief bio for him. Sorry, if that wasn't sufficient for present purposes.

If I may, one other thing. It's quite confusing. I use hearing aid. It's picking up all the noise coming from the where people walk and talk, and it's a bit disturbing.

I agree with you, sir. I don't have hearing aids. I probably should, but I was noticing the same thing. We'll take that comment into account and see if we can manage it better next time. Thank you.

Yes, [ Graham Wick ], shareholder. I'm just curious whether the Board has at any time discussed being involved in any residential development. And I use that term broadly to include things such as student accommodation and things like that. Will hybrid developments as part of your activity? And if so, what was the product of those discussions?

I have to confess to not having to recall that we have discussed them but the conversations were quite short and I'll let Peter explain.

Thanks, Janice. Yes. Thanks for the comment. Built to rent is something that is a bit flavor of the month, and we see that kicking around on a few of the presentations recently. The reality is that the work we do on a regular basis looks at what's happening across the property market and evaluates the sector against the other. At this point, we don't find residential investment to be attractive.

It's not our skillset, [ Graham ]. Worth a question there I think. It is true that some of our sites may lend themselves to a residential component, but we haven't contemplated being the developer of that component as yet. Are there any other questions? That being the case, I will bring the meeting to close. That completes the formal business of the meeting. Thank you, everyone, for your attendance and participation this afternoon, braving the weather and other circumstances in order to be here. We appreciate that. I formally declare the meeting closed and invite you to join us for refreshments. Thank you very much.