PRECINCT PROPERTIES NEW ZEALAND LIMITED (AS ISSUER)

AN OFFER OF SUBORDINATED CONVERTIBLE NOTES

PRODUCT DISCLOSURE STATEMENT DATED 25 AUGUST 2017

This document gives you important information about this investment to help you decide whether you want to invest. There is other useful information about this offer on www.companiesoffice.govt.nz/disclose.

Precinct Properties New Zealand Limited has prepared this document in accordance with the Financial Markets Conduct Act 2013. You can also seek advice from a financial adviser to help you to make an investment decision.

Joint Lead Arrangers and Joint Lead Managers Joint Lead Managers

KEY INFORMATION SUMMARY

02

PRECINCT PROPERTIES NEW ZEALAND, PRODUCT DISCLOSURE STATEMENT

This page and front cover: Artist's impression of Commercial Bay at completion.

KEY INFORMATION SUMMARY

  1. KEY INFORMATION SUMMARY WHAT IS THIS?

    This is an offer (Offer) of subordinated convertible notes (Notes). The Notes are debt securities issued by Precinct Properties New Zealand Limited (Precinct). You give Precinct money, and in return Precinct promises to pay you interest and (subject to the following paragraph) convert the Notes (Conversion) at the end of the term into ordinary shares of Precinct (Shares) with a minimum value determined in accordance with the terms of the Notes of approximately $1.02 for every $1.00 invested (and a potentially higher amount depending on the Share price at the time of Conversion).

    Rather than Converting the Notes, Precinct may elect to instead pay you a cash amount equivalent to the value of those Shares as determined under the terms of the Notes (provided it meets the Payment Condition described below).

    If your Notes are Converted into Shares, you may receive a return if dividends are paid on Shares or if you subsequently sell those Shares for more than you paid for the Notes.

    If Precinct runs into financial trouble, you might lose some or all of the money you invested.

    ABOUT THE PRECINCT GROUP

    Precinct and the companies it owns make up the Precinct Group.

    The Precinct Group is New Zealand's only listed city centre real estate specialist, investing predominantly in premium and A-Grade city centre real estate. As at the date of this product disclosure statement (PDS), the Precinct Group owns and operates 15 New Zealand buildings located in the Auckland and Wellington CBDs.

    Precinct is listed on the NZX Main Board and, as at the date of this PDS, has a market capitalisation of approximately $1.6 billion.

    PURPOSE OF THIS OFFER

    The proceeds of this Offer (net of issue costs) are to be used to repay existing bank debt, providing Precinct with flexibility and

    additional debt capacity to fund its future development pipeline and any other opportunities as they may arise.

    KEY TERMS OF THE OFFER

    Issuer Precinct Properties New Zealand Limited.

    Description of the Notes Subordinated convertible notes. The Notes will Convert into ordinary shares of Precinct (subject to a Cash Election) as described further below.

    See section 5 of this PDS (Key features of the Notes) for more information.

    Offer amount Up to $150 million, as describedbelow.

    Structure of the Offer The Offer consistsof:

    • The Priority Offer of up to $25 million, which is open only to New Zealand Retail Shareholders.

    • The General Offer of up to $100 million (with the ability to accept oversubscriptions of up to

$25 million at Precinct's discretion). The General Offer is open to investors resident in New Zealand and certain overseas institutional investors.

If any amount of the Priority Offer is not taken up by the relevant Closing Date, Precinct may reallocate up to a corresponding amount to the General Offer at its absolute discretion.

Term 4years.

Conversion Date 27 September 2021.

03

KEY INFORMATION SUMMARY

  1. KEY INFORMATION SUMMARY(CONTINUED)

    Conversion On the Conversion Date, all outstanding Notes will be Converted into Shares, subject to a Cash Election as described below.

    The number of Shares into which each holding of Notes Converts will be determined by dividing their Principal Amount ($1.00 per Note) (together with any Unpaid Interest (including any interest thereon)) by the Conversion Price, which is the lesser of:

  2. the Conversion Price Cap of $1.40; and

  3. a 2% discount to the Market Price (calculated as per the statement below).

  4. The Market Price is determined based on the arithmetic average of the daily volume weighted average price of Precinct ordinary shares traded through the NZX Main Board in the 20 Business Days prior to the Conversion Announcement Date, as described in section 5 of this PDS (Key features of the Notes).

    The following table illustrates the number of Shares to be issued on Conversion and the value provided at a range of possible Share prices. The examples are for illustrative purposes only, are not forward looking statements and do not indicate, guarantee or forecast future Share prices.

    ILLUSTRATION OF THE VALUE OF SHARES / CASH RECEIVED

    Example Market Price

    Conversion Price

    Principal Amount invested in the Notes

    Number of Shares received

    Value of Shares received

    Cash amount to be paid if Cash Election selected

    $1.25

    $1.225

    $10,000

    8,163

    $10,203.75

    $10,203.75

    04

    $1.30

    $1.35

    $1.274

    $1.323

    $10,000

    $10,000

    7,849

    7,558

    $10,203.70

    $10,203.30

    $10,203.70

    $10,203.30

    $1.40

    $1.372

    $10,000

    7,288

    $10,203.20

    $10,203.20

    $1.45

    $1.400

    $10,000

    7,142

    $10,355.90

    $10,355.90

    $1.50

    $1.400

    $10,000

    7,142

    $10,713.00

    $10,713.00

    Explanatory notes and assumptions for the above table are set out on page 17.

    Cash Election Rather than Converting the Notes into Shares, Precinct may elect to instead pay a cash amount to Noteholders at the end of the term. In this case, Noteholders would be paid an amount equal to the Market Price (calculated as set out above) of all the Shares that would have otherwise been issued to them on Conversion of their Notes, so that they receive an equivalent value to those Shares (as determined under the terms of the Notes) and will similarly benefit from any appreciation of the Share price above the Conversion Price Cap of $1.40 prior to the Conversion Date.

    See section 5 of this PDS (Key features of the Notes) for further information.

    Precinct may only elect to pay the cash amount if it is not insolvent and no event of default in respect of borrowed money is continuing (and Precinct would not become insolvent, and no such event of default would occur, as a result of making such payment) (the Payment Condition).

    Interest Rate The Notes will pay a fixed rate ofinterest.

    The Interest Rate will be determined by Precinct in conjunction with the Joint Lead Arrangers following a bookbuild, and announced via NZX on or about the Rate Set Date.

    Interest payments Interest is scheduled to be paid quarterly in arrear in equalamounts.

    Interest payments may be suspended in certain circumstances as described below.

    PRECINCT PROPERTIES NEW ZEALAND, PRODUCT DISCLOSURE STATEMENT

Precinct Properties New Zealand Ltd. published this content on 25 August 2017 and is solely responsible for the information contained herein.
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Original documenthttps://www.precinct.co.nz/assets/Convertible_Note_PDS.pdf

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