eKourier Jan 2014

Kennards Kourier

January 2014

Orange Knight Takes Yellow King

2013 Ends With Strategic New Zealand Acquisition

W e have just capped off an incredible, busy and exciting year with the acquisition of Storage King “Downtown” Wellington. The Storage King located at 19 Hutt Road, Thorndon is just 2kms from the Wellington CBD and enjoys huge exposure to the main arterial motorway. It is without question, the best storage location in Wellington. The business has colourful history, it fell in to Receivership in 2012 and was quickly put up for sale by Tender in June that year. KSS submitted a strong bid at the time but the Receivers didn’t accept any offers and attempted to trade-on. Roll forward 18 months and Tenders were again called for, with a submission deadline of December 4th, 2013. On this occasion, despite some bumpy negotia- tions KSS achieved success and agreed terms with the Receivers. The Receivers had drastically adjusted downward their

spent too much developing and with too much borrowed money. It is understood the project owed the bank approximately $23 million. • Further, he got the unit mix badly wrong and the property has not been able to get past 67% occupancy. We have some drastic plans to fix this. • Incomplete building works and non-compliant earthquake rating also represent problems to address. (We love a challenge!) This is an exciting step for KSS and closes an incredibly busy year. We have added and opened six new locations (excluding Wellington, as it will join the KSS group on January 22nd). Including expansions we have grown by more than 37,000 square metres of space in 2013. Sam Kennard Managing Director

price expectations, which meant the property was in-play and attracted strong interest, even after Tender close-off. For KSS, the acquisition of this property spreads our footprint into this significant and important New Zealand market. The wonderful visibility and exposure is complimented by the high quality fitout, large retail area and easy access. The original developer managed to do these things well, and makes it a ‘good fit’ to the KSS Brand. It has 1,100 spaces over six levels and is trading at 67% occupancy. So, what went wrong for Storage King Downtown? Despite some positive attributes the original developer made some mistakes which caught up with him: • Firstly he over-paid, over-spent and over-borrowed – in the pursuit of growth and in an easy-lending the developer paid too much to acquire the property,

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Kennards Kourier January 2014

WHO’S WHO

Team Member Profiles

In this issue Orange Knight Takes Yellow King

1

Dax Heke Centre Manager - Wentworthville

Team Member Profiles

2

10 Questions with...

3

Career background: Retail Banking and Customer Service Any children? No, unless you consider pets as children, then I have two! Hobbies/interests: Photography, home design and property styling and my two dogs. Do you play any sport or have any special talents? I play Tennis and Netball Favourite Book: Not really a reader. Favourite movie: Any horror movie

Preparing Our Infrastructure...

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Customer Feedback

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Momentum12 - One Year On

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So You Want to be a Manager

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Back Stage with National Accounts

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Customer Feedback

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NZ Sites Achieving Record Results

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Aiming Our Sights... 9 A Kennards Christmas 10/11/12 Web Word 12 The Evolving World of Finance 13 Customer Feedback 13 Australias First Self Storage IPO 14 Spotlight On... 15 Macquarie Park Taking Shape 16 Team Response Gives Training a Rap 17 Loads of Bubbles at Rozelle 18 KSS Support the Bushfire Relief 18 Nev’s Notes 19 Kennards Community 20 Next issue Deadline: March 21st, 2014 Please send contributions to the editor Editor: Sharon Dux Email: sharon@kss.com.au Distribution: April 17, 2014 Upcoming events 6/2 - Waitangi Day (NZ) Closed 10/3 - Adelaide Cup (SA) PH hours 10/3 - Canberra Day (ACT) PH hours 10/3 - Labour Day (VIC) PH hours 24-3/4 - Skillbuilder (NSW) 8-9/4 - Skillbuilder (VIC) 18/4 - Good Friday - KSS Closed 19/4 - Easter Saturday - Normal Trading hrs 20/4 - Easter Sunday - Normal Sunday hrs 21/4 - Easter Monday (NZ) Closed 21/4 - Easter Monday (NSW, VIC, QLD, ACT, SA) PH hours

Favourite restaurant/food: Chocolate, Ice Cream and Thai food Where did you grow up? I grew up in New Zealand, the most beautiful country in the world! Any pets? Two Maltese Puppies. Favourite holiday destinations: Europe, can’t wait to go back there. Japan is simply gorgeous.

Craig Kemp Assistant Manager - Panorama

Career background: Hospitality, Event Management Marital status: Single Any children? Chloe - Loves Music, Basketball and Sports Ed Hobbies/interests: Cooking, Swimming, Hiking, Fishing, Music, Markets, Beer! I also enjoy coordinating and managing major events and projects. Do you play any sport or have any special talents? Walking and cooking Favourite Book: None Favourite movie: Shawshank Redemption, The Green Mile. Favourite restaurant/ food: Malay or Indian, Adelaide has great restaurants.

Where did you grow up? Adelaide, near the Clare Valley. Any pets? My Blue Heeler - Pete. Favourite holiday destinations: USA - San Francisco, Chicago, New York.

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WHO’S WHO

10 Questions... With Gorden Guthrie - Team Support Manager

or practical, is something I would like to get involved in. At the very least, I can capture nature as it should be on camera. I am planning a trip with friends to the game parks in Africa next year. A new camera is definitely on the agenda for that. Further down the track, some land by the coast, with enough space for two horses, would bring great enjoyment. As for achievements, my most relevant at KSS is keeping our centres staffed and making sure we have coverage, Christmas and the New Year sees a lot of the Team taking holidays. Why is recording and capturing Customer Enquiries so important at Kennards? Enquiries are the means by which we track our sales success because they allow us to generate a conversion rate from the number of move-ins that result. Measuring our conversion rate then gives us the opportunity to compete against ourselves as we track our sales improve- ment in getting people to move in to our centre(s). Do you feel training is a crucial element to making a successful Kennards Team Member? Training in my view is largely what we make of it. For me, training helps keep me on track with our procedures, systems and developments - sometimes I think I know the way things are done, because I’m used to it. Then training highlights that somewhere I have gone off track and helps me get back on. We should also use it, I believe, to raise and address issues and areas that we would find it helpful to know more about, even if they are not strictly on the agenda. I Recently attended PEP, which I found enormously rewarding. It brought the whole Blue-Red-Green Circumplex graphically and meaningfully to life for me. And finally, to sum up KSS in one word would be? TEAMWORK. It gives real depth and satisfaction to so much of what we do together.

centre challenges. I also inherited the TSM Co-ordinating role which is a stimulating challenge in mental gymnas- tics, and a task I find satisfying by supporting and being of more direct benefit to my Teammates. Most of all, the constant change of scene is a real buzz for me. Tell us about your family, hobbies and interests? Four children, two who came with the marital package (hence the early grandchildren), and then two later with whom I had a more direct involvement. There is a 13 year gap between numbers two and three, which means the older siblings are really good role models and mentors for their younger brothers. They all relate to each other well, which has been a very gratifying experience for me. I have a few interests which are fairly varied and probably a bit male-oriented. Sport; mainly cricket, all four codes of football, horse racing and even occasionally a bit of golf. Also fishing, camping/outdoors/walking, going to remote areas, music; mainly opera, classical, jazz and classic pop; steam locomotives and their restoration and model railways. Preferred exercise is bike riding, swimming and flexibility/core exercises (to help me get more out of life). Tell us about your background and personal origin? Like many at KSS, I was not born in this country. I was born in Inverness, capital of the Highlands in Scotland. I occasion- ally indulge in Scottish events/culture with friends. I used to do a bit of Scottish dancing too, which is really great fun. It’s something I intend to get back into next year, as a Scottish Ball is a sensational experience. Do you have any goals in life that you have yet to achieve and can you tell us of any that have been great achievements? The environment and natural outdoor regions, with all their flora and fauna, attract me and draw me to them. An environmentally-based project, research

Tell us how long you have been with Kennards? I recently celebrated my anniversary of six years with Kennards. Three and a half years at a centre and then the last two and a half years as a TSM. I would never have believed at the start how involved I would get with the company. What role do you have with Kennards Self Storage and have you always done this? My role was as Assistant Manager at Huntingdale in the South-East of Melbourne until about two and a half years ago when I switched to become a TSM. I really needed a change of scene and role, and the TSM position definitely provided that. What would be the best thing about being a TSM for Victoria? It’s brought me into contact with a broader spectrum of our KSS community whom I had previously had little opportu- nity to interact with. I enjoy an enhanced sense of teamwork with my Teammates getting involved with their individual 30th November was St Andrew's Day. St Andrew is the Patron Saint of Scotland. We went with friends to the St Andrew's Day Dinner in Melbourne.

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Preparing Our Infrastructure for the Future FEATURES

Customer Feedback

“Dear Team, Congratulations on providing stellar customer service. I phoned today and Dianne’s assistance in your Customer Care Centre with my enquiry was first class. She also went the extra mile and followed through promptly as promised. Even after I candidly said ‘I called you guys last’; meaning I suspected I could not get a better deal elsewhere! We had a laugh at that, and I was right. As the customer always is hey? Thank you for leaving such an impres- sion on me, in this stressful time of moving and having to deal with many companies customer service for various associ- ated things during a move, Dianne was outstanding to the point it compelled me to recognise it by writing this, which I have not done before.” “Kylie from Browns Plains, kept in touch with me from the very first phone call and after I moved into store. I felt welcomed and not pressured. Kylie is professional, informative, interactive, proactive and in general a very warm friendly person. The storage unit was exactly as described and perfect for my requirements. Very tidy neat establishment. Would recommend to family and friends.” “Robert and Owen at the Klemzig storage centre were friendly and extremely helpful. I really felt reassured knowing that they had covered all bases, including what facilities and equipment is available, security etc. The 40th Birthday special was also a bonus! The cleanliness of the centre is impeccable.” “Absolutely fantastic storage. The people who run the Wanganui storage are so nice, friendly, helpful and efficient. Lovely new storage sheds in a great location. We used the shed as we sold our house so stored our gear while we were building a new one. Thank you.”

K SS has grown exponentially in the last ten years, today we majority own and operate 79 Centres (and counting) compared with 24 in 2003. Our growth is a testament to our people, our brand, vision and strategy, times are good. Growth however has many challenges, particularly when it has been organic for a sustained period of time. From a technology point of view, we need to be thinking five and ten years ahead. Coming back to ‘organic’, this describes precisely the technology infrastructure in place at KSS today and the dilemma of “will it support tomorrow”. Technology infrastructure is many things, most importantly it has become the foundation our systems rely on. To appreciate its significance think about it like you would if you were building a 20 storey building. If you don’t get the concrete and steel right you are in big trouble. With that in mind, rebuilding from the ground up is an enormous task. Ideally you already have the infrastructure in place that considers expansion, risk, scalability, compliance, disaster recovery and so on in the originating design all those years ago. Building on what you have in place ‘today’ isn’t really the best option. You can’t add another storey if the concrete slab and steel won’t support it.

Like anything else in business, ‘change’ presents opportunity, in the case of ‘infrastructure’ that window presented itself through the planned relocation of THQ to Macquarie Park in 2014. Now, it would have been far simpler to just relocate todays infrastructure however, that wouldn’t make any sense from a strategic long term point of view. Behind the scenes in 2013 a good chunk of time was invested heavily planning and designing the new infrastructure our systems will run on by forming partner- ships with external providers that will manage and build our infrastructure. Together, you can expect better perfor- mance all round and the benefit of having the KSS IT Team focus more on ‘business value add’ leaving the day to day ‘upkeep’ of infrastructure to external partners. New infrastructure will be delivered in stages in 2014, and mostly implemented in the background. Completion is expected mid-2014, at which point our position will be reviewed ongoing, with new elements being switched on progressively. Jeff Xanthos Chief Information Officer

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FEATURES

Momentum 2012 - One Year On...

O ur strategic directions confer- ence “Momentum 12” was held just over 12 months ago. Since that time, our Champions have been working on the evolution and implementation of our four- pillared strategy to:

value between different unit types giving customers more economical alternatives when needed. Skill builder emphasised building sales skills with key focus on recording enquiries, understanding “Their” story, effective follow ups and looking at your centre as a “business”. The energy that all Teams have devoted to customer service and the increased learning through the walk in Mystery Shopper results, care ratings in phone reviews, emphasis on better listening and more widespread use of the PTC card. Importantly the ever increasing number of specific, positive, even glowing comments flooding in from web feedback. It’s inspiring to see through these comments the Surprise and Delight in particular hasn’t been anything too technical but simply the exceptional care that you have shown. The work still to do includes finalising the “Customer Life Cycle”. This will highlight where all our current “customer touch points” are, which ones we do well and which ones provide opportunities for us. With that we can build upon the best of your habits and processes to make changes for roll out across the board. Grow and Strengthen Our Brand Profile Over the last year we have focussed on building and strengthening our Brand through Radio Advertising, Banners, Social Media, the 40th Birthday Promotion, our Website and SEO. We are also working on building awareness around our niche markets, with the focus being on Gun Storage. Continuously Innovate To date “continues innovation” has largely been technology focused. Our efforts have been both focused on rapid “quick wins” via updates to our website bringing improvements for Teams, customers and marketing initiatives. Our mobile site is not far off and there are plans for rental and customer portal functionality in 2014. Longer term has been largely strategic planning, focusing on infrastructure that will deliver better services/systems by being able to support newer technologies.

Additionally we are looking at ways that will see our time invested more so on business value rather than keeping things running that can be otherwise externalised. In between we are consciously working hard to improve turnaround times on updates though more frequent StorMan and KOSMO updates rather than major releases per annum. Another focus is around the idea of capturing ideas and how to better embrace them, this continues to be a work in progress evaluating different options available to KSS. FREEDOM In addition to our four-pillared strategy, we crystallised our company values under the acronym ‘FREEDOM’. The Freedom values have penetrated the fabric of our business; our memorable Freedom video is now shown during New Employee Training and each value is explained in detail to ensure every new Team member embeds ours values in their DNA. Development Action Plans) for discus- sion, to encourage reflection of how are we living the values in our daily activities. Our screen saver and mouse pads also constantly remind us of the Freedom Values. We will continue to source and implement ideas to further embed the values into every part of our business. Any ideas you may have would be welcomed GOAL Our goal for 2013 was to achieve 40K units rented by June 30 and we achieved and celebrated hitting our target well in advance. It is great to note, that momentum hasn’t stopped, as we are continuing to achieve positive occupancy growth each month. Our 40 days free storage offer in October contributed enormously to our growing number of rented units, with us achieving a record 1,100 new units during October. Darren Marshall General Manager This year we added our Freedom values to the MDAP (Management

1. Find and Retain the Best People

2. Exceptional Customer Experience

3. Grow and Strengthen Our brand Profile

4. Continuously Innovate

Each month our four champions get together and discuss the opportunities, initiatives and development of their partic- ular strategic area. You can read below from our champions, on what’s been happening in their area. Find and Retain the Best People Our main focus at the moment is with our recruitment practices and software. We started by researching which companies excel in this area and Lionco stood out. Lionco is known as a sought after place to work within their industry. Like KSS they focus on building a constructive culture, with a high level of engagement. They have a fantastic interactive online recruitment page, listing all vacancies and explaining why you should join them. Their HR Manager Chris Morris took the time to meet with us to walk through everything they do, from their online presence to their recruitment process. We are also starting to move towards a more robust online recruitment portal in the near future. In November we met with Expr3ss, to find out what their recruit- ment software has to offer. It’s exciting to see there are so many options within the market, which can add value, save time and help us recruit the best of the best! Exceptional Customer Experience Since Momentum12 the growth and changes have continued to tick along. Each in its own way has built upon and improved the “Store With People Who Care” experience.

Dynamic pricing has better defined the

Kennards Kourier January 2014

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FEATURES

So You Want to be a Manager?

company success.

skill to have to fuel personal growth.

Previous manage- ment skills are a great advantage and form an important part of our consideration process when selecting the right applicant. A sales focused Team Member! We aren’t looking for a Property Manager or Customer Service Manager. We

Tips for writing your Expression of Interest for a Managers Role

Do’s Be honest about your personal strengths and opportunities. We need to know what you will bring to the role and what assistance and development you need from us. Be specific and focus on areas you can influence:

A re you ready to take the next step to become a Storage Centre Manager? This is a question many Team Members ask themselves at some point in their journey with Kennards. I am often asked “what it takes” to become a Centre Manager. That is a really good question and the answer is worth sharing. Perhaps this will inspire more Assistant Managers to take the first steps towards leadership. One of the most rewarding parts of the Operations role is the opportunity to mentor Team Members wanting to take the next step in their career. Seeing people achieve goals that they have worked hard for is an awe-inspiring leadership experience. Unfortunately, not everyone makes it beyond deciding they “want” to be a Manager. Those that are successful show a desire to learn, grow and develop; to do whatever it takes to achieve their goal. We call it “Grit”! What are we looking for in a potential Manager? Attitude is the most important ingredient to becoming a Manager. If given the choice between an applicant with the necessary hard skills, that has a poor attitude or a Team Member with a great attitude, and no hard skills; we will choose a great attitude every time! We can change hard skills through training, but we can’t change attitude. Committed and Engaged Team Members are enthusiastic about their work and organisation. They make an effort to contribute to both Team and

need someone who isn’t afraid to fight to close each and every sale. A person, who won’t accept the status quo, isn’t afraid to ask for the business and knows how and why they lost or gained each sale. Good communication skills are perhaps the most invaluable skills one can have. When appointing a Manager, we are looking for a person who can communicate clearly, constructively and with confidence. This skill will help them create positive relationships with their customers and Teammates. “Grit” is the mental strength, tenacity, optimism and unfailing ability to achieve results, without focusing on setbacks. How to prepare yourself for a Managers Role - Make sure you have a realistic understanding of the responsibilities and the challenges that come with the role. - Start with the basics. Be a sales superstar and focus on your enquiry handling techniques, follow ups and Mystery Shopper results. - Spend time with our HUB Managers; get an insight into effectively running a storage centre from some of our highest achievers. - Have a thirst for knowledge; be open to learning and developing yourself. - Be open to constructive feedback. Having the ability to receive feedback, without taking it personally, is a highly valuable - Complete our Step up to Manager Training Programme

- Enquiry handling - Mystery Shopper results - Current Follow up Practices - Centre Presentation - Dynamic Pricing - Current Rent Increase Practices - Scoty Results - KPI Opportunities

Don’ts - Don’t focus on areas you can’t influence. - Remember you don’t have a million dollar budget, so changing our whole website, paying a plane to fly over the local area with a KSS sign attached or a national advertising campaign in every magazine and newspaper isn’t realistic! - Don’t be vague about figures, results or goals; i.e. “improve occupancy”…. Now tell us, how will you plan to do it? - Don’t rush your expression of interest. Take your time, write it, leave it for a day, read it again, change it and then send it! Applying is the first step. If you are fortunate enough to be appointed into a Manager’s position, the hard work is about to begin. Don’t forget the goals you set and don’t be afraid to use the people around you for support and guidance. If you didn’t get the job this time, it’s important you don’t take it personally. Just because it isn’t your time now, it doesn’t mean you won’t get there next time or the time after that. Be patient! Lynda Walsh NSW Operations Manager

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FEATURES

Backstage with National Accounts

O ne of the reasons I love this role is meeting so many new people from different industries and fields of business. Through our experience we are refining and building better relationships with our corporate customers which goes beyond a sales pitch. For most of the larger customers moving to self storage has been far more than just filling out an agreement. In a lot of cases its requires significant project manage- ment and in many cases it’s a time of large cultural change. For those of us that understand the offer and value we can provide it’s fascinating to see the process these organisations go through. When I started I never considered it was so much more than the orange roller door, pin code and padlock! In a typical example below there are a fascinating number of considerations that we work through with customers. - At the proposal stage, the future custom- er’s considerations include: - Logistics - Measurable change (for example when moving from a central warehouse model) - In many cases Senior or Board approval is required - Legal checking and approval - One or two have understood the value but the change was so significant the project had to be budgeted for in the following year. It included: - The ending of major property leases on warehouses - The sale or disposal of assets. - Purchasing new types of equipment - Negotiating new supply arrange- ments and delivery contracts This is all before we are considering any detail about locations or unit types. Imagine the economies of scale we can provide for a customer closing down a warehouse that costs them in the order of $6M per annum and includes forklifts, logistics staff and other overheads. - Once signing up we move to the transi- tion stage, this includes assisting with:

- Finding the right spaces and locations - Training their staff

Customer Feedback “I want to say thank you for the very pleasant experience of hiring a storage unit at Wollongong. I particularly want to thank Matt who went above and beyond to help us. He was friendly, helpful, always had the place looking ship-shape and was able to suggest things that overall were so helpful. Thank you again and thank you too Matt.” “Fantastic storage spaces at Kennards in Wanganui. Excellent location, well organised, dry, secure, safe and great people to deal with. Thanks.“ “Very good, very professional, very easy to deal with. Initial enquiry on line one night and I received a follow up call the following day. Sadly great customer service can be rare these days so congrats to you! I didn’t know your company existed until it came time to store my furniture. Thank you Google! The whole experience from organising through to moving was seamless. Moving is very stressful and packing up my entire house not particularly enjoyable, however your team made the whole experience that much easier. I also know that my contents will be safe and dry while I’m away. This is important to me. Thank you Three Kings!” “AJ and Darryl were helpful and profes- sional. You sell good boxes and have a buy-back scheme; you provide trolleys; AJ and Darryl at Fyshwick know the business and know the problems one encounters when moving personal belongings. A friend had stored with Kennards a couple of years ago and recommended the business. I am very happy he did so. I found the Website answered all my questions and when I telephoned and spoke to AJ I felt confident there was no need to contact another storage firm.” “ John Young at Newcastle was the most courteous and friendly person I have ever come across, and these days it is a rare quality. Please credit Mr Young with this due praise. He always did a great job, and nothing was ever a problem. Thank you John. We appreciated your courteous and friendly manner.”

- Covering off on a variety of resource and WH&S issues (shelving, trolleys, unit location etc) - It often involves a road show of sessions together with their HR Team. This is an important point of the process for KSS. There can be significant emotion involved if you were one of their employees. Your office and base of 10 years may have been closed and you’ve seen colleagues leave the company as the efficiencies are made. “ When I started I never considered it was so much more than the orange roller door, pin code and padlock! ” That’s why in the training and road show it can be an exercise in showing the value and simplicity of what we can do for them. Self storage by nature means that we make it easy for the customer to take care of many elements themselves. For some they are transitioning from someone else doing this for them and it can sometimes be hard for them to see the value in the beginning. Depending on the size of the transi- tion this could take months meaning that while some units will be occupied immediately others selected may not be occupied for some months. With 12,500 square metres rented in National Accounts now we are extremely proud of the value we’ve provided and what we’ve learnt from working through these experiences with our customers. More and more it’s about the value, not the price. Fiona Harding Business Development Manager

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FEATURES New Zealand Sites Achieving Some Record Numbers

site and continue to maximise opportuni- ties with unit conversions and Enterprise Spaces. Jayne joined us in May 2013 and her sales strength has seen Onekawa grow steadily almost every month since she started to record highest rented square metres as well. It is pleasing to see the Enterprise Space concept provides much of the growth in occupancy. When I think about all the Team Members mentioned above, the common theme across all of them is customer service and pride in their centre. All of these centres ooze positivity and it is very noticeable. Quite often I see the Teams talking to customers like friends. The personal touch and genuine approach is a great example of our company culture FREEDOM.

S ome NZ sites have achieved record results in occupancy at the end of 2013 that deserve mention and provide a platform for better income growth this year. Mt Eden has now achieved high performance status, closing above 86% occupancy in November. It has seen commendable commer- cial customer growth with larger size ground units becoming occupied since we converted the ground floor and also a better year with the Wine Storage market becoming more mature. “ When I think about all the Team Members mentioned above, the common theme across all of them is customer service and pride in their centre. ” Looking into 2014, opportunities exist to maximise income growth with the strong occupancy and covert the basement car park into more storage units.

Three Kings being the largest centre in the NZ portfolio has been operating below the line for a considerable time, until the Team of Shane Pearce and Leon Sathiasothy came together with the aim of getting the centre to high performance levels. The last six months have seen steady growth and at 78% occupancy, their target to get to high performance by the End of the Financial Year is on track. Tauranga and Onekawa deserve some mention as well. Duncan and Bev at Tauranga have had their highest rented square metres since we acquired this

I sense that all NZ sites will perform even better this year.

P.S Did you know the All Blacks became the first international side in the profes- sional era to go through a calendar year unbeaten! Andrew Kirkham NZ Operations Manager

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FEATURES

Aiming Our Sights with Future Gun Storage Expansion and Improvements

Regulations govern that walls must be solid enough to be a substantial physical barrier to entry points and that door locks fitted must reduce the possibility of a door being sprung from the jamb. Our new bullet proof custom entrance doors have a 40mm x 40mm steel tube frame with diagonal cross members, and the locking mechanism is a Lockwood Mortis Lock machined and housed into a solid block of steel within the door frame. Confusing! Hopefully, the same goes for any illegal activity that may occur on-site. Our door latches are now installed with a new extra strength paddle series latch housed (and concealed) within the frame which can hold back a force of 1,000kg. To avoid any tampering or security issues, MUX boxes are now located internally within the gun storage room, lights are operated by sensors to any specific time limit, internal and external entrance doors being monitored with Bosch camera’s, and any power sockets and cabling are housed internally also. With these added improvements in gun storage structure and security, this will now see any future gun storage expansions, and in particular with a proposed new 60 Gun Cabinet Facility at our Panorama Centre, ‘Aiming Our Sights’ on being innovative and compliant for the gun self storage industry. Wayne Birch VIC Operations Manager Charity Feedback “Elegant Wedding and Events would like to thank Linda, Steve and Staff at Kennards Self Storage Campbelltown for donating two storage units for us to collect donations for all the people that have lost their homes in the recent Sydney fires.”

R ecent gun crimes in Victoria over the past 12 months has necessitated Kennards to change our gun room designs and implement new security features in gun storage facilities at Huntingdale and Maribyrnong Centre’s. We continue to be innovative with the gun storage product we supply and with the added improvements in security features, changes implemented have had a desired effect on reducing the risk of theft and further enhancing our customers gun storage experience. Kennards now offers fully legal and compliant gun storage in Australia. Local Divisional Firearm officers in each Australian State are aware and more importantly supportive of our facilities covered under the Australian Firearms Act 1996.

Our Gun Cabinets are heavy gauged steel firearm lockers made specifically to comply with Government regula- tions. Additionally, there are specific Government storage requirements for the safekeeping of firearms and cartridge ammunition, as set out in the Firearms Act, and with the new improvements to our gun facilities ensures Kennards are fully compliant to all regulations. Improvements have seen a greater emphasis on access security with the installation of new entrance door designs. Also, these improvements have seen the construction of a cement block wall into which a custom built 12mm x 300mm PFC steel frame fixed to concrete floors with 30mm dyna bolts is installed. A 6mm checker plate base is then secured onto the floor within the frame itself.

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FEATURES

A Kennards Christmas

NEWCASTLE

SYDNEY/ACT

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FEATURES

SOUTH AUSTRALIA

QUEENSLAND

NEW ZEALAND

VICTORIA

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FEATURES

A Kennards Christmas

well for Auckland so we’re now building it into a template for other regions. Once built we’ll use it for other places such as “Sydney CBD”, “Melbourne CBD” etc.

Our Social footprint is also expanding. Keep an eye out for your own centres YouTube video and subscribe to our channel.

Likewise we’ve built a Google+ account and merged our Google Places account under the same umbrella. The next step is to release the new web/email footers that will allow customers to click on their preferred social platform (Google+, Twitter, Facebook, You Tube etc). We’ll then be feeding content straight to each of them.

I t’s been a busy few months on the Web bedding down the new contractors and making even more changes. Doing something on the website every day or week is the new normal! Organic rankings for New Zealand are improving. Part of this included creating and testing a new type of page for the site called a “Regional Landing page”. It fits into the “locations” section of the website and covers a region. In this case “Auckland” and links straight to the applicable centres (Mt Eden and Three Kings). It’s a more natural way that customers and Google may search for centres when they don’t know specifically where we are. It’s worked out

It’s interesting to see the changes over this past year just in reservations and unique visits:

Date

Sep-12 Oct-13 32000 39900 1206 3302

Unique Visitors

Customers “Market Source Internet”

Online Quotes/Reservations

179 1762 Darryl Hodgson NSW Operations Manager

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FEATURES

The Evolving World of Finance

Customer Feedback “ I was very impressed with everything at Kennards Springvale. Good choice of clean, safe and secure units. All the staff were very helpful, I had no need to shop around. Everything you need for storage and removal is right there. It’s not often you find a firm that gets everything right! You have, well done and thank you so much.” “ A wonderful service and your staff are professional and friendly. I enjoy my contact with your centre and recommend your service. Leanne and Gary at Gladesville are very good to us all.” “I would like to comment on the excellent service I received from Shane and Leon at Three King. At a time of stress and uncertainty I felt relieved and confident that my property was secure and well looked after. I can’t tell you how much this put my mind at ease and enabled me to get on with other things in my life that needed to be sorted.” “I could not speak more highly of your business. Carl at Frenchs Forest was great, professional, brilliant to deal with. The site is brilliant; exceptionally clean, love the security, access great, using the trailer, trolleys, even just having a bathroom and drink machine. Pricing was also very good.” “Call centre contact Christina was terrific in proving information and helping with bookings, she displayed high levels of positive customer support. At the Parramatta site, both Debbie and Matthew were top notch in their professionalism and customer oriented actions. These individuals are great ambassadors for Kennard’s and made my decision easy to choose Kennard’s. I am considering further storage requirements in the near term, also.” “I was extremely happy with the service given to me when I moved in at Preston. The lady who served me was very helpful and the entire move in experience was smooth and quick. I will definitely refer you to others. I honestly felt this was a five star experience. Thank you.”

C ontrary to popular believe, the finance world is an ever evolving beast. The Accountant of today is not the person sitting in the corner with four pens in their pocket and bashing out numbers on an abacus! Over the last few years there have been significant changes within the finance world which have changed how finance members need to operate. Some of these include:

ants who add value through interpretation, analysis and presentation of information, will become more valuable as the economy evolves. The developments in eCommerce pose a huge challenge to traditional business systems and the Accountants that support them. The internet will play an increas- ingly important role in the dissemination of business and financial information and an expectation of up-to-date information and timely reporting. The challenges faced by finance would be faced by all areas of the business. How are the Finance Team looking to meet these challenges – • Look to use systems to improve processes, this in turn removes errors and can signifi- cantly speed up processes. • Streamline processes and deliver processes that are simpler for all users. • Listen to business needs and use these learnings to deliver more Value Add to the business. We look forward to your thoughts and feedback as we continue to change and develop in the ever changing finance environment and look to deliver Value Add to all of our customers out there which is every Kennards Team Member. Anthony Rous Chief Financial Officer

• The global economy

• Information technology

• The empowered consumer

• The demand for greater accountability from all users

• Environmental and sustainability issues

• New sources of competition

• Taxation changes and increased complexity

• Legislative changes at a local, state national and international level

It is unreasonable to expect Accountants to be exempt from this world-wide phenom- enon. The concept of a one-size-fits-all product is rapidly becoming obsolete. Accountants need to focus on customers’ needs and provide services that each customer considers valuable for its own use, both internal and external. Account-

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Kennards Kourier January 2014

Australias First Self Storage IPO FEATURES

investors take business risk in the property. Something more like a going concern hotel investment. The APN fund initially antici- pated a 5 year exit. The trust grew after 2003 to raise additional funds to fuel further investment. In 2008, APN were unable to engineer an exit for investors in the National Storage Property Trust and arranged Gresham Partners, and later also imposed a brief distri- bution freeze on their retail investors. The re-unification of the business and property in the National Storage IPO sees the arrangement come full a refinance, including a mezzanine loan from

adopt a Op Co / Prop Co stapled structure separating the manager from the property, and setting up synthetic leases between the internal entities. The prospectus will no doubt reveal this. In Australia, the other major brand operators and investors include Storage King as Franchisor and Asset Manager, and Kennards Self Storage. At Kennards, we own and operate our assets as going concern in the classical fashion of global leaders. We own / operate 79 storage centres in Australia and New Zealand. Kennards is the largest owner of self storage assets in the region and remains a private family owned and operated business. In addition, Abacus Property Group ranks as a major investor in self storage with 44 assets spanning Australia and New Zealand operated by Storage King. In late November, rumour emerged that Abacus were also looking to list their $300 million storage portfolio in a stand-alone company. The emergence of a Self Storage REIT in Australia was inevitable and slightly overdue. The small Australian market has lead to concentration of ownership and slow scale build-up, and interrupted by the GFC which has slowed the journey. The quantity of high quality institutional grade self storage assets in the market is modest further slowing growth and leading to over enthusiastic bidding for second tier assets. The big question, how will the self storage REIT perform? Like any property investment, the performance will depend heavily on the underlying asset quality and in addition for self storage, manage- ment capability will have a significant influence. Understanding the detail in this regard will provide some insights. The National Storage Prospectus released in late November unfortunately provided scant detail on the Assets and Valuations. The arrival of the first self storage IPO will provide some benefits to the industry, illuminating a wider audience about the self storage asset class, it’s positive attributes and it’s risks. We will watch this space with interest. Sam Kennard Managing Director

D ecades after self storage listed on Wall Street in the USA and more than 10 years after the UK’s first self storage listing, Australia looks set to see its first self storage IPO. National Storage look ready to do a deal with their property owner fund manager (APN Property Group) and combine the business and property assets in a listing of a going concern self storage – as reported in the Australian Financial Review Nov 15th, 2013: “National Storage Unlocks the Door to $280M Float”. APN and National Storage began their relationship in 2003 when APN created a retail fund known as the APN National Storage Property Trust. The trust owned the properties while National Storage entered a 15 year triple net lease to operate from them. This sale-and-leaseback structure contrasts starkly with the more classical storage ownership structures of the major operators around the world including KSS, who all operate and own the assets in a single entity. This reflects the unique property class that self storage operates as, where

circle and embrace the globally accepted investment structure of REIT’s and major operators. The IPO will now give the retail investors the ability to exit and crystallise their holding some 10 years after inception. Self storage rentals to storers are an active type of business, requiring daily hands on involvement. To navigate the ASX passive income tests for a REIT, the National Storage IPO will likely need to Kennards Self Storage. At Kennards, we own and operate our assets as going concern in the classical fashion of global leaders.” “In Australia, the other major brand operators and investors include Storage King as Franchisor and Asset Manager, and

Kennards Kourier January 2014

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FEATURES

Spotlight On Flemington

with a 2.25UP in March 2011 gradually increased space to now occupy a 24.0GR with plans to move to 48.0GR as soon as we remove a wall. The company is a ‘hands on’ educational activity provider. When they began they were providing activities (incursions) to 100’s of schools across Victoria. Now, in 2013 they are providing Incursions to 1000’s of schools Australia wide. Also now store with KSS in NSW and Qld.

History Flemington KSS is very close to the centre of Melbourne, being only 4.5km from the CBD. Flemington is one of Melbourne’s oldest and most traditional regions, with many heritage buildings and old traditional industries such as wool and grain handling and processing, along with manufacturing industries. The site as a storage facility was originally a Millers centre, coming into the Kennards fold with the Acquisition of Millers in 2004. Although not much is known of its history prior to Millers, being of typical warehouse/factory construc- tion, it is very likely that the main building had its origins in one of those traditional industries. Flemington is situated right on the major access routes to and around the city and the greater Melbourne infrastruc- ture, such as Citilink, Melbourne Airport, Racecourse Road [Fleming- ton’s address], and Flemington Road, and provides links to and from all these areas. As such it is relatively easy to get to. The local area in Flemington is now culturally very diverse in population and becoming more so. This diversity in population is also reflected amongst Flemington’s valued customer base, in addition to those from the historically more traditional population and the many commercial customers.

feature on Racecouse Road, passed on the way to the famous Flemington Racecourse nearby, one of the biggest icons of this city. Site Features Our new building extension and storage space has our facility at 778 storage spaces with 6,934 square metres available for rent. We are currently trading at 478 rented spaces and 4,185 square metres occupied which gives us an occupancy of 61%. The adjoining building which had previously been tenanted has been redeveloped, giving our customers greater choice. Incorporated in the redevelopment is a new office for Wayne (Ops Manager), new training room and kitchen. The unit mix in the ‘new’ building consists of six Enterprise Driveway Spaces, 33 Driveway Spaces, five Ground Floor and 145 Upper Level. The Enterprise Spaces were snapped up very quickly, half by existing customers upsizing. The Driveway Spaces are proving very popular and are renting up well, mostly by commercial customers. We have a diverse mix of customers both individual and commercial. It is very interesting and exciting to watch some businesses grow from little more than an idea to a thriving operation.

2. Ninedots IT Pty Ltd began storing with us in November 2011 with a 9.6GR and now have a 39.0DR with plans in place to remove the wall and expand into the adjoining 24DR space making a total of 63 square metres. This company provides IT programmes and support for the hotel industry. The Team Azam and Phyll are very proud of their centre and maintain it to a very high standard. We get many comments about the cleanliness of the centre and the great location. Potential customers mention that the slightly higher rent is warranted given our excellent standard! Team Flemington

Two of these success stories are: 1. Supreme Incursions who began

Manager, Phyllis Jallais and Assistant Manager, Azam Muhammad

KSS Flemington is now a highly visible

Kennards Kourier January 2014

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PROPERTY

Macquarie Park Taking Shape

Macquarie Park - Progressing well Work is progressing well with the fitout 75% complete. THQ interior design is now complete and will kick off during January after the roof is completed. Mt Eden - Basement fitout to go ahead Steady rent up has activated the fitout of their basement, this will be the final stage of developing this property. Warrawong - DA lodged DA is now lodged and we will look at starting construction. Chatswood - May completion CIC have won the contract and are due to handover May 2014. Maroochydore and Kunda Park - Office refurbishments These newly acquired centres will receive refurbished retail offices and we will also look at the expansion possibilities of each of these centres.

Browns Plains

Pymble - Demolition commenced Stage 1 DA is now lodged with Council. Demolition and strip out has commenced Wollongong - Expansion underway Stage 2 units are underway by GWH and we are bringing forward the Stage 3 design to complete the development of this property.

For regular updates please follow me on Yammer and Twitter.

Browns Plains - Completed Is now completed, well done to Total Construction.

Michael Macheledt Development & Construction Manager

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Kennards Kourier January 2014