Archive | Albert St

A milestone for the city rail link project, and a start on the next major section

The 2-year task of reinstating Albert St began last week while, over at Britomart, excavation for the city rail link tunnel can now proceed at full speed.

Image above: Work underway on the tunnel at the intersection of Albert & Customs St West.

The first is an obvious milestone in the development of the rail tunnel under Auckland’s downtown business area because, for most of the time the project has been underway, pedestrians have been able to peer down.

Britomart is far more complicated, requiring the railway station building – the city’s former chief post office – to be jacked up to enable excavation for the tunnel that will cross under Lower Queen St, under the Commercial Bay tower under construction on the former Downtown shopping centre site, around under Albert St & up to Karangahape Rd and on to Mt Eden station.

The Albert St tunnel project in September 2017 (my photo above) and (below) in September 2018.

The Government-Auckland Council company in charge of the rail project, City Rail Link Ltd, in its latest newsletter out last Thursday, counts some major steps forward:

  • Albert St reinstatement starts
  • Excavation under the Albert/Customs St intersection paves the way for construction of the tunnel box sections that will eventually link the Albert St trench to the rail tunnels being built under the neighbouring Commercial Bay development
  • The Britomart load transfer is complete and tunnel excavation can proceed.

City Rail Link chief executive Sean Sweeney said backfilling of the trench which runs directly beneath Albert St will eventuate in the roadway being reinstated & returned to road users by late 2020.

Backfilling with 50,000m³ of materials – a mixture of crushed concrete, crushed rock, sand & flowable fill – will take until mid-2019 to complete.

The work is being completed by Connectus – the McConnell Dowell Constructors Ltd & Downer EDI Ltd joint venture delivering the city rail link C2 contract.

Under the Customs/Albert St intersection, excavations have reached the halfway mark in preparation for building a key section of rail link tunnel box.

The twin underground tunnels being built under Albert St will connect at that point with those that have been built under the adjacent Commercial Bay development site.

Excavation is also continuing with the installation of supports for the trench walls and the removal of an old stormwater pump chamber. Construction of the tunnel structure under the intersection is expected to start this year, with a full connection being made to Commercial Bay by mid-2019.

On the C1 contract in Queen St, Downer & Soletanche Bachy JV completed the weight transfer of the 106-year-old category 1-listed ex-post office heritage building onto a series of underpinning frames, which will protect it from damage while rail link infrastructure is built underneath.

The City Rail Link website is full of images & more detail on the project.

2 time-lapse videos on the link’s website show a 6-month sequence of the city rail link tunnel box being built underneath Albert St. One camera faces south, and the other faces northern Albert St (downhill).

Links:
Albert St milestone
Video: Latest look inside the Albert St trenches
Britomart tunnel excavation is go

Attribution: Company release.

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Precinct Properties presents a long list of positives from development & in financial structure

Major commercial property owner – and nowadays developer – Precinct Properties NZ Ltd lifted its net profit after tax for the year to June by 57.2% to $254.9 million.

The NZX-listed company’s biggest project at the moment is the $1 billion Commercial Bay development, redeveloping the Downtown Shopping Centre site at the foot of Auckland’s central business district. It’s also developing Bowen Campus in Wellington and has completed developments in Auckland’s Wynyard Quarter.

Image above: The trio of buildings at the centre of Precinct Properties’ strong performance – the existing PwC Tower at right, the new PwC Tower under construction and the existing HSBC House at 1 Queen St, to be redeveloped into a hotel with office above.

Chief executive Scott Pritchard said yesterday Fletcher Building Ltd had provided revised completion dates at Commercial Bay of September 2019 for the retail & December 2019 for the new PwC Tower (across Albert St from the building currently called PwC Tower).

Precinct also announced its plans for 1 Queen St, sitting on the Quay St frontage of the redevelopment, to include a 244-room luxury hotel operated by the InterContinental Hotels Group (IHG) – see separate story.

9% revaluation gain

Mr Pritchard said the quality of Precinct’s portfolio had resulted in a $208.7 million (9%) portfolio revaluation gain to $2.5 billion.

Precinct Properties is the largest city centre real estate owner in New Zealand, and Mr Pritchard said it was committed to its long-term strategy as a city centre specialist.

“The last financial year has delivered another strong result for our business. As we move forward with our strategy, we progressed a number of initiatives and achieved key milestones during the year.

“We have continued to take an active management approach with our investment portfolio & our development pipeline, leveraging Precinct’s market position.”

“The long-term outlook for the Auckland market remains strong, with solid demand drivers for city centre real estate across the office, retail, hotel & residential markets.”

Mr Pritchard said the Wynyard Quarter & Bowen Campus also contributed to this growth, with works progressing well over the last 12 months.

The Precinct Properties precinct: From the ANZ Centre up Albert St, down to the waterfront via Commercial Bay where Precinct is developing the new PwC Tower across the street from the existing PwC Tower, and yesterday announced the redevelopment of 1 Queen St (at right) to contain a hotel with offices on the upper levels.  Other Precinct buildings in this precinct are Zurich House and the AMP Centre.

Commercial Bay update:

Precinct’s reinforced its vision & long-term commitment to the rejuvenation of the central city with the announcement of the $298 million development at 1 Queen St (currently HSBC House), which will include the hotel in the lower half of the building.

Commercial Bay, looking out between the Cloud & Princes Wharf.

This development has been designed to integrate seamlessly with Commercial Bay. Its upper floors will also be remodelled to contain high quality office space & unique food & beverage options, including a rooftop bar.

Commercial Bay & its retail wrap’s Customs St frontage yesterday.

Mr Pritchard said phase one of the Commercial Bay retail remained on schedule, with international powerhouse H&M opening its flagship 3800m² store fronting Customs St in a fortnight, on Thursday 30 August. Passersby have been able to watch H&M’s creation in the new lowrise building beside the 21 Queen St offices of Zurich House, as windows have started to be placed at lower levels of the 39-storey Commercial Bay tower at the corner of Customs & Albert Sts.

“This marks a significant milestone for the transformational development which is reinvigorating the heart of the central city,” Mr Prithcard said. “The superb 4-storey retail offering promises to be the country’s premier H&M destination.

“Phase 2 of the Commercial Bay retail & the new PwC Tower have revised estimated completion dates, following the confirmation of a completion programme from main contractor Fletcher Building Ltd.

The revised completion dates are September 2019 for the Commercial Bay retail & December 2019 the new PwC Tower.

“The programme provided by Fletcher Building has been independently reviewed by Precinct’s expert programmer, RCP, who confirm the revised dates are achievable, subject to the main contractor’s performance.

“Precinct remains confident with the provisions of its construction contract, which protect the business from losses due to contractor delay.

“While any delay in a project is disappointing, we believe Fletchers are maintaining a very high standard of quality during a very challenging period within the construction industry.”

Commercial Bay’s entrance on to Quay St.

The new timeframes also affect prospective tenants: “Precinct continues to work closely with retailers at Commercial Bay to communicate the revised occupation dates. For those occupiers coming into the new PwC office tower, all have lease terms which extend beyond the revised completion dates of the office tower.”

Mr Pritchard said Commercial Bay continued to achieve a good level of leasing enquiry. Precinct had secured retail commitments to 76% and office commitments to 78%: “The $1 billion Commercial Bay waterfront development & lifestyle district is destined to become Auckland’s newest shopping, dining & social hub, offering a vast range of food & beverage outlets.”

Links:
Precinct Properties
Precinct Properties annual report
Commercial Bay

Related stories today:
Precinct Properties presents a long list of positives from development & in financial structure
Precinct Properties valuations & profit up, debt low
The 1 Queen St redevelopment

Attribution: Company release.

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Sale of chip off old Herald site enables hotel development to proceed

An 1100m² central city corner – part of the site of the NZ Herald for over 150 years – has been sold for $31 million at a land value of $28,181/m².

Local development company Mansons TCLM Ltd settled the sale of the 1100m², at the corner of Albert & Wyndham Sts, to Australian company Pro-invest Developments Pty Ltd last week. The Sydney company is planning a 490-room dual-branded hotel development of about 37 levels on the site (pictured).

Bayleys senior broker Paul Hain in conjunction with the agency’s director of hotels, Nick Thompson, negotiated the sale.

Mr Hain said the transaction would enable a 22,500m² hotel building to be developed on the corner portion of the 4258m² former Herald site which Mansons originally put up for sale.

“While the sale agreement was negotiated last year, settlement was contingent on the issuing of a new standalone title for the land which Pro-Invest has purchased. This will now allow them to proceed with the construction of the hotel.”

Mansons confirms office plans for balance of site

All 15,000m² of the old Herald buildings have been demolished, and Mansons TCLM director Culum Manson confirmed the company intended to develop a lowrise large-format office building of 25-30,000m² on the remaining 3158m² of land, which also has frontage onto Mills Lane.

“We are currently in the design & resource consent planning phase for this building, which will be similar to our other recent office developments, with very large individual floor areas which are popular with tenants.”

The Herald vacated the property in 2015, when parent company NZME Ltd relocated all its Auckland media operations into a new office complex which Mansons developed on the corner of Victoria St West & Graham St.

$100 million of hotel sites sold or under contract

Mr Thompson said the sale was one of a number of Auckland cbd hotel development sites that

Bayleys’ hotel division has sold or has under contract at a total transaction value of over $100 million.

“We are receiving continuing enquiry from offshore investors for quality hotel development sites in Auckland in particular, with interest heightened by major forthcoming events such as the America’s Cup & APEC leaders’ summit.”

Pro-invest Development said last year the new hotel, which will have its main entrance off Wyndham St, would accommodate 2 InterContinental Hotels Group brands. It aims to have the Auckland hotel opened in 2020.

Managing director Tim Sherlock said there would be 290 Holiday Inn Express rooms on the lower levels and 200 EVEN hotel rooms on the upper levels, which Pro-invest would develop, own & manage under a franchise agreement with IHG.

EVEN Hotel Auckland will be the first for that brand outside North America, and also the first in Pro-invest Group’s plans for a portfolio of 10-15 EVEN Hotels in Australasia on behalf of the Pro-invest Australian Hospitality Opportunity Fund, in partnership with IHG.

Pro-invest Developments is part of Pro-invest Group, a boutique investment firm specialising in private equity real estate & real estate asset management.

IHG has developed the brand in response to what it says is a consumer shift toward holistic wellness – especially as it relates to travel. Features of the hotel include best-in-class fitness facilities, in-room exercise zones and nutritionally designed menus, with fresh & organic, ethically sourced foods.

IHG’s chief executive for Asia, the Middle East & Africa, Jan Smits, said wellness travel was a rapidly growing global phenomenon: “With EVEN Hotels, we have a created a brand that will deliver a local wellness experience to travellers for whom health & wellbeing is so important. I firmly believe that the EVEN Hotels brand will be a key driver in market share growth in New Zealand & Australia.”

Links:
Mansons TCLM
Pro-invest Group

Attribution: Agency release, company website.

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Sale of AA Centre to SkyCity confirmed

Asset Plus Ltd (the former NPT Ltd) has confirmed that SkyCity Entertainment Group Ltd settled its purchase of the AA Centre, on the corner of Victoria & Albert Sts in central Auckland, last Thursday.

Asset Plus chair Bruce Cotterill said the company had applied substantially all of the net proceeds from the $47 million sale price towards debt repayment.

He said SkyCity had retained an amount until recladding works to the stairwell are completed.

The 18-storey tower, running from 99 Albert St through to Federal St, has office space above ground-floor retail & basement parking, and net lettable area of 12,205m². It’s unit-titled, and Asset Plus owned most of it. Asset Plus had the building on its books at $40.85 million.

SkyCity said when the acquisition was announced last October the deal was consistent with its intention to consolidate control over its Auckland precinct as part of the Auckland masterplanning it’s undertaken.

Earlier story:
15 October 2017: SkyCity buys AA Centre to consolidate precinct control

Attribution: Asset Plus release.

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Rail tunnel excavation of Customs St intersection begins

Crossing the diagonal between the Old Customhouse & Quay Tower at Auckland’s downtown Customs-Albert St intersection, pedestrians can’t miss the rising Commercial Bay office tower and the barricades for tunnel construction.

But the barricades hide the excitement of the excavation involving both projects, which started this week.

Image above: The start of excavation to join the Albert St tunnel to the tunnel under Commercial Bay.

City Rail Link Ltd, the council-Government company undertaking the rail project, said in its latest newsletter this work would pave the way for construction of the rail tunnel box section linking the Albert St trench with the tunnels being built under the Commercial Bay development.

“Thanks to the concrete bridge deck constructed over the intersection about a year ago, traffic flow will be unaffected by the excavation occurring underneath. The spoil will be removed from the site using excavators & conveyors.

“Contractors will also be removing an old brick stormwater tunnel located under the intersection and replacing it with a temporary stormwater line that diverts water away from the location of the future CRL tunnels. The temporary line will be permanently diverted at a later date to connect with the Swanson St line, created during the Albert St stormwater realignment works last year.”

The rail link company expects construction of the tunnel structure to start in this area later this year, and a full connection made between the 2 construction sites by autumn 2019.

Crossing at Albert St intersections gives you an idea of the increasing depth of the tunnelling. CRL said the 6th section of tunnel wall had been poured below Albert St, meaning the first 132m of floor & 72m of the wall are complete.

The CRL website provides text, photos & drone views of the tunnelling programme.

Dr Sean Sweeney.

CRL’s new chief has Australian background in innovation

City Rail Link Ltd’s new chief executive, Sean Sweeney, a New Zealander who had been working in Australia, took up the position on Monday 2 July. His predecessor, Chris Meale, retired in March.

Dr Sweeney was educated at Wellington Polytechnic (NZCE), Auckland University (BE Honours), both in civil engineering, and Melbourne University (PhD in construction economics).

Since 2004, he’s been executive director at Major Projects Victoria, head of construction at major developer & builder Grocon Pty Ltd, managing director at Atelier Projects Pty Ltd – both companies which expound innovation – and chief executive at Ontoit Global Pty Ltd, a specialist in public-private partnerships.

Links:
City Rail Link newsletter
Watch drone footage of the Albert St trench construction works online.
Click to view

Attribution: CRL newsletter.

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Precinct deal on ANZ Centre is with US fund

Precinct Properties NZ Ltd has entered into a binding agreement with a fund controlled by US investment manager Invesco Ltd for the sale of a 50% interest in the ANZ Centre in Auckland for $181 million. The sale transaction remains subject to Overseas Investment Office approval.

Precinct chief executive Scott Pritchard said on Friday the sale price was consistent with the 30 June 2018 independent valuation and reflected a 12% premium to the 30 June 2017 valuation on a pro rata basis.

Precinct acquired the building on Albert St in 1997, and Mr Pritchard said it had generated a property level internal rate of return of 9.0%. Precinct completed a $76 million upgrade in 2013 and, Mr Pritchard said, it remained committed to maintaining the building as one of New Zealand’s premium office towers.

Following settlement of this sale and assuming the draft portfolio revaluation gain of $202 million, announced last Monday, Precinct will reduce its gearing to about 19.5%. Pro forma gearing will sit at about 29% after allowing for all commitments, including development of Commercial Bay in Auckland and Bowen Campus in Wellington.

Mr Pritchard said the sale “demonstrates our active management approach. It is in line with our business strategy and enables us to recycle capital out of assets like the ANZ Centre into higher yielding development opportunities.”

At the end of May, Atlanta-based Invesco had $US977 billion of assets under management

Earlier stories:
25 June 2018: Precinct Properties gets 8.8% revaluation lift
24 April 2018: Precinct working on ANZ Centre deal, has conditional Wellington sale

Attribution: Company release.

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Foodcourt unit sells, old warehouse converted from restaurant to offices

A foodcourt unit in the new Park Residences development by Conrad Properties Ltd has been sold, one of 4 recent sales by Bayleys agents around the Auckland cbd.

Among the others, a brick warehouse (pictured) off Drake St in the Victoria Park Market, most recently used as a restaurant, has been turned into office space in the latest conversion.

On the western fringe in Grey Lynn, a multiple residential building has been sold along with redevelopment documents.

CBD

Albert St

Park Residences, 35 Albert St, unit F7:
Features: 20m² unit in Park Central foodcourt on ground floor of recently completed Park Residences apartment building
Outcome: sold vacant for $750,000 at $37,500/m²
Agent: Millie Liang

Victoria Quarter

30 Drake St, level 1:
Features: 279m² office floor with views over Victoria Park, 3 parking spaces; fitout includes concrete polished floors and a multi-media system that controls fully automated lighting, music & audio-visual systems; 1-year lease back to owner-occupier vendor
Rent: $162,500/year net + gst
Outcome: sold for $3.25 million at a 5% yield, $10,750/m² (excluding parking)
Agent: Alan Haydock

37 Drake St:
Features: 573m² former brick warehouse building, previously occupied by The Matador bar & restaurant and recently converted into character office space with new 6-year lease from April 2018; bar area on the lower ground floor which flows out onto a balcony, now a staff lunchroom & break-out area
Rent: $199,079/year net + gst
Outcome: sold for $3.15 million at a 6.32% yield
Agents: Cameron Melhuish & Matt Gordon

192 Victoria St West, unit 4:
Features: 66m² 2-level modern office unit, parking space, above ground-floor retail premises occupied by The Coffee Shop and opposite Spark office campus
Outgoings: rates $3690/year including gst; body corp levy $2987/year
Outcome: sold vacant for $540,000 at $8189/m² (excluding parking)
Agent: Brendan Graves

Isthmus west

Grey Lynn

454 Great North Rd:
Features: 1626m² site zoned terrace housing & apartment building, large character building with 30 residential tenancies; 54-unit bulk & location report prepared by Leuschke Group
Rent: $336,440/year gross
Outcome: sold for $4.1 million
Agents: Phil Haydock & Alan Haydock

Attribution: Agency release.

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Stamford Residences unit sells, Eclipse unit passed in

A large apartment in the Stamford Residences, built above the Stamford Plaza Hotel in downtown Auckland (pictured), was sold at Ray White City Apartments’ auction yesterday after the vendor twice cut the sale price.

Even then, a sale wasn’t guaranteed. After auctioneer Ted Ingram disclosed the reduced price the vendor was prepared to sell at – $1 million, when bidding had stalled at $985,000 – he commented: “If I could buy my way out of a multi-offer [process that sometimes follows when a property is passed in at auction] for $15,000, I’d go for it.” It took a flurry of 5 more bids to reach the new reserve, and a sale.

A unit in the uptown Eclipse building was passed in after one bid.

CBD

Albert St

Stamford Residences, 26 Albert St, unit 1211:
Features: 104m², 2 bedrooms, 2 bathrooms, parking space
Outgoings: rates $2279/year including gst; body corp levy $7541/year
Outcome: sold for $1 million
Agent: Damian Piggin

Uptown

Eclipse, 156 Vincent St, unit 11B:
Features: 62m², fully furnished 2 bedrooms
Outgoings: rates $1539/year including gst; body corp levy $5503/year
Income assessment: $595/week, fixed until 18 October
Outcome: passed in at $500,000
Agent: Keisha Gutierrez

Attribution: Auction.

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Quiet times at 3 auction sessions – but one sale close to $15,000/m²

The generally quiet time in residential auctionrooms was emphasised in 3 sessions at Barfoot & Thompson’s city office on Wednesday & Thursday.

Those performances answer the question I’m asked most these days:

The everything question: What’s happening in the market? At auctions, bidders have become a rare species, which puts pressure on vendors. Even where there are bidders, there’s a common reluctance to offer anything near yesterday’s reserve.

Chinese buyers (local or visiting) have been notable for their absence for over a year, courtesy of restrictions in China and now here.

On Wednesday I watched a mate bid on the last property listed for the day. He & his wife were the only potential customers left in the room. After some nudging, they lifted their offer a little, but not enough to excite the auctioneer and nowhere near the vendor’s expectation.

A small unit well up the new Conrad tower on the corner of Albert & Swanson Sts, Park Residences, achieved a sale price close to $15,000/m² ($14,885), which is in the realm of pricing for new product in the central city.

The pricing of new product over the last 3 years or so had also lifted values for secondary stock, but I see secondary prices dropping back under $10,000/m² unless the apartment is distinctive, and below $8000/m² for older units.

On Thursday, the auction of the one property scheduled for Barfoot’s apartments & commercial morning session, a unit on Princes Wharf, was deferred a fortnight.

In the afternoon session, an Onehunga house was sold and the other 9 homes listed were passed in, 6 of them without a bid placed. The afternoon offering included a Remuera cross-lease, a Stonefields terrace and an Ascent penthouse on Nelson St (details of them below).

Wednesday afternoon was a more productive session for the auctioneer – 5 sales under the hammer, another sold shortly after and one sold prior out of 20 homes listed. From that session, you can check details below of 10 apartments, suburban units & cross-leases.

The properties are listed below geographically, not according to auction session.

Barfoot’s also issued its residential market calculations for April today. You can click through to that at the foot of this item.

The auctions:

CBD

Albert St

Park Residences, 35 Albert St, unit 1602:
Features: 35m², studio + study, 5m² balcony, in new Conrad development opened last month
Outgoings: body corp levy $2346/year
Outcome: sold for $521,000
Agents: Tom Jiang & Tim Lee

Federal St

The Federal, 18 Federal St, unit 2B:
Features: 51m², one-bedroom apartment, balcony
Outgoings: body corp levy $3274/year
Outcome: passed in at $418,000
Agents: John Zhang & Richard Tan

Uptown

Pembridge, 38 Symonds St, unit 16:
Features: one-bedroom apartment, parking space
Outgoings: body corp levy $3378/year
Outcome: passed in at $375,000
Agents: Jo Pickering

Victoria Quarter

Ascent, 149 Nelson St, unit 803:
Features: 2-storey penthouse, one bedroom, 2 balconies, parking space
Outgoings: body corp levy $3766/year; the unit’s $9647 defects levy last year hasn’t been paid in full; the buyer will not have to pay, and won’t benefit from any proceeds from, a $4000 litigation levy this year; a $41,300 levy has been forecast for this unit for stage 2 remediation works; a High Court claim has been lodged regarding construction defects but the vendor of this unit is not a party
Outcome: no bid
Agent: Stephen Chang

Waterfront

Princes Wharf, Shed 22, unit 1:
Features: leasehold, 63m², one bedroom on western side, balcony, parking space
Outgoings: ground rent increase capped at 3%/year or CPI, whichever is greater
Outcome: auction postponed to Thursday 17 May
Agents: Stephen Shin & David Lee

Isthmus east

Ellerslie

90F Ballarat St:
Features: cross-lease, 1/6 share in 2241m², 3-bedroom house, double internal-access garage
Outcome: passed in at $850,000
Agents: George Fong & Laura McAuley

Parnell

25 Cheshire St, unit B5:
Features: one-bedroom apartment, deck, parking space
Outcome: sold prior
Agents: Matt O’Brien & Cristina Casares

Remuera

123C Ngapuhi Rd:
Features: cross-lease, quarter share in 910m², 2-bedroom unit, courtyard, carport
Outcome: passed in at $780,000
Agent: Susan Palmer

Stonefields

136 Stonefields Avenue:
Features: 1/14 share in 964m² + 200m² fee simple, 2-storey 4-bedroom terrace, 2 bathrooms, double garage
Outcome: no bid
Agents: Wendy Sadd & Helen Lam

Isthmus west

Herne Bay

29 Hamilton Rd, unit 5:
Features: cross-lease, 1/8 share in 2086m², 2-bedroom unit, balcony, parking space
Outcome: sold for $1.3 million
Agents: Felicity Scott

Mt Albert

65 Woodward Rd, unit 1:
Features: 2-bedroom townhouse, courtyard, parking space
Outcome: withdrawn from auction
Agents: Jacqui Freeman & James Ju

Mt Eden

1A Taupata St, unit 4:
Features: cross-lease, quarter share in 1472m², 2-bedroom 1980s townhouse, courtyard, carport
Outcome: no bid, back on market at $1.195 million
Agents: Ketiesha Elliott & Frank Excell

Sandringham

30 Arabi St, unit 2:
Features: cross-lease, quarter share in 1936m², 2 bedrooms
Outcome: sold for $668,000
Agents: Bella Stefano & Sherry Shao

45 Fowlds Avenue, unit 3:
Features: 2-bedroom unit, garage
Outgoings: on strata title but no body corporate levy
Outcome: sold for $831,000
Agent: Dee Brennan

Related story today: Barfoots chief sees housing market lift approaching

Attribution: Auctions.

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Precinct working on ANZ Centre deal, has conditional Wellington sale

Precinct Properties NZ Ltd says it’s working with one party on the sale of a 50% interest in the 39-storey ANZ Centre in Auckland and has an agreement to sell the quake-damaged former Deloitte House in Wellington (pictured) at a huge markdown.

Precinct chief executive Scott Pritchard said yesterday: “The half-share interest in the ANZ Centre has received very strong interest and we look forward to forming a long-term relationship with the preferred bidder.

“With several options for 10 Brandon St having been assessed to date, we believe the sale of this asset represents the best option for Precinct. Progressing these asset sales will enable Precinct to focus on and recycle capital into its future development opportunities.”

The company sought expressions of interest this year in a 50% interest in the ANZ Centre on Albert St in Auckland. The campaign has closed, and Mr Pritchard said pricing indications were at a premium to the June 2017 valuation of $324 million.

Precinct spent $76 million refurbishing the whole of the ANZ Centre after the bank committed to a new long-term lease in 2011. The building has a net lettable area of 33,520 m² and a weighted average lease term of 8.6 years.

Mr Pritchard said there’d been strong interest in the opportunity to take a 50% interest in the building. “Precinct has agreed to a period of exclusivity for one party to complete due diligence and enter into a binding sale & purchase agreement. At this stage there is no binding agreement for the sale & purchase of the property.”

Changing fortunes on Brandon St

Precinct took the former Deloitte House at 10 Brandon St, Wellington, out of its investment portfolio last year, when its value had already plummeted, and called it a development property. Then the company abandoned the idea of fixing it up itself and looked for a buyer.

It’s found one at $10.2 million, conditional on ground lessor approvals, and the sale is due to settle in August.

Deloitte House was valued at $62 million in 2008 but had dropped to $49.3 million, with a carrying value of $45 million, in 2015.

Following the November 2016 Kaikoura earthquake, the building needed to be remediated & seismically improved, and the valuation (and carrying value) dropped in 2017 from $49 million to $26.1 million, and the some more.

In Precinct’s report in March on the December 2017 half-year, the company said it had written the valuation down from $20.2 million in June to just $7 million in December.

The building had 14 storeys when it was constructed in 1983 and had 2½ new floors added during a retrofit in 2005-06. It also now has 34 basement parking spaces & ground-floor retail, and a total lettable area of 12,972m².

Attribution: Company release.

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