Kiwi Property will buy 50 percent of The Base after Waikato-Tainui turned down the property investor's proposal to buy all of the shopping centre at Te Rapa, Hamilton.

When the proposal was announced in April, Kiwi said Tainui would consider selling its remaining stake but has chosen to retain its interest. Kiwi will pay $192.5 million in cash and stock for a half share in the shopping complex which comes with about 6.7 hectares of vacant land suitable for development. The deal is to settle on May 31.

The purchase gives Kiwi an interest in what it called New Zealand's largest, single-site retail centre, which "aligns with our strategy of owning dominant regional shopping centres," said chief executive Chris Gudgeon. Kiwi will manage the property for the joint venture, the Auckland-based company said in a statement.

The Base is on a site of about 30 hectares and has a total retail floor area of 85,256 sqm.

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Under the terms of the joint venture, Tainui has the right to require Kiwi to acquire its remaining 50 percent stake at a price determined by independent valuation between 2018 and 2021.

Tainui retains freehold title to the land and Kiwi will acquire 120-year ground leases on which the ground rents are prepaid. Kiwi will fund the acquisition via a new bank facility, which would increase its gearing to 34 percent, it said in April.

The site including the vacant land was within New Zealand's "golden triangle" of economic and residential growth between Auckland, Hamilton and Tauranga which was expected to account for much of the nation's population growth over the next two decades, it said last month.

The deal comes after Kiwi announced the sale of the southern part of its recently developed downtown Hamilton Centre Place South shopping centre to an undisclosed local buyer for $46.7 million, a 3 percent discount to its book value.
Kiwi's shares last traded at $1.495 and have gained 11 percent this year, just ahead of the NZX 50 Index's 9 percent gain.