Kiwi Property Group, which manages a $3 billion portfolio of shopping centres and office buildings, is selling its Majestic Centre office tower in Wellington to Investec Australia Property Fund for $123.2 million.

Auckland-based Kiwi Property has invested in earthquake strengthening the tower, in what it says was one of New Zealand's largest seismic upgrade projects, and will use the funds from the sale to pay down bank debt, giving it further flexibility as part of its strategy to fund new developments including expansion of its Sylvia Park, New Lynn and Westgate sites in Auckland.

The purchase is the first in New Zealand for Investec, which is listed on the Johannesburg Stock Exchange with the aim of providing South African investors with direct access to the Australian commercial property market and is in line with its strategy of investing in well-located, high-quality assets. It takes the Fund's total portfolio value to about A$910m (NZ$1b).

Kiwi Property said the sale is due to settle next month and it will manage the Majestic Centre for Investec.

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Shares in Kiwi Property last traded at $1.32 and have dropped 5.7 per cent the past year.