Abu Dhabi’s sovereign wealth fund is selling its holding in NZX-listed landlord Precinct Properties New Zealand for $261 million, according to stock exchange announcements.
Precinct, which owns the $1 billion Commercial Bay centre on Auckland’s waterfront, has issued stock exchange notices about the deal today.
Yesterday, the Abu Dhabi InvestmentAuthority’s Haumi Company struck a deal with Jarden Partners to manage and underwrite the sale of 237m shares in Precinct, a notice said.
Those were worth $261,678,360.90.
Settlement of the sale is expected to occur on Monday.
Australian media reported the block trade in a positive light.
The exit looks well-timed on the sovereign wealth fund’s part, after New Zealand’s central bank left its official cash rate on hold at 5.5 per cent, boosting confidence in the property market, the Australian Financial Review said.
George Crawford, Precinct deputy chief executive, said today: “We don’t think this sale indicates any concern with the New Zealand property markets, but overseas markets like North America have had significant falls in value and some global investors will be looking to acquire property there at lower prices.
“Haumi have no day-to-day involvement with Precinct’s operations and no other joint ventures, etc. The sale has been largely to our existing investors and will increase our free float market capitalisation, which should be a positive for buyer interest in Precinct,” Crawford said.
In 2021, the Herald reported that Australian and Middle Eastern interests had agreed to sell the management contracts for $215m.
Sydney-headquartered AMP Capital Investors and a subsidiary of the Abu Dhabi Investment Authority were then reported to be terminating their management deal with Precinct Properties.
AMP Haumi Management said it had agreed to end that for a one-off payment of $215 million, which Precinct said would result in annual savings of $14.6m.
The management business was a joint venture between the two businesses for what was previously called the AMP NZ Office Trust.
Mohammed Alnuaimi was a Precinct director in 2021.
At that time, Mohammed Alnuaimi of Abu Dhabi was a director of Precinct. He resigned from the board on November 3, 2022. At that time, Haumi Company said they would no longer appoint any directors to Precinct’s board.
Craig Stobo, Precinct’s independent chairman in 2021, said the Australian and Middle Eastern management had helped create significant value for Precinct shareholders, growing the business in the last decade
This month, Precinct reported a $17.1m net profit after tax for the half-year to December 31, 2023.
That was a turnaround on 1HY22′s $1.8m loss. Revaluations were the biggest influence, previously written down by $53.6m but in the latest period only down by $5.5m.
Precinct recorded little change in revenue or operating profit before indirect expenses: $69.1m previously rising to $73.8m in the latest six months.
The company was upbeat on its outlook, citing buying Auckland’s Downtown Carpark site which provides an opportunity of significant scale and growth in residential development after striking an arrangement with Lamont & Co.
But it added a rider: “Precinct’s participation in residential development management will likely lead to volatility in earnings which will be further considered in Precinct’s dividend policy.”
The business has started two new build-to-sell apartment developments with a total sales value of around $300m expected.
It is in a joint venture with Ngāti Whātua Ōrākei to buy office buildings in the Quay Park area - Te Tōangaroa - with Asian investor PAG.
Precinct has also sold the Mason Bros. building in Auckland’s Wynyard Quarter for $50.3m and is planning to use that money to reinvest in development.
Precinct finished the Deloitte Centre after a $300m+ refurbishment of the building where InterContinental Auckland is now also operating. Bell Gully will move in soon.
Its portfolio is 98 per cent occupied on a 6.4-year weighted average lease.
Shares are trading around $1.20, down 10 per cent annually. Precinct has a market cap of $1.9b.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
