Precinct Properties deal: Half-share of Auckland's ANZ Centre sold for $177m

Scott Pritchard at the ANZ. Photo / Natalie Slade

Precinct Properties has struck a deal to sell its half-stake in Auckland's ANZ Centre for $177 million.

Chief executive Scott Pritchard announced the sale but did not say who the buyer was and has not responded to inquiries on that topic. However, Pritchard did say the sale price was consistent with a valuation last June.

The tower at 23-29 Albert St is valued at $355.6m, was built in 1992 and extensively refurbished in 2013. In the past few months, tenants have shifted into Precinct's new $1 billion Commercial Bay office tower on the waterfront.

In 2018, Precinct said it would sell a half of the building for $181m to giant American business Invesco.

Precinct has a policy of selling older buildings and recycling capital.

"This capital recycling initiative will see proceeds from the sale used to repay bank debt and reduce leverage," today's statement said.

Pritchard also announced preliminary revaluation gains on the company's property portfolio of about $149m in the half-year to December 31, 2020. That means the company now owns properties valued at $3.1b.

The latest revaluations show a 5.1 per cent increase in the value of the portfolio in the six months.

Once the ANZ Centre is sold, and taking into account the latest revaluation gains, Precinct's gearing will be only about 26 per cent.

The statement said the ANZ sale was conditional on regulatory approval. If all goes according to plan, settlement will be in April.

Wellington property revaluation gains were greater than they were in Auckland, the company said.

"On a like-for-like basis, Auckland asset valuations increased by around 4 per cent and Wellington assets recorded an uplift of 8 per cent, compared with the draft interim book values. The growth in portfolio values were predominantly driven by a material compression in capitalisation rate, with Precinct's weighted average capitalisation rate firming around 40 bps [basis points] to 4.9% over the half year.

"Market rental growth in Wellington and development progress at Bowen Campus stage two also contributed to the positive outcome. The revaluation remains subject to the independent auditor's review and finalisation of Precinct's interim results to be announced on February 25," the company said.

In 2018, Pritchard said he had a deal to sell the half share.

A report at the time said that was to American investment firm Invesco. That Atlantic-based business was reported three years ago as managing US$973b of assets worldwide.

Precinct has subsequently listed Invesco as the other half-owner of the building.

"The... 50 per cent sale of the building initiates an equal share interest between Precinct Properties and Invesco. Day-to-day management remains with New Zealand-based owners, Precinct Properties," it said on its web site.