Monday 22nd December 2014
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DNZ Property Fund's plans to further expand its Westgate Mall into land opposite the site are being opposed by former landowner Westgate Town Centre Limited, which disputed the listed property investor's right to the development.
The Auckland-based property investor wants to add a 7,000 square metre development of retail, dining and office space, for an initial cost of $30 million, on land opposite its $155 million Westgate Mall development, it said in a statement. Under the 2013 agreement to acquire land from the WTCL, DNZ said it had a right to undertake Westgate Stage Two, something the former land owner is disputing.
Under the agreement, DNZ can request an initial 35-year ground lease from WTCL at no cost, and no annual ground rental payable, while WTCL can acquire the development for 115 percent of its development costs within three years of DNZ taking the group lease. If WTCL didn't acquire the development within the three year period, DNZ can obtain a freehold title to the land at no cost.
"DNZ believes that the terms of the agreement are clear and does not agree that there is any matter capable of dispute," DNZ said. "It may however need to take steps in order to enforce its rights in respect of Westgate Stage Two under the agreement."
DNZ is funding both Westgate developments by selling non-core assets and existing banking facilities. As at Dec. 10, the property investor had sold $23.5 million of non-core assets, and has plans for $50 million worth of divestment.
Shares of DNZ last traded at $1.89, and have gained 41 percent since the start of the year.
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