Friday 18th June 2021
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Precinct Properties New Zealand Limited is pleased to announce a $250 million equity raise to fund the acquisition of two Wellington office buildings through an underwritten $220 million Placement (Placement) and a non-underwritten Retail Offer of up to $30 million with the ability to accept oversubscriptions at Precinct’s discretion (Retail Offer) (together, the Equity Raise).
The proceeds from the Equity Raise will be used to fund the acquisition of two Wellington office assets, Bowen House and the Freyberg Building, and reduce Precinct’s gearing providing additional funding capacity to assist with future development opportunities. Following the two Wellington acquisitions and the recently announced draft full year revaluation gain of $284 million, FY21 year-end gearing is expected to be around 29%.
Today, Precinct has also announced that the Board expects dividend guidance for the 2022 financial year of 6.70 cps. This represents 3.1% year-on-year growth in dividends to shareholders.
Details of the Wellington acquisitions:
Precinct has entered into an agreement to acquire Bowen House in Wellington. This high profile office building is situated in the heart of the government precinct at the northern fringe of the CBD and is in close proximity to several of Precinct’s existing assets. The 14,000 square metre tower comprises 23 levels of office space, ground floor retail tenancies, an entry lobby to the Beehive via a subterranean link, and carparking.
Precinct will pay $92 million and undertake a comprehensive redevelopment of the building at an estimated cost of around $57 million. The redevelopment will include seismic strengthening (to 100% NBS) and refurbishment works. On completion of works in mid 2023, Bowen House will be fully occupied by The Parliamentary Services on a new 15-year net lease. The acquisition is expected to yield 5.25% on completion of the works and is expected to settle in July 2021.
Commercial terms have also been agreed for the acquisition of the Freyberg Building in Wellington. This is a strategic redevelopment opportunity located in the Government precinct and remains conditional at this stage on Precinct due diligence. On completion of the acquisition, Precinct anticipates progressing with design for the redevelopment while benefiting from holding income.
Details of the Equity Raise:
The $250 million Equity Raise comprises an underwritten Placement of approximately $220 million and a non-underwritten Retail Offer of up to $30 million (with the ability to accept oversubscriptions at Precinct’s discretion).
The $220 million Placement is underwritten (excluding Haumi’s pre-commitment noted below) and will be conducted today through a bookbuild in which institutional and other select investors in New Zealand, Australia and other jurisdictions will be invited to participate. The Placement has been underwritten at a floor price of $1.51 per new share, being a 5.0% discount to the last close price of $1.59 on 17 June 2021. Settlement and allotment of new shares issued under the Placement will take place on 24 June 2021. A trading halt has been granted by NZX to facilitate the Placement.
Precinct also intends to undertake a non-underwritten Retail Offer of up to $30 million to allow eligible shareholders with a registered address in New Zealand to apply for up to $50,000 of new shares. New shares will be offered under the Retail Offer at the lower of the price paid by investors in the Placement, and the volume weighted average price of Precinct’s shares traded on NZX during the five trading days up to, and including, the Retail Offer closing date. The closing date for Retail Offer applications by eligible shareholders is 2 July 2021.
If the Retail Offer is oversubscribed, applications will be scaled having regard to shareholdings at 5.00pm (NZT) on the record date of 17 June 2021 and otherwise at Precinct’s discretion. The Retail Offer has been designed so that most eligible shareholders will have the ability to preserve their current relative shareholding if they choose to participate. Settlement and allotment of new shares issued under the Retail Offer will take place on 8 July 2021.
Haumi Company Limited (acting in its capacity as the general partner of Haumi (NZ) Limited Partnership, Precinct’s largest shareholder) has made a bid into the Placement with a target of maintaining a shareholding of approximately 15% (following assumed conversion of the PCTHA convertible notes).
New shares to be issued under both the Placement and the Retail Offer will rank equally in all respects with Precinct’s existing ordinary shares on issue.
Please see the links below for details
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