Precinct plans $681 mln development in downtown Auckland

Friday 11th December 2015

Precinct Properties New Zealand, which raised $174.1 million in March to help fund major developments, will go ahead with a planned $681 million development in downtown Auckland, including a 39 storey waterfront office tower and retail centre, using funds from a newly established banking facility.

The Auckland based company's development will encompass Precinct's four buildings in the surrounding area, which it anticipates will be worth about $1.5 billion on completion and represent 63 percent of the property investor's portfolio, it said in a statement. Precinct acquired the downtown site for $91.3 million, has spent $16.3 million in design and consulting fees, and expects to spend a further $573.4 million building the project it' dubbed Commercial Bay.

Accounting firm PwC will be the anchor tenant for the office tower, which has 52 percent pre-commitment with four other businesses as foundation clients, Precinct said. Retail leasing has started, and the company said it's in talks with a number of potential tenants for the flagship stores.

"The Commercial Bay project is consistent with the company's long term strategy of maximising value through concentrated ownership of prime assets in strategic locations," chief executive Scott Pritchard said.

Precinct has been shifting its portfolio to Auckland, including a development in the city's Wynyard quarter.

Fletcher Building has been hired for the Commercial Bay development, with work expected to start in June next year, including construction of tunnels under the precinct for the city's rail link.

The retail centre is expected to open by October 2018, with the office tower completed by mid-2019.

The company's Auckland Wynyard and Commercial Bay developments will increase its gearing to about 35 percent from 12.5 percent at present.

Precinct shares gained 0.4 percent to $1.255, and have advanced 5.9 percent this year.

BusinessDesk.co.nz

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