Precinct lifts forecast after buying mall for $90m

JAZIAL CROSSLEY
Last updated 05:00 09/11/2012

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Listed commercial property owner and developer Precinct Properties has increased its guidance for the 2013 financial year after its purchase of an Auckland mall and increasing its overall occupancy.

The company was known as AMP NZ Office until it changed its name in September. Earlier in the year it told shareholders it expected full-year earnings to be 5.7c a share before performance fees for the year ending June 2013.

At its annual meeting in Wellington yesterday, chief executive Scott Pritchard told shareholders they could now expect a dividend of about 5.12c a share.

"In the last year we have leased, extended or renewed around 16 per cent of the portfolio," Pritchard said, with occupancy now at 94 per cent up from 90 per cent two years ago.

ANZ recently committed to four floors at its 171 Featherston St property on a 12-year term, with naming rights.

"One key factor driving this growth has been the improved operating market in Auckland, also helped by the continued flight to quality here in Wellington."

In the past year in Wellington, Precinct has sold Chews Lane, using the capital to upgrade Bowen House at a cost of $50.4m.

Pritchard said it was in talks with a government tenant which was looking at leasing about 60,000 square metres in the development.

The Social Development Ministry is the site's main tenant, spending $5.39m in rent a year.

Precinct spent $90 million buying a downtown shopping centre in Auckland in a deal that was settled last month. The property sits strategically between several of its existing properties, including Zurich House, PWC Tower, ANZ Centre and AMP Centre.

The council in Auckland is looking at building a rail link that would run directly underneath the site, which appealed to Precinct for its proximity to existing public transport including the nearby ferry building, bus terminal and Britomart train station.

It sees the site as a potential place for future office development, with retail a low priority but likely to remain at ground levels.

Precinct recently secured a new $125m tranche of bank funding expiring in 2017, taking its total gearing to 31.5 per cent, which it said was well within its 50 per cent allowance.

Its new name had been well-received by the market. Chairman Craig Stobo said he personally liked it a lot. "It signals more clearly that we are an independently run company . . . We wanted to help address confusion between ourselves and [50 per cent shareholder] AMP."

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- The Dominion Post

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