Commercial landlord and developer Precinct Properties says it has agreed to sell a half share in its PwC tower in downtown Auckland and form a new investment partnership with global investor PAG.
The deal, valued at $600 million, will see Precinct retain ownership of a significant stake in the building while also being the investment and asset manager for a market fee.
Precinct said the transaction was consistent with its strategy of recycling capital and growing capital partnerships.
The deal includes an equity consideration deferred for 18 months post settlement and subject to a price adjustment mechanism linked to the five-year interest rate swap rate. Precinct said the effective sale price was expected to be within 5% of book value.
The deal is still conditional on Overseas Investment Office approval, with settlement expected in the first half of the 2027 financial year.
Precinct said the proceeds will be used to repay bank debt, reducing its pro forma gearing to 24% by the end of 2025.
The company also provided an update on its Downtown project, stating that it is progressing work to support a development commitment decision.
It has partnered with Australian contractor Built for the early contractor involvement phase, which is expected to continue until April 2027.
Precinct is one of the largest NZX-listed landlords, with a $2 billion market cap. The company posted after-tax net profit of $2.9m in the December half-year, with funds from operations dipping to $53.8m from $55m.
The company is advancing its 56-level Downtown Carpark redevelopment near Auckland’s waterfront, with the project going through the Government’s fast-track consenting pathway.
A substantive resource consent application was lodged under the pathway in the period, and resource consent uplift is anticipated in the next six months.
Precinct has a target of $4b to $5b of capital partnerships during the next three to five years, having transformed lately from a solely commercial developer to a solely residential developer.
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