Precinct sells Wellington building for $36.1m, affirms 2015 earnings
Precinct sold 80 The Terrace, valued at $37.1 million as at December 31.
Precinct Properties NZ [NZX: PCT], which raised $174.1 million in March to help fund major developments, sold a Wellington building in the central business district for $36.1 million, just below book value, and has affirmed its earnings forecast for the 2015 financial year.
Auckland-based Precinct sold 80 The Terrace, valued at $37.1 million as at December 31, to an unidentified private investor, and will use the proceeds to repay bank debt, which will trim its bank gearing ratio to about 18%, it said in a statement. As at March 31, Precinct's gearing ratio was at 19.1%.
"Following the departure of major occupier Axa in 2013, the building was largely vacant," chief executive Scott Pritchard said. "At that time we committed to upgrade the office levels and the lobby and have since completed 6000 square metres of new leasing, increasing occupancy from 40% in early 2014 to 100% now. This has enabled us to achieve the sale outcome announced today."
In February, the company said short-term earnings may be hit by efforts to trim debt but that a higher-quality portfolio would deliver strong results over a longer period.
The sale is Precinct's latest bid to shrink its property footprint in Wellington and expand its presence in Auckland, where it sees wider growth opportunities. As at March 31, Precinct's weighting to Auckland was 58% by value.
Separately, Precinct affirmed annual earnings guidance of about 6.1c per share before performance fees, and an annual dividend payout of 5.4c per share.
Precinct's board declared a third-quarter dividend of 1.35c per share, plus imputation credits of 0.3754c, payable on June 4.
As at March 31, the company's total assets were valued at $1.66 billion, and its portfolio had a 98% occupancy rate with a 5.1 year weighted average lease term.
The shares fell 1.3% to $1.105 and have declined 5.2% this year. The stock is rated an average 'hold', based on six analyst recommendations compiled by Reuters, with a mean target price of $1.15.
(BusinessDesk)
Paul McBeth
Tue, 02 Jun 2015
Tue, 02 Jun 2015
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Precinct sells Wellington building for $36.1m, affirms 2015 earnings
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