Precinct upbeat about Auckland, prefers government over corporate space in Wellington

Precinct Properties chief executive Scott Pritchard

Precinct Properties New Zealand is upbeat about its tilt toward Auckland, where it sees downtown real estate underpinned by an expanding population, while in Wellington it prefers government tenancies over corporates.

Chief executive Scott Pritchard told shareholders at today's annual meeting in Auckland that significant building work and a swelling population in the country's biggest city provided a number of opportunities for the property investor.

"Auckland office vacancies are at historic lows and we see demand continuing to stay high, with restricted land supply and construction price inflation keeping space at a premium," Mr Pritchard said in speech notes published on the NZX. "The Auckland CBD retail environment has strengthened considerably over the past few years driven by strong demand from international and local retailers, improvement in dining and entertainment precincts and strong growth in tourism numbers."

Precinct has increased its portfolio weighting in Auckland over recent years and has two major developments – the Wynyard Quarter and Commercial Bay – under way in the country's commercial hub. By value, about 69% of its $1.46 billion portfolio is in the country's biggest city, and its corporate exposure in Wellington has reduced to just 11%, with the Bowen Campus upgrade in the capital city almost fully leased to the Crown.

"The reduced 11% weighting in Wellington corporate assets reflects challenges in that market, while we remain in a good position serving the government market," Mr Pritchard said.

Earlier this week Precinct said its Wellington portfolio came through the 7.8 magnitude earthquake near Kaikoura relatively unscathed, and chairman Craig Stobo today said its Deloitte House property was the only building not yet cleared for occupation and re-occupied.

"The initial assessment for Deloitte House at 10 Brandon St indicates there has been some damage to building services and fitouts within this building, and further assessments are being undertaken over the next two weeks," Mr Stobo said.

Stobo confirmed a first-quarter dividend of 1.4c per share and affirmed expectations for an annual return of 5.6c.

The shares rose 0.4% to $1.22, having declined 2.8% so far this year.

(BusinessDesk)


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Lets be blunt!
Wellington is a fishing village at the bottom of the NI.
As a centre of govt it fails the resilience test because WGTN is more isolated than Kaikoura after an "alpine fault event"
Everything beyond Lambton Quay may become flooded after a real shake directly under WGTN .
Or it could rise 1 metre?????
Everyone in WGTN is ignoring the simple facts, IPENZ, local GOVT and central govt because of the snouts in the trough.

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Of course, Precinct would prefer government over corporate tenancies: because when it comes to negotiating the lease, they know they will be dealing with bureaucrats who are anxious about concluding the cost-and-terms of the lease, lest it cuts into their morning-tea/lunch/ afternoon tea break or home time.

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The Government has ignored the Banking restrictions preventing the Unitary plan in Auckland.

The Australian Banks have shut up shop with mortgage lending. The Reserve banks devastating 40% LVR has killed any hope for developers to build housing as there is no buyer demand.

With no buyer demand developers will not risk starting projects on top of a major problem with impossible mortgage restrictions.

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