Precinct says its Commercial Bay contract protects it from Fletcher delays
Friday, 16 August 2019
Precinct Properties is confident its construction contract protects it from losses due to delays by Fletcher Building on the Commercial Bay development in Auckland.
The delays have increased the project's cost by $10 million to $700m and Precinct was working with retailers and tenants to minimise disruption, its chief executive Scott Pritchard said when revealing the annual profit of one of New Zealand largest property companies.
Pritchard confirmed the extended 2020 completion date for Commercial Bay, and he also announced construction would begin in 12 months on a new building at Bowen Campus in Wellington.
The second stage of Commercial Bay called One Queen Street is scheduled to begin in 2020 and will create a mixed-use community in central Auckland.
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Retailers have committed to leasing 95 per cent of the Commercial Bay retail areas, with 82 per cent commitment for the office tower.
Precinct recently purchased a company called Generator to extend its commercial presence beyond traditional offices, and says it now controls about two thirds of Auckland's co-working space.
Pritchard said he expected more demand for co-working spaces in Auckland and Wellington.
During recent months the company sold a half interest in the ANZ Centre in Auckland for $181m, to a fund controlled by Invesco, and sold 10 Brandon St in Wellington.
Pastoral House in Wellington was under contract for sale as the buyer carried out due diligence.
The second stage of Wynyard Quarter, 10 Madden St, was under construction and on budget for completion at the end of 2020.
Tenants including Media Design School have committed to 62 per cent of the space.
At Bowen Campus in Wellington, the company completed the Charles Ferguson Building. At Defence House, formerly Bowen State Building, base build works are complete with the fitout under way.
Precinct is in talks with potential occupiers for 40-44 Bowen St where design work is complete ahead of expected construction beginning in the next 12 months.
An increase in the value of properties contributed to income after-tax of $190m, albeit lower than last year's $254m after a stronger revaluation gain .
Net operating income for the year ending June 2019, adjusted for special items, was up 3.7 per cent to $79.4m.
Precinct's properties were valued at $2.8 billion.