Coronavirus: The $700m Commerical Bay opening delayed again, this time by lockdown
Tuesday, 24 March 2020
Large building owner Precinct Properties is shutting all its buildings and building sites delaying the completion of its much-anticipated $700 million Commercial Bay development in Auckland because of the Government's four-week coronavirus lockdown.
'Following the announcement made by the New Zealand Government that New Zealand has been placed in Covid-19 alert level 3 and it will be rising to level 4 on Wednesday, Precinct Properties New Zealand Limited advises that all of its buildings and construction sites are in the process of being safely and securely closed,' chief executive Scott Pritchard said.
Precinct's buildings and development are in the CBDs of Auckland and Wellington. Commercial Bay on the Auckland waterfront is its biggest and will accommodate more than 100 retailers and thousands of office workers.
'This includes our investment portfolio and both Wynyard Quarter and Commercial Bay in Auckland.
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'All Precinct operated offices in Auckland and Wellington and its Generator business will also be closing until further notice, except to the extent required to allow any businesses conducting 'essential services' to operate.'
Commercial Bay's retail development had been scheduled to open in late March six months after its earlier planned September 2019 opening and the 39,000 square metre new PwC Tower had been scheduled to open in April four months later than the December 2019 planned opening.
The extension to the openings had been due to delays by contractor Fletcher Construction to complete the buildings for which Precinct received liquidated damages of $52m.
'The closure of construction sites will inevitably result in delays to the completion of Commercial Bay and Wynyard Quarter,' Pritchard said.
'While the cost of the delay will depend on the duration of the closure, Commercial Bay is close to completion which will help limit the impact of the interruption.'
Precinct invests and develops in the central city areas of Auckland and Wellington in predominantly premium and A-grade office buildings.
It owns Auckland's PwC Tower, AMP Centre, ANZ Centre (50 per cent), Zurich House, HSBC House, Mason Bros. Building, 12 Madden Street, 10 Madden Street and Commercial Bay; and Wellington's AON Centre, NTT Tower, No. 1 and No. 3 The Terrace, Pastoral House, Mayfair House and Bowen Campus.
Precinct also owns Generator NZ, a leading shared and co-working office space provider. Generator offers 13,600 square metres of space across four locations in Auckland.
The company remained in a strong financial position, Pritchard said. On committed projects its gearing was 31 per cent. Its investment portfolio metrics include occupancy of 99 per cent and a weighted average lease term of around 9 years.
'While the impacts of COVID-19 continue to evolve, we will continue to actively implement our business continuity plans to ensure the right procedures and suitable precautionary measures are in place to help protect the health and well-being of all our people, while also restricting any potential negative impacts on the business.
While the negative impacts from the COVID-19 pandemic could not yet be known and there were 'risks to the downside', Precinct expected the full year 2020 profits to be materially in line with previous guidance and to maintain its dividend at 6.30 cents a share.