Majestic Centre, Wellington's tallest building, is for sale, again
Friday, 18 August 2017
One of Wellington's most prominent office buildings is being placed on the open market, months after another deal fell flat.
Kiwi Property has put the capital's tallest building, the Majestic Centre up for sale, as the property group focuses on developments at Sylvia Park in Auckland.
Built in 1991, the 29-storey building has recently completed an $85 million earthquake strengthening work, after it was deemed to be of moderate risk in assessments in the wake of the Christchurch earthquake.
Kiwi Property has made no secret that it was prepared to sell the building if it found the right buyer, and in December announced plans to sell it as part of a 'strategic partnership' proposal with NPT.
**READ MORE:
* Majestic Centre marked down in Kiwi Property valuations
* Wellington's Majestic Centre, Porirua Mall to sell in Kiwi Property deal with NPT
* Kiwi Property open to sale of Wellington's Majestic Centre and Porirua's North City**
However the deal, which also included North City, Porirua's shopping centre, failed to win shareholder approval.
In a statement, Kiwi Property chief executive Chris Gudgeon said the company had $325m worth of 'development activity underway' at Sylvia Park.
The investment was to be funded by new equity, as well as the proceeds from the sale of the two Wellington properties, Gudgeon said.
'Majestic Centre and North City have … been selected for sale as they are attractive assets with solid fundamentals,' Gudgeon said.
In April, Kiwi Property wrote down the value of the Majestic Centre by $5m to $119.4m. North City is valued at $110.5m.
The combined value of the buildings sits at $229.9 million.
CBRE Wellington managing director Matthew St Amand, said the properties could be bought separately or together.
The owners had also indicated a willingness to retain a stake in the buildings 'allowing purchasers to retain Kiwi Property's management expertise in a partner-ownership model,' St Amand said.
The sale was expected to generate strong interest, as A-grade office buildings in central Wellington, such as the Majestic Centre, were 'hard to come by', he said.
'The market has experienced a notable increase in buyer interest in assets over $50m in the past two years, and there is an emerging trend of maiden investors,' he said.
'With the increased competition for property across the Tasman, there's a noticeable flow of investor interest into New Zealand markets, including Wellington.'
Kiwi Property owns and manages a $3 billion property portfolio, as well as manages about $400m of properties on behalf of third parties.
The listed property fund's retail properties include seven shopping centres and two retail centres, which are home to over 950 tenants, and its office interests include five buildings in Wellington and Auckland.