The Majestic Centre, Wellington's tallest building, sold to South Africa's Investec

Tuesday, 14 November 2017

Wellington's Majestic Tower stands firm again after an $83.5m seismic upgrade.

Wellington's tallest building, the Majestic Centre, has been sold to a subsidiary of a major South African investment bank for more than $123 million.

Kiwi Property, the largest property company listed on the NZX, have struck a deal with Investec Australia Property Fund, which is owned by Investec.

Headquartered in Sandton in Johannesburg, Investec is a significant investment bank and asset manager, which has long been the sponsor of Super Rugby. The purchase is believed to be the company's first investment in New Zealand's commercial property market.

The Majestic Centre has been sold to Investec Australia Property Fund.

The deal, brokered by Matthew St Amand and Bill Leckie, of CBRE, is the biggest single office property sale in Wellington in the past 10 years.

As part of the $123.2m sale arrangement, Kiwi Property has been appointed manager of the building, which has been the subject of one of the country's largest seismic upgrade projects.

Kiwi Property chief executive Chris Gudgeon said proceeds from the sale, which was due to settle next month, would be used to pay down debt, providing further flexibility for the company to invest in line with its strategy.

St Amand said interest in The Majestic Centre was very strong, because of the extensive seismic upgrade and management of the building.

Built in 1991, the 29-storey building has recently completed an $85m earthquake strengthening project, having been 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.

However, the deal, which also included North City, Porirua's shopping centre, failed to win shareholder approval. As a result, the deal fell through.

In August, both properties were put on the market again.

In April, Kiwi Property wrote down the value of the Majestic Centre by $5m to $119.4m. North City is valued at $110.5m.

Kiwi Property has been around for more than 20 years. It owns and manages $3 billion of real estate, including shopping centres and prime office buildings.