New Investment Partnership Established with GIC
23 February 2022
Precinct has recently announced it has conditionally established a new strategic investment partnership with Singapore sovereign wealth fund GIC. The partnership will initially acquire five assets from Precinct’s existing portfolio totaling around $590 million, comprising 3 Wellington and 2 Auckland assets, with the ability to grow to around $1.0 billion. Precinct will own a minority 24.9% interest in the partnership.
The establishment of the real estate investment partnership reflects a strategic next stage following the internalisation of Precinct last year. Accessing third party capital supports the advancement of Precinct’s long-term strategy, enabling Precinct to participate in a broader set of opportunities, both on and off balance sheet. This strategic decision to establish this platform increases Precinct’s liquidity and strengthens its balance sheet, provides diversification of capital sources and is expected to enhance earnings to deliver further long-term value to Precinct’s shareholders.
Scott Pritchard, Precinct’s CEO, said “Establishing a new collaborative and committed partnership with a global investor of this scale and quality represents a strategic step forward for our business. The partnership with GIC provides access to capital with an aligned partner and fully supports the execution of Precinct’s future growth, further enhancing shareholder returns. We are leveraging our well-located premium assets, experienced team and Precinct’s unique market position. The newly established partnership will target stable, secure low risk returns through investment in well-leased, premium grade real estate. We are very excited about this investment opportunity and to be partnering with a globally recognised long-term strategic partner like GIC”.
Precinct will be the investment manager of the partnership and there is a market fee arrangement in place for the funds and property management of the assets. Proceeds from the asset sales of the seed portfolio will initially repay bank debt and provide funding for future growth.
The disposals to the partnership remain conditional at this stage on the completion of due diligence, Overseas Investment Office approval and certain subdivision consents in the initial portfolio. We continue to progress these items and will provide a further update in due course.