Precinct commits to $100m 44 Bowen Street

Precinct Properties New Zealand is pleased to announce today it will be committing to 44 Bowen Street, the second office building of the Bowen Campus Stage Two development in Wellington. The project will be undertaken on a pre-committed basis with leasing to KPMG secured across two floors or 25% of office space on a 15-year term. Taking into account the existing pre-commitments from EY, Fujitsu and Generator at 40 Bowen Street, the aggregate pre-commit across Bowen Campus Stage 2 totals 10,000sqm, around 50% of the combined office space.

44 Bowen Street will occupy the western portion of the site on land formerly occupied by the Charles Fergusson Annex building which was demolished during the redevelopment of Bowen Campus Stage 1. The new building will provide for eight levels of office accommodation totaling approximately 11,549m2 of office NLA including the ground floor. Including 40 Bowen Street, the development provides a total of around 21,000sqm of office space. In addition to office accommodation, both buildings will provide a small amount of retail/F&B as well as storage, end of trip facilities and bike parks. Both buildings will be 5 Star Green Star rated and will share a common entrance lobby and basement facilities including carparking. The total project cost for 40 & 44 Bowen Street is expected to be around $195m and is expected to yield 6.6% once fully leased.

Scott Pritchard, Precinct’s Chief Executive said, “We are very pleased to be welcoming KPMG into Precinct’s portfolio and commencing 44 Bowen Street. Securing another high-quality corporate occupier reinforces the demand for this location and for quality office space in the Wellington City Centre. With leasing enquiry remaining elevated in the Wellington market we expect both buildings to be fully leased prior to completion.”

Precinct notes that there has been considerable commentary around the impact on the demand for city centre office space from COVID and working from home. Across the Auckland and Wellington portfolios Precinct has continued to experience solid demand with 10,000sqm of leasing transactions concluded across both markets since 30 June. No further clients have notified Precinct of an intent to reduce floor space and the majority of occupiers have now returned to their offices.

Precinct is also pleased to advise that shareholders will receive a first-quarter dividend of 1.625 cents per share plus imputation credits of 0.003223 cents per share. Offshore investors will receive an additional supplementary dividend of 0.001463 cents per share to offset non-resident withholding tax (see Note 1). The record date is 26 November 2020 and payment will be made on 10 December 2020. See Note 2 for Inland Revenue Department (IRD) change in relation to listed PIE income.

In addition, and despite the high level of uncertainty within the New Zealand economy, Precinct remains confident its strategy, supported by high occupancy levels, a long weighted average lease term and high quality clients, will continue to deliver returns for shareholders and reaffirms its dividend guidance of 6.50cps for FY21 reflecting an increase of 3.2% over the FY20 period.