Vero sale plan in $458m deal with an overseas buyer
This transaction is an excellent example of our capital recycling programme in action.
NZX-listed real estate investor Kiwi Property Group is planning to sell its Auckland office tower the Vero Centre to a Hong Kong China-based conglomerate for $458 million, nearly 2 per cent below its valuation last September.
Clive Mackenzie, Kiwi’s chief executive, said: “The Vero Centre has been a prominent feature of our office portfolio for over 20 years. However, it is no longer core to strategy, given the company’s focus on creating retail-led mixed-use centres.
“This transaction is an excellent example of our capital recycling programme in action, enabling us to reduce gearing and unlock a range of new value-creation opportunities. Once settled, the funds raised from the sale of the Vero Centre will be used to repay bank debt and then reinvested into other initiatives.”
One investor praised the conditional deal, saying it would free up capital for Kiwi to develop other projects including its huge Drury scheme for an entirely new town centre with houses, shops, potentially a hospital and businesses. “The Vero sale will support higher valuecreating moves like that town centre development,” he said.
Kiwi said yesterday that Overseas Investment Office approval is needed to allow the sale of the building at 48 Shortland St. The sale price is 1.9 per cent below last year’s valuation, Kiwi told the stock exchange yesterday. Kiwi did not name the buyer.
The business lost Bell Gully to Precinct Property’s One Queen or Deloitte Centre on the corner of Quay Street and Queen St recently.
Kiwi developed the centre in 2001 and says it produces annual rent of $25.4m, is 98.5 per cent occupied and is a premium-grade building. It was last refurbished in 2016 and has 39,718sq m of net lettable area as well as 417 car parks. Floor plates are 1200sq m and the tower has extensive harbour and city views. Leases have an average least expiry term of 3.9 years.
Vero has been regarded as New Zealand’s top office tower due to its height, amenities, location and number of blue-chip tenants.
Clive Mackenzie