Half of Auckland's PWC Tower to sell, valued at $600m

Precinct Properties is selling 50 percent of the PWC Tower in Auckland's Commercial Bay, valuing the office tower at $600 million.

Precinct chief executive Scott Pritchard said the $300m investment by Hong Kong-based global investment firm PAG (formerly Pacific Alliance Group) will strengthen Precinct's balance sheet ahead of some major investment projects, including the redevelopment of the Downtown Carpark building on the Auckland waterfront.

"This transaction retains Precinct's ownership of a significant stake in a premium asset while further positioning our balance sheet to progress future opportunities as market conditions allow," Pritchard said.

PwC Tower was completed in 2020 as the first stage of the Commercial Bay mixed retail development.

The details

Precinct will be the investment and asset manager on behalf of the new partnership with a market fee arrangement in place. The transaction was conditional on Overseas Investment Office (OIO) approval with settlement expected by the end of December.

However, the final price would be determined in 18 months' time, post the initial settlement, as part of a price adjustment mechanism.

"The adjustment mechanism is linked to the five-year swap rate and may reduce the effective sale price, subject to a cap," Pritchard said, adding the effective sale price was expected to be within 5 percent of book value.

"The transaction is highly consistent with our strategy to recycle capital and grow capital partnerships, and demonstrates Precinct's ability to continue to execute on its strategy through challenging global market conditions."

Auckland Downtown Carpark redevelopment update

Pritchard said Precinct was making progress on the development of the large carpark building on the waterfront, with the appointment of an experienced Sydney-based high-rise construction firm, Built, to undertake work as an early-stage contractor, which was expected to continue until next April.

Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.