Kiwi Property plans to sell Vero Centre to Hong Kong business for $458m

Auckland's Vero Centre on Shortland St is being sold by Kiwi Property. Photo / David White

NZX-listed real estate investor Kiwi Property Group is planning to sell its 38-level 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 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 re-invested 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 value-creating moves like that town centre development,” he said.

Kiwi said today 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 this morning.

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 St 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.

For many years, Vero has been regarded as New Zealand’s top office tower due to its height, amenities, location and number of blue-chip tenants.

Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.