AMP Office buys Akl Downtown mall for $90M

Westfield Downtown mall in central Auckland, which AMP NZ Office (now named Precinct Properties) has bought for $90m. Photo / Natalie Slade

AMP NZ Office, which is changing its name to Precinct Properties New Zealand, agreed to buy Auckland's Westfield Downtown Shopping Centre from Westfield Group and Westfield Retail Trust for $90 million.

The purchase price is below an independent valuation and is at an initial yield of 7.6 per cent. The property has a weighted average lease term (WALT) of 2.9 years, the company said in a statement

The acquisition would lift annualised earnings by about 3 per cent and allows the property investor to forecast a full-year 2013 dividend of 5.12 cents a share, up 1.6 per cent from 2012..

Westfield Downtown is adjacent to AMP Office's PwC Tower, Zurich House and AMP Centre and "provides the potential to create a more attractive environment through linking buildings and access-ways," said chief executive Scott Pritchard.

The name change to Precinct will be made as of September 28 and reflects "its evolution over 15 years to become New Zealand's only specialist listed owner of premium central city office space."

The purchase will be funded via bank debt as AMP Office has a new $107 million tranche expiring in September 2017 and a $53 million tranche expiring in July 2015. The new facilities increase the total amount to $535 million from $475 million.

The acquisition will lift AMP Office's gearing to 31.5 per cent from 27 per cent at June 30. The conditional purchase is expected to settle in November.