Precinct sells SAP tower to Bob Jones for $97m

The SAP building at 151 Queen St in Auckland.

Precinct Properties New Zealand, formerly known as AMP NZ Office, has sold its SAP Tower in Auckland to property mogul Bob Jones for $97 million, $1.4 million above its book value.

The Auckland-based property investor sold the Auckland building to Robert Jones Holdings, a private Wellington-based company owned by knighted New Zealand businessman Bob Jones, the company said in a statement. According to Precinct's annual report the SAP Tower was valued at $95.6 million as at June 30.

The company will use the proceeds to repay bank debt and following the sale, which is expected to settle in February, Precinct will have gearing of around 30 per cent.

Precinct has been divesting non-core assets while expanding its Auckland holdings, including entering into a development agreement for a commercial office at the new Wynyard Quarter. Auckland vacancy in city office buildings is at a 20-year low, as New Zealand's biggest city has benefited from strong population growth, translating to rental demand for businesses.

"Over the past three years we have secured active opportunities at Downtown Shopping Centre and Wynyard Central in Auckland and Bowen Campus in Wellington that will improve the quality of the portfolio," chief executive Scott Pritchard said. "With these progressing well we have begun divesting out of our non-core assets to help fund these opportunities."

Previously, Precinct had been in talks with Quattro, an Australian investor, to buy the SAP Tower as well as its 125 The Terrace building in Wellington, as it looks to list a New Zealand-based property portfolio on the ASX. Today Precinct said the negotiations had ceased.

Shares of Precinct fell 0.4 per cent to $1.125, and have gained 14 per cent since the start of the year.

Read the Precinct statement to the NZX here: