Precinct Properties New Zealand, formerly AMP NZ Office, has agreed to buy HSBC Tower at the bottom of Auckland's Queen St for $103 million, and plans to run the ruler over its existing funding options.
The deal is subject to board approval and the completion of due diligence, and Overseas Investment Office sign-off, the property investor said in a statement. The purchase price represents an initial yield of 7.7 per cent. Settlement is scheduled in five months, and the Precinct board will use that time to review all funding options, including debt, equity and the sale of non-core assets.
"The board will seek to balance considerations of portfolio optimisation, earnings, growth and maintaining an appropriately geared balance sheet," the company said.
The building was put on the market in October last year by Kerry Knight and Chong du Cheng's Equinox Capital and two other investment partners. The sale was to let the owners shift capital to new development projects.
The 21-storey tower is 88 per cent occupied with a weighted average lease term of about four years, and the sellers will provide a six month underwrite for 2,300 square metres of vacant space.
