18 Jun 2021

Precinct Properties to buy Wellington's Bowen House, Freyberg Building

12:42 pm on 18 June 2021

Property investor and developer Precinct Properties is to raise $250 million to buy two major Wellington properties and reduce debt.

Bowen House

Property investor and developer Precinct Properties has agreed to buy Bowen House (to left of the Beehive). Photo: Supplied / Incredible Images

The company has agreed to buy Bowen House and is currently doing due diligence on acquiring the Freyberg Building, both of which are close to parliament and have housed government departments.

"The Wellington market continues to show strong demand for prime grade office, underpinned by an increase in the public sector workforce. We are seeing solid rental growth and very low levels of prime vacancy," chief executive Scott Pritchard said.

Bowen House accommodated MPs and staff until it was recently vacated. Precinct was to pay $92m for the building and would spend another $57m on refurbishing the building, after which the parliamentary service would lease the building for 15 years.

Precinct has agreed broad terms for acquiring the nearby Freyberg Building, which also houses government departments.

"On completion of the acquisition, Precinct anticipates progressing with design for the redevelopment while benefiting from holding income."

The company will issue new shares at $1.51 each, a 5 percent discount to Precinct's last traded price. Major investors will be offered $220m worth and $30m has been reserved for current shareholders.

The balance of the capital raising would be used to reduce the company's debt levels, giving it headroom for further developments.

Precinct's major shareholder, Haumi, planned to buy shares to maintain its 15 percent holding.

Precinct has a broad range of office and retail buildings in Auckland and Wellington, including the recently completed Commercial Bay development on Auckland's waterfront.