9 Nov 2012

Precinct to rebalance porfolio towards Auckland

10:22 pm on 9 November 2012

Precinct Properties, a commercial office property investor, says it is looking to rebalance its portfolio over time to have more exposure to the Auckland market.

The company says business sentiment across its Auckland and Wellington portfolio is split between growing confidence and indecision.

It says its occupancy rate traditionally sits at 96% or higher, but was 94% in the last year and the company aims to improve that by remaining close to its clients and putting the ground work in when leases come up.

It says there are concerns in Wellington about the seismic strength in the buildings, while Auckland's business confidence is growing.

Chief executive Scott Pritchard says the acquisitions of Bowen Campus in Wellington and the Downtown Shopping Centre in Auckland have locked in future growth potential, with both sites having resource consent for expansion.

He says commercial building consent numbers in Auckland are very high, possibly at 2004 levels and leasing inquiries there are continuing.

Mr Pritchard says Auckland is likely to outperform Wellington at a macro-economic level in the next five to 10 years.

But he says Precinct will retain a large holding in Wellington because its property market is underpinned by Government and the size of the city is constrained because it's surrounded by hills which makes it a very investable market.

The Government makes up 28% of the company's portfolio in both Wellington and Auckland.

The company expects its net operating income after tax to be 5.8 cents per share before performance fees.

It is anticipating an increase on the 2012 dividend to around 5.12 cents per share for the 2013 financial year.