8 Nov 2013

Precinct Properties positive about office markets

7:01 am on 8 November 2013

Precinct Properties says its office building markets are in the best shape for some years.

Chief executive Scott Pritchard told the annual shareholders' meeting the company sees good prospects in both its key Auckland and Wellington markets.

Precinct owns buildings such as the ANZ Centre in Albert Street in Auckland and 1-3 The Terrace, the building which houses The Treasury, in Wellington.

Mr Pritchard says all the property research houses are forecasting strong rental growth in Auckland over the next four to five years.

He says property company CBRE is forecasting total rental growth of about 16% by 2017.

Mr Pritchard says as many as 10,000 new workers have entered central Auckland in the last three years and CBRE expects continued strong growth.

He says Precinct is well-placed to grow and the challenge will be to capitalise on the opportunities within the company's portfolio.

Treating shareholders fairly key in raising capital - chairman

Precinct chairman Craig Stobo told the meeting a key consideration for the board was to treat all shareholders fairly when it decided to raise fresh capital in September.

Precinct's board opted for a placement to institutional investors and a share purchase plan for retail investors.

The company raised $50 million from institutions and a further $12.5 million from retail investors, below the maximum it sought of $20 million.

The Shareholders' Association has been campaigning against this form of raising capital, arguing that a rights issue is much fairer to all shareholders.

Mr Stobo says the cost of issuing that amount of equity through a rights issue would have been significantly higher than the share purchase plan.

Mr Stobo says about a quarter of Precinct's retail shareholders participated in the share purchase plan.