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Kiwi Property to buy half of The Base

NZ NewswireNZ Newswire 7/04/2016 Jonathan Underhill

Kiwi Property Group has agreed to buy 50 per cent of Hamilton's The Base shopping centre.

New Zealand's biggest listed property investor by market value will pay Tainui Group Holdings $192.5 million for the stake of the mall at Te Rapa and has offered $197.5 million for the balance.

Waikato-Tainui will consider the offer for the remaining half share in coming weeks, Kiwi Property said in a statement.

The purchase of the initial 50 per cent stake includes about 6.7 hectares of vacant land suitable for development, it said.

Under the terms of the deal, Kiwi Property will buy a half stake in the 120-year ground lease over the land, for which rents are prepaid, while Tainui will retain freehold title.

If Tainui elects not to accept the offer for the remaining half stake, it can still require Kiwi Property to buy it between 2018 and 2021 based on an independent valuation, the company said.

Kiwi Property will fund the acquisition via a new bank facility.

"Although the acquisition of The Base will be initially funded through bank debt, we expect to reduce gearing following the sale of a number of non-core assets over the next two years as part of our ongoing asset recycling programme," chief executive Chris Gudgeon said.

While the acquisition of the initial half stake is unconditional, buying the rest will depend on the decision of Tainui's tribal parliament and the tribe's executive committee. The offer closes on May 17.

The deal comes four months after Kiwi Property announced the sale of the southern part of its recently developed downtown Hamilton Centre Place South shopping centre to an undisclosed local buyer for $46.7m.

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