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NZ Post pays $12m to amend lease

NZ NewswireNZ Newswire 8/04/2016 Edwin Mitson

New Zealand Post will pay $12 million to Argosy Property after the state-owned mail delivery service's shrinking business meant it didn't need the top three floors of Wellington's New Zealand Post House.

The Wellington-based state-owned enterprise has signed a 10-year lease over all but the top three floors of the building, replacing what would have been a five-year tenancy agreement for the entire property, Argosy said in a statement.

NZ Post's payment is made up of a $6m charge for the termination of the lease of the top three floors, and a $6m reduction on the $60m sale of the building to Argosy in 2013.

"The remaining upgrade work to the building has been revised as a result of NZ Post's changed accommodation requirements," Argosy said. "Given the strength of the current market, we don't expect that the period to re-lease this space will be prolonged."

Last November Argosy said its $40m upgrade on the building had stalled due to NZ Post's reduced need for floor space, and the property investor said it has signed a new $13m agreement with Hawkins Construction NI to improve lifts, stairwells, toilets and other associated services.

Argosy's shares fell 0.8 per cent to $1.175 and have gained 3.5 per cent this year.

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