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Precinct upbeat about portfolio prospects

NZ Newswire logoNZ Newswire 16/11/2016 Paul McBeth

Precinct Properties New Zealand is upbeat about its tilt towards Auckland, where it sees downtown real estate underpinned by an expanding population, while in Wellington it prefers government tenancies over corporates.

Chief executive Scott Pritchard told shareholders at Thursday's annual meeting in Auckland that significant building work and a swelling population in the country's biggest city provided a number of opportunities for the property investor.

"Auckland office vacancies are at historic lows and we see demand continuing to stay high, with restricted land supply and construction price inflation keeping space at a premium," Pritchard said.

"The Auckland CBD retail environment has strengthened considerably over the past few years driven by strong demand from international and local retailers, improvement in dining and entertainment precincts and strong growth in tourism numbers."

Precinct has increased its portfolio weighting in Auckland over recent years and has two major developments - the Wynyard Quarter and Commercial Bay - underway in the country's commercial hub.

By value, about 69 per cent of its $1.46 billion portfolio is in the country's biggest city, and its corporate exposure in Wellington has reduced to just 11 per cent.

Earlier this week Precinct said its Wellington portfolio came through the 7.8 magnitude earthquake near Kaikoura relatively unscathed, and chairman Craig Stobo on Thursday said its Deloitte House property was the only building not yet cleared for occupation and re-occupied.

Stobo confirmed a first-quarter dividend of 1.4 cents per share, and affirmed expectations for an annual return of 5.6 cents.

The shares rose 0.4 per cent to $1.22, having declined 2.8 per cent so far this year.

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