NZX and Media announcement – 18 April 2012
ANZO agreement to buy Bowen Campus
AMP NZ Office Limited (ANZO) (NZX: ANO) announced today that it has entered into a conditional agreement to buy Bowen
Campus in the heart of Wellington’s government precinct.
Confirming the agreement, Scott Pritchard, ANZO’s Chief Executive, said the purchase of the campus, which is made up of
the Bowen State and Charles Fergusson buildings, was an important step for the company in continuing to invest in future
office space requirements in the Wellington CBD.
“We see Bowen Campus as a real opportunity. It is in a highly significant part of central Wellington, and offers an
attractive range of options for meeting continuing demand for quality office space in what is an established location,”
he said.
ANZO will pay Capital Properties (Wellington) Limited, a member of the AMP Capital Property Portfolio, $50.4 million for
the campus.
While the process is well advanced, the agreement is conditional on ANZO board approval by 24 April and approval from
the Overseas Investment Office. The company is approximately 28% overseas owned and 72% owned by more than 7,500 New
Zealand shareholders.
Situated next to the Beehive and Parliament Buildings and encompassing approximately one hectare of land, the property
has 30,000 square metres of net lettable space and an existing resource consent for a total of 60,000 square metres of
office space, providing for potential future redevelopment.
The 10-storey Bowen State Building and the 15-storey Charles Fergusson Tower were built between the early 1960s and
mid-1970s. The property is 92% occupied predominantly by the Ministry of Social Development whose lease runs through to
2015.
Mr Pritchard said the acquisition would provide an opportunity to invest in a strategic asset while maintaining an
acceptable level of risk, with three years secure cash flow, time to consider future options and a relatively low land
and building buy-in rate of $1,400 per square metre (Gross Floor Area).
While the campus buildings were structurally sound they would need substantial reinvestment to modernise them on expiry
of the current leases, he said The company has assessed the feasibility of a range of options for potential
refurbishment or redevelopment based on investment at the end of the current lease terms.
Mr Pritchard noted that in 2011 ANZO sold its Wellington Chews Lane property, and that reinvestment of those proceeds in
this core location is expected to generate stronger returns for shareholders. Other nearby Wellington buildings it owns
include No. 1 and 3 The Terrace and Pastoral House, which it substantially refurbished in 2006 and 2005 respectively.
Mr Pritchard said that the acquisition will be immediately accretive to earnings, but would have minimal impact on 2012
earnings with an expected settlement date of late May.
The purchase price, which is supported by an independent valuation, reflects an initial yield of 10.7% , a valuation cap
rate of 9.9% and represents a 10-year internal rate of return on an “as is” basis of 10.3%.
Following the acquisition ANZO’s weighting to Wellington will increase by 2% to 52%, while ANZO’s occupancy and Weighted
Average Lease Term (WALT) will remain unchanged.
The purchase will be funded through bank debt, with ANZO’s facilities being amended through a new $125 million tranche
expiring in July 2017 and a reduction in the July 2013 expiry of $50 million. Overall the existing $400 million facility
will increase to $475 million.
The acquisition will result in ANZO’s gearing increasing from 22% at 31 December 2011 to 25%.
AMP NZ Office Limited (ANZO) proposed acquisition of Bowen Campus, investment summary:
• Purchase price of $50.4 million, reflecting an initial yield of 10.7%
• Secures a unique and strategic 1 hectare site located next to the Beehive and Parliament Buildings
• The property has 30,000 square metres of net lettable space and existing resource consent for a total of 60,000 square
metres of office space
• Land and building buy-in rate of $1,400 square metres (Gross Floor Area)
• Strong covenant, leased to Ministry of Social Development for three years
About ANZO
ANZO is New Zealand’s only specialist listed investor in premium office buildings. Listed on the New Zealand Exchange,
ANZO is owned by more than 7, 500 investors, has a property portfolio worth $1.25 billion and provides office space to
over 200 businesses. ANZO currently owns 14 office buildings. In Auckland it owns the PricewaterhouseCoopers Tower, ANZ
Centre, SAP Tower, AMP Centre and Zurich House. In Wellington ANZO owns the State Insurance Tower, Vodafone on the Quay,
171 Featherston Street, 125 The Terrace, No. 1 and 3 The Terrace, Pastoral House, Mayfair House, AXA Centre and Deloitte
House.
To find out more visit: www.anzo.co.nz