ASX/NZX Announcement: Acquisition of NPT Limited’s interest in the AA Centre
SKYCITY Entertainment Group Limited (SKC.NZX) (“SKYCITY”) has acquired NPT Limited’s (NPT.NZX) interest in the AA Centre, 99 Albert Street, Auckland for $47 million.
SKYCITY and NPT Limited entered into a conditional agreement on 31 August 2017, and the conditions have now been satisfied.
The acquisition is consistent with SKYCITY’s intention to consolidate control over its Auckland precinct as part of the Auckland master planning being undertaken. The master plan, once completed, will incorporate opportunities for further hotels, apartments, food & beverage outlets, entertainment facilities and office spaces, with the aim of having a cohesive and integrated mixed-use entertainment precinct, and will ensure that SKYCITY leverages the benefits of the increased pedestrian traffic flows anticipated following completion of the City Rail Link.
The AA Centre is a 17 level tower on the corner of Albert and Victoria Streets with connectivity to SKYCITY Auckland via a through-site link (connecting Federal Street and Albert Street).
NPT’s interest in the building includes 15 levels (12,000 m2 ) of commercial office space, ground floor retail, the through-site link and 90 car park spaces. The remainder of the interest in the building (namely 2 levels of office space, additional ground floor retail and a small number of car park spaces) is owned by the New Zealand Automobile Association.
The key terms of the acquisition are as follows:
- Purchase price: $47 million (which represents approximately a 7% yield on the income from the property).
- Deposit: 10% of purchase price paid upon going unconditional.
- Capital expenditure: NPT required to complete certain capital improvements to the building (totalling $2 million) prior to settlement.
- Settlement: 9 months from 12 October 2017 (i.e. 12 July 2018). The acquisition is expected to be marginally earnings accretive for SKYCITY from FY19, and will be funded from existing bank facilities.