Wellington Scoop

Owners to spend $35m strengthening Majestic Tower – classified as “moderate” earthquake risk

The owners of the 28-storey Majestic Tower on the corner of Willis Street and Manners announced yesterday that they’re to spend $35m to strengthen it. The announcement is included in the the Trust’s six-monthly financial report. It says its decision to strengthen the high-rise building comes as a result of a recently completed seismic evaluation. A seismic survey has shown that the building has been categorised as a “moderate risk” for earthquake damage.

Press release from Kiwi Income Property Trust – November 16
Kiwi Income Property Trust today announced its interim result for the six months ended 30 September 2011, delivering a distributable profit after tax of $36.0 million, up 9.1% on the previous comparable period. Unit Holders will receive an interim cash distribution of 3.50 cents per unit, in line with guidance.

In another active period for the Trust, key operating highlights included:

• operating profit before tax of $41.2 million, up 14.1% on the previous comparable period, driven by the recent acquisition of LynnMall Shopping Centre in Auckland

• lodgement of an insurance claim for the earthquake-damaged PricewaterhouseCoopers Centre in Christchurch and confirmation that it is to be demolished
• the divestment of two non-core assets at a combined sale price of $8.4 million
• solid progress on the ASB head office development at Wynyard Quarter
• the completion of the new foodcourt and dining lane development at Centre Place Shopping Centre in Hamilton
• strong sales performance at Northlands Shopping Centre in Christchurch post the earthquake events
• the execution of 92 new leases and renewals covering more than 14,000 sqm of space, and
• 341 rent reviews resulting in an average 4.5% rental uplift for those leases.

Looking ahead, the Trust is pleased to announce a $39.9 million redevelopment of Centre Place Shopping Centre in Hamilton to reposition it as a competitive CBD specialty centre, anchored by a new 7,000 sqm Farmers department store.

The Trust is also announcing today its intention to undertake strengthening works to the Majestic Centre, in response to a recently completed seismic evaluation, at an estimated cost of $35 million….

….Following the Canterbury earthquakes, the Trust has completed a seismic review of its core office portfolio. A detailed seismic assessment by structural engineers, Holmes Consulting Group, has identified that The Majestic Centre is a „moderate risk’ building using the New Zealand Society for Earthquake Engineering (NZSEE) system for grading buildings according to their assessed structural performance. The Manager’s intention is to proceed to strengthen the building so as to secure a „low risk’ NZSEE classification for the building, at an estimated cost of $35 million. Pending completion of the strengthening work, the investment property carrying value of this asset has been written down by $35 million as at 30 September 2011.

Strengthening work will commence as soon as practicably possible, following completion of design, consents and other preparatory works. The Manager will work closely with tenants to ensure that disruption is minimised during the upgrade works, the bulk of which are expected to be completed within 18 months.

The full release is here.