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AMP Capital sells to RJI

The Forsyth Barr and Bayleys Towers in central Wellington have been sold for $50.5 million to Robt Jones Holdings.

This makes Robt Jones Holdings undisputably the largest commercial property owner in the Wellington CBD, according to CBRE, which brokered the deal.

The vendor was AMP Capital Property Portfolio.

The sale campaign attracted six offers from investment groups based in Wellington and Auckland, say CBRE agents Ryan Johnson, Brent McGregor and Mark Hansen.

RJH Wellington manager Sam Cooper says in a prepared statement the purchase reflects the company’s positive attitude towards Wellington and the city’s future prospects.

He scotched notions that Wellington is in danger of becoming an economic backwater as “silly in the extreme”.

“It is certainly inconsistent with our own experience as the CBD’s largest building owner, given the steady demand we encounter for quality office space.”

The RJH acquisition involves three buildings at 165–177 Lambton Quay. They have a seismic rating of 100% and secure tenancy arrangements.

The assets comprise the Forsyth Barr & Bayleys Towers and three-level housing department store Kirkcaldie & Stains.

Robt Jones now owns 14 CBD properties, with eight on Lambton Quay.

CBRE Wellington managing director Ryan Johnson says the strength of interest in the campaign highlights demand for prime Wellington buildings in strategic locations.

“The combination of this and another sizeable, $50 million-plus transaction recently finalised in the CBD is a real tick of confidence in the Wellington market,” Mr Johnson says.

The properties include retail spaces of 6617sq m and combined office space in the two towers of more than 9500sq m.

Based on the current net income of $4,434,546 a year, the sale to RJH was negotiated at an initial yield of 8.78%. The weighted average lease expiry is 9.8 years.

More by Chris Hutching for NBR NZ Property Investor