close
1 mins to read

NZ Post pays $12m to amend lease with Argosy

The state-owned enterprise has signed a 10-year lease over all but the top three floors of the building.

Edwin Mitson
Fri, 08 Apr 2016

New Zealand Post will pay $12 million to Argosy Property [NZX: ARG] after the state-owned mail delivery service's shrinking business meant it didn't need the top three floors of Wellington's NZ Post House.

The Wellington-based state-owned enterprise has signed a 10-year lease over all but the top three floors of the building, replacing what would have been a five-year tenancy agreement for the entire property, Argosy said in a statement. NZ Post's payment is made up of a $6 million charge for the termination of the lease of the top three floors, and a $6 million reduction on the $60 million sale of the building to Argosy in 2013.

"The remaining upgrade work to the building has been revised as a result of NZ Post's changed accommodation requirements," Argosy said. "Given the strength of the current market, we don't expect that the period to re-lease this space will be prolonged."

Last November Argosy said its $40 million upgrade on the building had stalled due to NZ Post's reduced need for floor space, and the property investor today said it has signed a new $13 million agreement with Hawkins Construction NI to improve lifts, stairwells, toilets and other associated services.

Argosy's shares fell 0.8% to $1.175 and have gained 3.5% this year.

(BusinessDesk)

Edwin Mitson
Fri, 08 Apr 2016
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
NZ Post pays $12m to amend lease with Argosy
57142