Precinct Properties New Zealand, formerly known as AMP NZ Office, says its newly acquired Bowen Campus site near Wellington's Beehive and parliament has missed on a contract to supply as much as 60,000sq m of office space for government departments.
The listed property investor in April agreed to buy the 10-storey Bowen State and 15-storey Charles Fergusson buildings from Capital Properties (Wellington), a member of the AMP Capital Property Portfolio,for $50.4 million.
The site is 97% occupied, mainly by the Ministry of Social Development on a lease that runs through to at least March 2015.
The ministry is among state agencies involved in the government's Property Management Centre of Expertise, which in August sought proposals from the market for between 50,000 and 60,000sq m of space for delivery between 2014 and 2017 in Wellington.
Other agencies include the Ministry of Health, Crown Law Office and Ministry of Business, Innovation and Employment.
"The announcement by PMCOE is a disappointing outcome for Precinct," says Scott Pritchard, Precinct's chief executive. "However, we remain very confident in the potential of this site to provide government accommodation in the heart of the parliamentary precinct at Bowen Campus."
Shares of Precinct fell about 2% to $1. They have gained 24% this year. The stock is rated a "hold" based on the consensus of six recommendations compiled by Reuters, with a median price target of 91 cents.