Commercial Bay Programme Update

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494
2267
NZX announcement – 29 May 2019
Commercial Bay Programme Update
Precinct Properties New Zealand Limited (Precinct) (NZX: PCT) announces today that following
a detailed independent review of the construction programme for Commercial Bay, the
previously disclosed targeted opening dates have now been revised to March 2020 for the
retail centre and April 2020 for the new PwC Tower. The revised targeted opening dates are
due to observed delays in construction progress by the main contractor, Fletcher
Construction, across both the Tower and retail centre components.
Due to this revision the forecasted total project cost is now expected to be between $690 million
and $700 million with the potential increase of up to $10 million reflecting the cost of delays to
opening. The yield on cost is expected to remain largely unchanged in a range of 7.4% to 7.5%,
ensuring that the development remains on track to deliver the expected benefits to Precinct’s
long-term earnings.
Pleasingly, retail leasing commitment has increased to above 92%, and office leasing continues
to advance, with further leasing beyond the currently committed 80% progressing well.
Scott Pritchard, Precinct’s CEO, said: “As previously stated, the last two months have been
critical in progressing the project, and it is unfortunate to have to confirm that we have observed
further slippage beyond what we observed earlier this year”.
“We will continue to work closely with all retailers and office occupiers at Commercial Bay to
manage risks and minimise any potential disruptions that the revised opening dates may cause.
Our key priority is ensuring that all retailers can plan their opening at Commercial Bay with
confidence, and that our office occupiers can effectively transition to their new premises”.
“While we are very disappointed that the opening of Commercial Bay has been further
delayed, we remain steadfastly focused on the successful delivery of the overall project to the
highest quality standards. We are committed to what we set out to deliver - creating a world-
class waterfront destination on par with other gateway cities”.
The revised opening date for the retail centre takes account of expert advice that the base
building works are unlikely to be complete before December 2019. In addition, Precinct has
decided to provide additional time for completion of retail fitout works after these base building
works have been completed. This decision has been made to ensure retailers have the best

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494
2267
possible opportunity to open successfully as well as ensuring that the quality of the finished
centre meets our aspirations. Consequently, the retail opening date will be in March 2020,
approximately three months after estimated completion of base build works.
The main contractor has brought a number of claims against Precinct under the construction
contract seeking extensions of time and/or additional cost and further claims are anticipated.
To date these claims have not resulted in material additional costs or extensions of time being
awarded and Precinct remains confident that the provisions of the construction contract
appropriately protect Precinct from losses due to contractor delay and/or breach of contractor
obligations. Liquidated damages are expected to largely mitigate the impact on Precinct from
losses of income and other prolongation costs over the delayed period, however liquidated
damages will cease to apply following completion of base build works.
Precinct notes that the programme review was completed by its project manager, RCP, and
has been completed independently of the main contractor. The review has been undertaken
to inform Precinct of the likely completion date for the project, making appropriate risk
allowances based on RCP’s observance of contractor delays to date. This review was
commissioned because the main contractor has not kept Precinct informed of their programme
for completion of the base build works reflecting the construction methodology being
employed.
Earnings guidance for the 2019 financial year remains unchanged at approximately 6.60 cents
per share (before performance fees). Precinct will provide a full, detailed update on the
Commercial Bay project in our full year results in August 2019.
-ends-

Precinct Properties New Zealand Limited Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Level 19, 157 Lambton Quay, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494
2267
For media enquiries, please contact:
Nicola McArthur
General Manager – Marketing and
Communications
Email: nicola.mcarthur@precinct.co.nz
For investor enquiries, please contact:
Scott Pritchard
Chief Executive Officer
Email: scott.pritchard@precinct.co.nz

George Crawford
Chief Operating Officer
Email: george.crawford@precinct.co.nz

Richard Hilder
Chief Financial Officer
Email: richard.hilder@precinct.co.nz

About Precinct (PCT)
Precinct is New Zealand’s only listed city centre specialist investing predominately in premium
and A-grade commercial office property. Listed on the NZX Main Board, PCT currently owns
Auckland’s PwC Tower, AMP Centre, ANZ Centre (50%), Zurich House, HSBC House, Mason
Bros. Building, 12 Madden Street, 10 Madden Street and Commercial Bay; and Wellington’s
AON Centre, Dimension Data House, No. 1 and No. 3 The Terrace, Pastoral House, Mayfair
House and Bowen Campus.