7 Waterloo Quay Update

11 October 2019

MARKET RELEASE
7 Waterloo Quay Update


Leasing Update

Argosy is pleased to announce the following leasing transactions for space at its 7 Waterloo
Quay building in Wellington;

Ground Floor and Level 1: New Zealand Post
New Zealand Post will remain on the Ground Floor, and relocate from the four tower floors it
presently occupies down to Level 1 toward the end of this year (4,430m2 leased to New
Zealand Post).

Levels 2 and 10: Department of Internal Affairs (DIA)
The DIA has entered into an initial 9-year lease for 4,130m2. Lease commencement date
1 February 2020.

Level 3, 4 and 5: Kāinga Ora (formerly Housing New Zealand)
Kāinga Ora has entered into an initial 9-year, 3 months lease for 7,000m2. Lease
commencement date 1 March 2020.

Following the three new/restructured leases, 7 Waterloo Quay is now 66% leased by gross rent.

Argosy is also at an advanced stage of negotiations with another Crown entity for an initial 9-
year, 3 months lease over ~3,660m2 on Levels 6, 7 and 8. The proposed lease commencement
date is 1 March 2020. If negotiations are successfully concluded the building will be 82% leased.

There is strong interest from corporate and Crown tenants for the remaining space on Levels 9,
11 and 12.

Argosy Chief Executive Officer Peter Mence said “We are very pleased to be able to announce
these transactions to the market. Our team has worked extremely hard to deliver real estate
solutions for the Crown. With a number of Crown entities already part of the wider Argosy
portfolio, it is very satisfying to be able to welcome additional Crown tenants. Our team are
focused on leasing the remaining space and we look forward to working closely with all our
new Crown partners.”

Insurance Claim Update
7 Waterloo Quay in Wellington sustained damage in the 7.5 magnitude Kaikoura earthquake
on 14 November 2016. Soon after the earthquake independent engineers confirmed that the
building remained structurally sound, but it suffered damage to fit out and services.
As with many significant insurance claims for earthquake damage, there will be debate with
insurers over the extent of damage, the scope of repair works, the repair methodology and the
extent of insurance cover. To support its claim, Argosy commissioned a comprehensive
damage survey of 7 Waterloo Quay, detailed damage assessment reports, corresponding
reinstatement scopes and a comprehensive reinstatement cost estimate. Argosy has submitted
these to insurers.
Argosy has submitted 11 interim claims in respect of material damage and business interruption
to 31 July 2019;
• Claims for material damage (reinstatement works and claims assessment costs) undertaken
have been submitted based on costs actually incurred. The total claimed from inception of the
claim to 31 July 2019 is $45.3 million. These costs relate primarily to urgent reinstatement works
required to make damaged levels of the building available for reoccupation (estimated at
$49.5 million) and were not able to be agreed with insurers in advance. Further claims will be
made in respect of reinstatement works as costs are incurred.
• Claims have been submitted to 31 July 2019 for business interruption costs (loss of rents,
additional costs and claims preparation) totalling $15.0 million. The main component of this is
loss of rents ($14.3 million) and no further claims in respect of loss of rents are expected.
• From inception of its claim to 31 March 2019 Argosy received progress payments from insurers
of $20.9 million (after a $4.9 million deductible) in relation to its interim claims. Of these, $10.8
million has been allocated to reinstatement of earthquake damage, $1.6 million to expense
recoveries and $8.5 million to loss of rents.
• In September, Argosy received a further payment from insurers of $2.5 million on an
unallocated basis.

– END –



Enquiries
Peter Mence
Chief Executive Officer
Argosy Property Limited
Telephone: 09 304 3411
Email: pmence@argosy.co.nz

Dave Fraser
Chief Financial Officer
Argosy Property Limited
Telephone: 09 304 3469
Email: dfraser@argosy.co.nz

Stephen Freundlich
Head of Investor Relations
Argosy Property Limited

Telephone: 09 304 3426
Email: sfreundlich@argosy.co.nz