Argosy takes $26m hit on NZ Post HQ

Damage from Kaikoura’s earthquake last November has forced listed property company Argosy to make a $26.6 million writedown on NZ Post’s headquarters in Wellington.

Argosy said it was structurally sound, but indications were that it would cost about $50m to repair building services and fitout on the first four levels and level seven of the Waterloo Quay building.

The ground floor and four other levels had been re-occupied by NZ Post.

Argosy chairman Mike Smith said they were working closely with their insurers and their tenant.

‘‘We have notified our insurers that there will be a claim for the reinstatement cost and associated loss of rents under our material damage and business interruption insurance policy,’’ he said.

Argosy owns several other buildings around Wellington, including a beloved heritage building on Stewart Dawson’s corner.

In December jeweller firm Stewart Dawson’s moved to another location four stores down, vacating the spot that bore its name for more than a century.

Argosy plans to strengthen the building but has re-tenanted the ground floor in the meantime to a souvenir store.

Several other tenants above are on short-term leases while the company finalises its plans.

‘‘It’s a fantastically located

"It's a fantastically located building so we're looking at what we can do there." Argosy chief financial officer Dave Fraser

building so we’re looking at what we can do there,’’ chief financial officer Dave Fraser said.

Argosy announced an annual net profit on Thursday of $104.4m for the year to March 31, which compared with $78.9m in 2016.

But its preferred measure was its net distributable income of $54.3m, which was up from $51.2m last year.

Net property income rose 1.2 per cent to $99.5m.and the annual dividend rose 1.2 per cent to 6.1 cents per share, with a forecast of 6.2cps next year.

During the year, the company’s portfolio of industrial, office and retail buildings rose 3 per cent in value to $1.44 billion including the NZ Post writedown.

The value of its Wellington properties fell 6 per cent to $355.3m.

In Wellington it continued to add value to several properties including Stewart Dawsons Corner (currently valued at $15.3m) and the building next door at 8-14 Willis St.

Argosy said it was also improving land at 56 Jamaica Drive.