Precinct Properties New Zealand has decided to internalise its management, ending its deal with AMP Capital for a one-off payment of NZ$215 million ($197 million).
AMP Capital, via its 50 per cent stake in the management company AMP Haumi Management, has managed Precinct since its listing in 1997 and through its corporatisation in 2010.
Abu Dhabi Investment Authority is the other owner of AHML.
Under AMP, Precinct delivered more than NZ$1.5 billion in developments.
But AMP Capital has now concluded the internalisation of the management rights that offered the strongest value to both Precinct and AHML, as well as representing a natural evolution for the management arrangements for Precinct, which has become an increasingly stand-alone business.
Precinct has signalled it will internalise and simplify its management arrangements to deliver the next stage of its growth strategy.
The management rights of Precinct had been excluded from the proposed transaction between AMP and Ares Management Corporation for AMP Capital’s private markets business.
The transaction is estimated to deliver around $80 million profit subject to foreign currency and other adjustments for AMP Capital’s 50 per cent share of the payment, which will be recognised in the AMP first half of the 2021 financial year financial results.
The amount will also be recorded as a one-off gain outside of AMP Capital’s operating results.
But AMP Capital has said while it will cease to receive Precinct’s management fees, the impact will be immaterial to its ongoing earnings.
