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The valuations of the Northland Shopping Centre and the PricewaterhouseCoopers Centre in Christchurch have been slashed by their owner, Kiwi Income Property Trust, after the magnitude 6.3 earthquake in February.
The value of Northlands Shopping Centre has been reduced by $31.3 million, or 13.1 percent, to $207 million, while the value of the PricewaterhouseCoopers Centre in the central business district, has reduced by $20.8 million, or 39.4 percent, to $32 million.
The value of the shopping centre was cut even though 95 percent of retailers were open for business within two weeks and the centre is now experiencing higher patronage due to earthquake damage to competing retail centres.
"However, with medium to longer-term uncertainty around the city's recovery, future spending patterns and rental growth, the capitalisation rate has been softened by 100 basis points to 8.5 percent," the trust said.
The value of the PricewaterhouseCoopers Centre reflected access and services to the CBD, the programme and extent of remediation works, the status of current leases and future tenant demand.
"Access to the property has been restricted, due to its location within the central city cordon and, as a result, it has not been possible to complete a full structural assessment," the trust said.
The building represents only 1.6 percent of the overall portfolio value and is fully insured.
Kiwi Income Property Trust cut the value of its whole portfolio by 4 percent to $1.98 billion.
"The reduction in portfolio value over the past year is largely attributable to the impact of the February 2011 earthquake on our two Christchurch assets," Sean Wareing, chairman of the manager of the trust said.