Listed property investor NPT has sold its interest in the AA Centre in central Auckland to SkyCity Entertainment for $47 million.
"The sale of this property represents a first step on the path to repositioning NPT," chair Bruce Cotterill said.
NPT overhauled its board after shareholders voted to reject a proposal to hook up with larger property investor Kiwi Property Group in April.
They instead favoured a proposal by rival property company and cornerstone NPT investor Augusta Capital to block the deal and appoint three new directors to the board.
NPT's board has undertaken a thorough review of the FY18 business plan and Cotterill said directors would update shareholders on a proposed strategy in the coming weeks.
The sale proceeds "will be used to invest in the purchase of assets where we can see an opportunity to add value," he said.
The AA Centre is located on the corner of Albert and Victoria Streets and connects to SkyCity Auckland via a through-site link.
NPT's interest in the building includes 15 levels (12,000 square meters) of commercial office space, ground floor retail, the through-site link and 90 car park spaces.
The remainder of the interest in the building is owned by the New Zealand Automobile Association, SkyCity said.
SkyCity said the purchase price reflects about a 7 per cent yield on the income from the property and the "acquisition is expected to be marginally earnings accretive for SkyCity from FY19 and funded from existing bank facilities".
The casino operator said the deal is part of a plan to exert greater control over its Auckland footprint to create "opportunities for further hotels, apartments, food & beverage outlets, entertainment facilities and office spaces" to benefit more from increase foot traffic expected after the City Rail Link is finished.
Settlement will take place in July 2018.
Under the agreement, NPT is required to complete capital improvements to the building, which were commenced prior to the agreement being signed.
The estimated cost is $2 m.
After allowing for these capital improvements, this transaction will increase NPT shareholder equity by $2 million over the figures reported in the audited financial statements to March 31, said Cotterill.
According to NPT's annual report, the AA Centre has a market value of $40.85m.
NPT shares rose 2.6 per cent to 59 cents and have fallen 12 per cent over the past 12 months.
SkyCity gained 0.3 per cent to $3.75 and have fallen 16 per cent over the past year.