Augusta Capital Ltd has gone unconditional on its purchase for syndication of Mercury Energy Ltd’s new headquarters at 33 Broadway, Newmarket, where construction is just starting.
Mercury Energy will be the anchor tenant, consolidating its 4 Auckland offices in the one 5-green-star building and occupying over half the development at the roundabout across the road from the Newmarket Olympic pool. The company will be on a 12-year lease. Augusta managing director Mark Francis also confirmed Tegel Foods today as an office tenant.
Augusta subsidiary Augusta Funds Management Ltd will raise $83.5 million of equity through a unit trust to be established to acquire the property. Augusta Capital will underwrite $33.5 million and other parties the balance of the capital raising.
Mr Francis said a product disclosure statement was being prepared and the offer should be open for investment in mid-April. No money is being sought yet.
The building is under construction by Mansons Broadway Ltd with settlement (but not building completion) scheduled for 1 July. Mansons will provide a 10-year capex guarantee from completion.
When Augusta entered into the agreement in December to acquire the unfinished development, Augusta managing director Mark Francis said it was a new phase in syndicate investment strategy: “Augusta believes this transaction signals a key strategic step as it moves from not simply being a buyer of investment grade assets but into funding & development of investment grade assets.”
The total consideration is $143,111,878, with a fixed amount payable at settlement, further drawdowns made on a cost-to-complete basis as the development progresses, and retention amounts payable on achievement of certain development & leasing milestones.
Attribution: Company release.