Augusta Capital Ltd said today its subsidiary, Augusta Funds Management Ltd, would buy the 12-tenant Albany Lifestyle Centre from Argosy Property Ltd for $89 million and place it in a new investment fund.
August managing director Mark Francis said today settlement was scheduled for 27 March 2020.
The price represents an initial yield of 6.84%.
Argosy has the split-level bulky goods centre on its books at $87.5 million and a passing yield of 6.79%. The centre opened in 2009 and has a net lettable area of 25,029m².
Mr Francis said Augusta was still considering whether to establish a single- or multi-asset fund.
The centre, anchored by a Mitre 10 Mega store on a lease through to 2033, has a weighted average lease term of 7.65 years.
The other 9 retail tenants include Freedom Furniture, the Design Store & Danske Mobler), and there are 2 office tenants, E-Road & NZX.
Mr Francis said: “Augusta believes there remain strong fundamentals for properties based around bulk retail stores, with this property also underpinned by its location. There continues to be considerable growth & development around the Albany Town Centre, and an expanding catchment from housing developments will fuel demand for retailers at the centre.
“The property has easy access from the Northern Motorway and benefits from the surrounding retail in the area, with Westfield’s Albany Mall & the Albany Megacentre nearby. Retailing patterns will continue to evolve and are closely monitored by Augusta.
“If acquired by a single asset fund, the equity component of that fund is expected to be about $55 million, with the balance funded by a bank debt facility. Augusta will underwrite $20 million of that raising, with a third party underwriting the balance. Should a multi-asset fund be established, the $35 million third party underwriting commitment also applies to that fund. Establishment & underwriting fees at usual levels will be received by Augusta from the new fund established.”
Attribution: Augusta release.