Archive | Syndication

Airways redevelopment syndicate closes oversubscribed

Augusta Funds Management Ltd closed its new single-asset fund – to acquire & redevelop the Airways Corp NZ Ltd premises in Christchurch – oversubscribed last Friday and will settle the purchase tomorrow.

The oversubscription means the funds manager’s parent company, NZX-listed Augusta Capital Ltd, won’t take up any units under its $15 million underwrite.

The syndicate is buying the property at 20-26 Sir William Pickering Drive for $20.5 million and will fund the development of a new building on the existing title, an air traffic control centre which will be leased to the state-owned Airways Corp for 25 years.

Earlier story:
21 February 2018: Augusta to open Airways building syndicate at weekend

Attribution: Company release.

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Oyster fund gets AA FundSource rating

NZX Ltd-owned research & rating agency FundSource Ltd has given Oyster Property Group Ltd’s Direct Property Fund an AA rating – the first for an unlisted direct property fund in New Zealand.

Mark Schiele.

Oyster chief executive Mark Schiele said yesterday: “This puts the Oyster Direct Property Fund in the top 5% of 64 funds currently rated by the research house. We view this as solid independent confirmation of the fund’s structure & performance. It should be very helpful for investors when assessing their investment options.”

Oyster launched the unlisted PIE-structured unit trust in 2016 to hold a diversified commercial property investment portfolio, giving investors an affordable way of investing in the commercial property market.

Mr Schiele said the fund had a value of about $40 million after doubling in size in the last 18 months.

“The fund provides investors with diversified exposure to about $500 million in quality commercial property throughout New Zealand, monthly cash distributions or the ability to reinvest, and the potential for capital growth.”

The minimum investment into the fund is $10,000. Since it was launched, it’s paid investors a distribution equivalent to 7c/unit/year. The initial unit price was $1.00 and at 31 January it was $1.037.

Links:
Oyster Group
FundSource report

Attribution: Company release.

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Augusta to open Airways building syndicate at weekend

Augusta Capital Ltd has registered a product disclosure statement for its $22.75 million investment offer in a new single-asset fund to acquire & redevelop the Airways Corp Ltd premises in Christchurch.

Augusta expects the offer to open on Saturday and close on Friday 23 March. Settlement is expected to occur on Thursday 29 March.

Augusta will underwrite $15 million of the $22.75 million of equity, and a third party will underwrite the balance.

The building will house part of Airways’ new air traffic management platform. Airways is committing to a 25-year lease term on the new building & 2 of the existing buildings (effective from practical completion, which is expected to occur in mid-2019), and a 9-year lease term on the remaining building (starting at a date elected by Airways between 12 & 18 months after practical completion).

Augusta’s guarantee of the development agreement obligations will be released once the required equity & debt for the new fund are raised.

Attribution: Company release.

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Pacific Property Fund buys Tauriko warehouse

Property Managers Group’s diversified fund, Pacific Property Fund Ltd (Pacific Property), has acquired a large industrial warehouse in Tauriko, Tauranga, for $9.25 million, taking the number of properties the company owns to 10 and total assets to $123.2 million.

The property at 8 Paerangi Place is a newly built 5085m² space leased to NZ Specialty Kiwifruit Products Ltd, which develops kiwifruit products for export to Asia. That lease term is 15 years and takes the Pacific Property portfolio’s weighted average lease term to 8.0 years.

Property Managers Group chief executive Scott McKenzie said that, with 9 other properties in the portfolio, including the Kelston Mall in West Auckland bought in December, Pacific Property was able to leverage its scale to acquire the Tauriko warehouse without the need to raise additional capital.

Attribution: Company release.

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Augusta gets one tick for new fund, one more to go

Augusta Capital Ltd has satisfied one condition for the inclusion of a Henderson property in a new industrial property fund, but still requires the existing tenant to waive its first right of refusal.

The building at 12 Brick St, Henderson, is owned by a syndicate which Augusta manages, and the investors agreed last week to sell it to the new fund.

The other 2 properties in the new fund’s initial portfolio are 862 Great South Rd, Penrose, and The Hub, Wellington. Price tag on all 3 buildings is $86.31 million. Between them they have 14 tenants and a weighted average lease term of 7.2 years.

Augusta managing director Mark Francis expects the initial equity to be raised by the new fund will be between $58-60 million. Augusta will underwrite $33-35 million.

Mr Francis said work continued to finalise the product disclosure statement for the offer ahead of registration in mid-February.

Earlier stories:
24 January 2018: Augusta wants syndicate approval to add third property to new industrial fund
29 December 2017: Augusta gets some remodelling for second industrial fund property
13 December 2017: Augusta buys Wellington property as seed for new industrial fund

Attribution: Company release.

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Augusta wants syndicate approval to add third property to new industrial fund

Augusta Capital Ltd said on Monday it had made a conditional offer to the investors in one of its syndicated properties for its new industrial fund to acquire that property. The offer is subject to an investor vote. If successful, this would be the third & final property in the initial portfolio for the launch of the new fund.

Augusta manages the syndicated property at 12 Brick St, Henderson, and portfolio & syndication management subsidiary Augusta Funds Management Ltd has sent a notice of meeting to the investors in that property requesting approval for a sale to the new fund.

Augusta managing director Mark Francis said: “It is a relatively new industrial property constructed in 2009, with a long-term lease of at least 10 years remaining to D&H Steel Construction Ltd – and potentially a further 5 years if the tenant does not exercise the break right it has at 10 years.”

Augusta has scheduled the investor vote for Friday next week, 2 February. The sale would be conditional on sufficient capital being raised under the public offering for the new fund and the existing tenant waiving its right of first refusal.

Mr Francis said if the sale is approved, the new fund will be launched with 3 properties in its initial portfolio – 862 Great South Rd, Penrose; The Hub, Wellington; & 12 Brick St.

That portfolio has a current valuation of $87.85 million, 14 tenants and a weighted average lease term of 7.2 years. Mr Francis expected occupancy to be 99% on settlement.

He expects the initial equity to be raised by the new fund to be between $58-60 million. As previously announced, Augusta will underwrite between $33-35 million of that equity raising and intends to subscribe for at least a 10% stake in the new fund and maintain that holding long-term.

Augusta is preparing a product disclosure statement for the fund, which it expects to be registered in mid-February. Settlement of the acquisition of the initial portfolio is intended to occur on 29 March.

Attribution: Company release.

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One condition left on Central Park sale, and Air NZ extends at Fanshawe St

Goodman Property Trust manager Goodman (NZ) Ltd said yesterday its sale of Central Park at Greenlane had all but gone unconditional, with only Overseas Investment Office approval still required.

The trust has also secured a new long-term lease commitment from Air NZ on its Fanshawe St headquarters.

Goodman (NZ) chief executive John Dakin said yesterday the $209 million Central Park sale to a joint venture led by New Zealand property fund manager Oyster Property Group Ltd represented a significant milestone in the repositioning of the Goodman trust, marking the last of its major identified asset sales.

“Following settlement of the property, the trust’s portfolio will be almost 90% invested in its preferred Auckland industrial sector and will have a value of $2.4 billion.

“With over $850 million of asset sales since 2012, we have positively rebalanced the trust’s portfolio, improving the quality & growth profile of the assets. It’s a disciplined strategy that is focused on the delivery of the industrial development pipeline and building a portfolio of unrivalled quality.”

Air NZ’s headquarters at 185 Fanshawe St.

The VXV precinct

The Goodman trust’s office investment is now focused in the VXV precinct of the Auckland waterfront Wynyard Quarter. The trust jointly owns the portfolio of 7 buildings with GIC Pte Ltd, the sovereign wealth fund of Singapore. The portfolio has a value of $488.4 million and Goodman’s proportionate share is $249.1 million.

Air NZ’s head office at 185 Fanshawe St is in that precinct. Trans Tasman Properties Ltd began development of the 6-level building in 2005, putting a $60 million value on it, but sold the development part-built to what was then the Macquarie Goodman Property Trust, with Air NZ as the incoming tenant.

Air NZ has renewed its lease for 10 years. Mr Dakin said that, and the Central Park sale, would increase Goodman’s portfolio occupancy to 98% extend the office portfolio’s weighted average lease term to 10.6 years and the overall lease term to 6.2 years.

Earlier story:
10 November 2017: Big property sale follows first-half profit setback for Goodman

Attribution: Company release.

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3 sales, a syndication & a lease

Colliers agents have completed 2 sales & a lease in West Auckland, another at Rosedale, and have completed the syndication of 4 distribution centres through Silverfin Capital Ltd.

Syndication sale

Features: 4 Provida Foods Ltd national distribution centres
Outcome: sold to investors in 233 parcels in a Silverfin Capital Ltd proportionate ownership scheme for a total $11.65 million
Agents: Charlie Oscroft & Kris Ongley

North-east

Rosedale

35 William Pickering Drive, unit 4:
Features: 946m², retail showroom/warehouse
Rent: $170,000/year net + gst from tenancy running until 1 March 2018       
Outcome: sold for $2.765 million at a 6.14% yield
Agents: Jimmy O’Brien (Colliers) & Marty van Barneveld (NAI Harcourts)

North-west

Hobsonville

Hobsonville Workspace, 102 Hobsonville Rd, lots 3 & 4:
Features: 600m² off-the-plan office site developed by The Neil Group Ltd; building to be developed by Kea Properties Ltd, it will include a childcare, retail, cafes & office, completion expected end of 2018
Outcome: sold to Kea for $2.848 million + gst
Agents: Sean Finnegan & Craig Smith

Westgate

101-103 Fred Taylor Drive:
Features: 3.55ha vacant industrial development site     
Outcome: sold for $10.5 million + gst
Agents: Sean Finnegan (Craig Smith (Colliers) & David Mayhew (JLL)

Lease

North-west

Westgate

9 Northside Drive, lot 3:
Features: 720m² childcare centre leased to Eduplay Childcare Ltd
Rent: $390,000/year net + gst + opex
Outcome:
Agents: Sean Finnegan & Craig Smith

Attribution: Agency release.

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Pacific Property launches syndication of Kelston mall

Pacific Property Fund Ltd, managed by Property Managers Group, opened its syndication of the $40 million Kelston Shopping Centre yesterday, after committing to the purchase from the Oyster Property Group in June.

Pacific Property is offering 24 million shares at $1.02/share, with a minimum investment of 20,000 shares & parcels of 10,000 shares thereafter. The offer closes on 22 November.

The target cash distribution return is 7.2c/share for the full year to 31 March 2019.

The Kelston purchase will increase Pacific Property’s funds under management from $74.3 million to $114.6 million, in 9 properties.

Property Managers Group chief executive Scott McKenzie said: “Having multiple tenants & multiple properties in an investment portfolio means total income is less likely to be as affected by the loss of a single tenant or an unforeseen event. This results in more reliable & sustainable returns, attracting more investors to invest, which then results in providing greater liquidity for the underlying shares.

“We also maintain a conservative level of bank gearing compared to other peers in the market. This ensures the portfolio is well positioned to weather any economic clouds that may roll across the horizon and better look after our investors’ interests.”

The centre sits on 2.1568ha at the corner of Great North & West Coast Rds. It was built in 1977, expanded in 1997 and its entrance was upgraded in 2007.

It’s anchored by 3 major tenants – Countdown, Mobil & McDonald’s – and supported by 32 speciality, medical, food, beverage & convenience stores. Property Managers Group plans to offer more health & community services-related tenants, starting with a medical centre, which will take up a lease in November.

Attribution: Company release.

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Maat settles Takapuna syndication

Maat Property Group Ltd has completed its 12th syndication with the $60.85 million purchase of 2-4 Fred Thomas Drive, Takapuna through an equity investment offer to the public.

The property has a net lettable area of 12,200m² in 3 standalone buildings on 2 titles, occupied by a mix of medical & office tenants.

Maat director Neil Tuffin said yesterday the syndicator raised $30.55 million from investors and used bank funding for the balance. He expected the capital investment to increase to $33.65 million soon.

The projected return to investors is 8.1%/year before tax, payable monthly.

The Fred Thomas Property Investment Ltd syndication takes Maat’s portfolio to $260 million.

Maat now manages $260m of properties on behalf of investors.

Attribution: Company release.

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