Archive | Syndication

Oyster goes unconditional on Central Park purchase

The Goodman Property Trust’s $209 million sale of the Central Park Corporate Centre to a joint venture led by property fund manager Oyster Property Group Ltd has gone unconditional.

The trust’s manager, Goodman (NZ) Ltd, announced the sale last November, when one condition remained – Overseas Investment Office approval. Oyster is 50% owned by the ASX-listed Cromwell Property Group.

Settlement is scheduled for 29 June.

Goodman (NZ) chief executive John Dakin said in November the sale represented a significant milestone in the repositioning of the Goodman trust, marking the last of its major identified asset sales.

The property fronts Great South Rd beside the Southern Motorway at the Ellerslie-Panmure roundabout in Auckland.

Earlier stories:
17 November 2017: One condition left on Central Park sale, and Air NZ extends at Fanshawe St
10 November 2017: Big property sale follows first-half profit setback for Goodman

Attribution: Company release.

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Augusta single-asset fund to buy new Mansons Parnell building

An Augusta single-asset fund will syndicate ownership of a new office building which Mansons TCLM Ltd is 2 months from completing at 96 St Georges Bay Rd, at the foot of Parnell.

Augusta Capital Ltd said on Friday its subsidiary, Augusta Funds Management Ltd, had entered into an unconditional agreement to acquire the 5-level A grade office building. Under the agreement, an Augusta fund will ultimately acquire the 11,083m² property for $116 million, which represents a 6.47% initial yield based on a 10.89-year weighted average lease expiry.

Mansons expects to reach practical completion in July and has signed up Xero Ltd for 2 floors, and Independent Liquor (NZ) Ltd & Harrison Grierson Group Ltd for one floor each. A small amount of level 1 & the ground-floor retail, which have no tenant signed, will be leased by Mansons for a 9-year term.

Augusta Funds Management intends to raise the required $68.5 million of investor equity in $50,000 units through the new fund before the forecast 30 August settlement date, subject to practical completion having occurred. Augusta Capital will underwrite $24.5 million of the equity-raising and will also receive offeror fees. The balance has been underwritten by third parties.

Augusta expects to open the offer at the end of June.

Attribution: Company release.

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Maat settles Tauranga purchase after successful syndication

Maat Property Group Ltd settled the $41.4 million purchase of a new Tauranga office building on 27 April following its successful syndication.

The 5-storey 7800m² building plus basement at 306 Cameron Rd, in the Tauranga cbd, was completed in late 2016 by Manor Group Investments Ltd in a joint venture with Watts Group Investments Ltd. Maat launched its syndication in March, offering 457 share parcels of $50,000 for a total equity ratio of 55%. It’s projected a pretax cash return of 7.8%/year, paid monthly.

Bayleys Tauranga was involved in leasing 94% of the building and handled its sale.

Attribution: Agency release, Maat & Manor.

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Augusta industrial fund set to open next week

Augusta Capital Ltd subsidiary Augusta Industrial Fund Ltd has registered the product disclosure statement for its $75 million equity-raising to acquire its first 4 industrial properties.

The initial portfolio is valued at $118 million, putting the debt ratio at 36.4%. Augusta Capital, the NZX-listed promoter, intends to take at least a 10% stake.

Augusta has assumed a 6.5% gross return (before depreciation & tax) will be paid. That’s supported by the forecast operating earnings and represents a payout ratio of 95-100%.

Managing director Mark Francis said today the offer was expected to open next Tuesday, 8 May, once the Financial Markets Authority’s waiting period has expired, and close on Monday 11 June. Settlement is scheduled for Friday 15 June. Oversubscriptions won’t be accepted.

Augusta Capital has underwritten $35 million of the $75 million to be raised and third parties have underwritten the balance.

The initial portfolio consists of 12 Brick St, Henderson; 862 Great South Rd, Penrose; 20 Paisley Place, Mt Wellington; and The Hub, Seaview, Wellington.

The product disclosure statement says Augusta Industrial intends to grow the asset base to about $250 million over the next 2-3 years and maintain a gearing target of 35-40%. Once that asset level has been reached, Augusta intends to apply to list the fund on the NZX main board.

A second equity raise of $90 million has been assumed on 1 April 2019, along with $52.425 million of debt drawn to facilitate the purchase of $135 million of additional property & associated costs.

Initial portfolio features:

  • A weighted average lease expiry of 8.7 years
  • 100% occupancy
  • A diversified mix of 15 tenants, and
  • A 60% weighting to the Auckland industrial market.

Mr Francis said Augusta would receive establishment & underwriting fees, and ongoing management fees consistent with its new NPT Ltd management agreement.

Link: The product disclosure statement can be opened on the Disclose register at https://disclose-register.companiesoffice.govt.nz/ by searching “Augusta Industrial Fund” under “search offers”.

Earlier stories:
12 March 2018: Augusta gets agreement to add 4th building to industrial fund
2 March 2018: Augusta delays industrial fund launch to get fourth property in
9 February 2018: Augusta gets one tick for new fund, one more to go
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, product disclosure statement.

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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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