Published 10 May 2007
Kermadec Property Fund Ltd went unconditional yesterday on a 16-storey City Rd office building for a purchase price of $20.5 million. To partially fund the acquisition, Kermadec also completed an institutional placement raising $9.8 million.
The acquisition will increase Kermadec’s portfolio value to $125.7 million. The fund listed in November with a $61.25 million public offering and a portfolio of 7 properties – 5 in Auckland, one each in Hamilton & Palmerston North.
The new property, just off Symonds St, Karangahape Rd & the top of Queen St on the Auckland cbd fringe, has a total net lettable area of 6606m², 12 office levels & 4 parking levels. It’s 90.5% occupied with a 2-year rental underwrite from the vendor on the vacant space. The property has a weighted average lease term of 5.5 years. The purchase price represents a net rental yield of 8.5%/year.
Forsyth Barr completed the placement yesterday at a fixed placement price of $1.07/share, which it said was well supported by institutional & habitual investors. Shares issued under the placement will rank equally in all respects with existing shares but will not carry any right to Kermadec’s dividend distribution of 2.61c/share for the 4 months to 31 March.
Managing director Mark Francis said that in addition to the institutional placement, Kermadec intended to implement a share purchase plan, for parcels up to $5000/shareholder, at a price no more than the price paid under the placement.
AFM Holdings Ltd & Property Manager Holdings Ltd, as manager of Kermadec through the joint-venture company Augusta Funds Management Ltd, subscribed for 1,588,686 shares under the placement at the same fixed placement price of $1.07. This will result in AFM Holdings & Property Manager Holdings retaining their aggregate 10.1% interest in Kermadec after completion of the share purchase plan.
Kermadec reported an NTA (excluding deferred tax on revaluation gains) of $1.16/share last week, in its financial results for the 4-month period to 31 March. It expects to maintain its gross dividend of 8.65c/share for 2008.
The share purchase plan documents will be sent to shareholders on Tuesday 15 May. It will open on Thursday 17 May, close on Monday 11 June and allotments will be made on Friday 15 June.
9 November 2006: Augusta launches $61 million Kermadec fund
13 October 2006: Peters & Francis brothers to launch Kermadec property fund
Attribution: Company release, story written by Bob Dey for this website.