Augusta Capital buys NZME House in Auckland
Listed property investor and fund manager Augusta Capital [NZX: AUG] has bought NZME House in Auckland for $115.8 million and plans to bundle the property into a syndication investment.
Augusta bought the building at Graham Street in the CBD from a subsidiary of property developer and rich listers Manson TCLM, with the deal to settle on August 15, it says.
The firm will pay for the building through a planned $70 million syndication on investor equity to be raised in units of $50,000 each, opening at the beginning of June. The balance will be funded by debt. The syndication is fully underwritten, with Augusta providing a $25 million backstop.
NZME House is tenanted by NZME/APN over three floors, Pernod Ricard and Meredith Connell on one floor each while one level is vacant. As a pre-condition to the settlement, Manson TCLM is looking to find a new tenant for the vacant floor on a nine-year lease, and is in talks with potential parties, Augusta says.
Augusta says the scale and quality of the building give it the momentum to continue successful syndication. It follows on from syndication of the Progressive Enterprises Distribution Centre in Christchurch, a Countdown supermarket in Hamilton and the redevelopment of Oji Fibre's Penrose premises and the Value Add Fund No 1, the company's first multi-asset unlisted property fund.
Augusta diversified into funds management to generate more income from its property investments, and last month said it reaped $2.7 million in fees from two recent syndicatoins.
Its shares last traded at $1.09 and have gained 9% this year.
Meanwhile, Oyster Group has launched the yet to be completed $93 million Cider Building in Ponsonby, Auckland for syndication.
A total of 50 interests of $1 million each are available to wholesale investors for the 13,200m² mixed-use retail and office development, anchored by a 20-year lease to General Distributors for a Countdown supermarket and a 12-year lease to Fairfax Media.
Developer Progressive Enterprises will pay the rent on any of the commercial or retail space not leased on settlement.
Oyster Group says the syndication will have a projected pre-tax return of 7.5% per annum and chief executive Mark Schiele says the multi-investor ownership structure will be the largest the company has created.
The Cider Building is part of a wider $200m project, which also includes the Vinegar Lane residential and commercial precinct. Cider and Vinegar are named as a nod to the site’s former use as the Dominion Yeast Vinegar (DYC) factory.